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Honeywell evaluating revenue potential from Boeing's next aircraft launch: CFO

By Ankit Ajmera
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A logo of Honeywell is pictured on their booth during EBACE in Geneva

A logo of Honeywell is pictured on their booth during the European Business Aviation Convention & Exhibition (EBACE) in Geneva, Switzerland, May 22, 2017. REUTERS/Denis Balibouse

By Ankit Ajmera

(Reuters) - Honeywell International Inc is evaluating the revenue potential from supplying parts to Boeing's next major aircraft program, which is likely to be finalized by late 2019 or early next year, Chief Financial Officer Greg Lewis told Reuters.

Boeing has signaled that the proposed new mid-sized jetliner, known as NMA, will accelerate its drive to diversify beyond airframes and into services such as repairs and maintenance, where parts suppliers make much of their revenue.

The trend by Boeing and other planemakers to encroach on the business models of their suppliers has already fueled an industry power battle that analysts say could reach a critical point during supplier negotiations for the NMA.

"If Boeing decides to move forward on the NMA ... we feel like we have got some very competitive offerings that we could provide on a platform," Lewis said.

"But it would have to be done in a way where it's a good project for Honeywell and we are able to protect our intellectual property, and still be able to have a good economic revenue and income stream come from that."

Boeing's proposed jet will serve a niche market falling between narrow- and wide-body aircraft and is expected to reshape competition with arch-rival Airbus SE, which dominates the top end of the medium-haul sector.

Honeywell supplies parts such as auxiliary power units, cockpit avionics and flight management systems as well as aircraft wheels and brakes for a range of aircraft.

Lewis also said Honeywell remained interested in China's C919 passenger jet program, manufactured by Commercial Aircraft Corp of China Ltd (COMAC), as the company was already supplying parts to the upcoming narrowbody jet.

The C919, which will compete directly with Boeing's 737 and Airbus' A320 aircraft, was reportedly having problems with its flight deck design, raising concerns that the new jet would miss its target of entry into service by 2021.

"We are bullish on how that's (the C919 program) going. Our equipment has performed well. As far as we can tell, they are on track for that 2021-22 type of entry into service date," Lewis said.


(Reporting by Ankit Ajmera in Bengaluru; Editing by Bernard Orr and Anil D'Silva)