Boeing CEO Calhoun bullish on industry demand for airplanes

By David Shepardson

ARLINGTON, Virginia (Reuters) -Industrywide demand for airplanes is strong and will continue to improve as airlines work to replace aging fleets, buy more efficient models and continue to see passenger growth, Boeing Co Chief Executive Dave Calhoun said on Monday.

“Demand for airplanes is as robust as I’ve ever seen it. I think it will get more robust,” Calhoun told Reuters and another news outlet on the sidelines of an event at Boeing’s new headquarters in Arlington, Virginia. The demand for airplanes “is more than a bubble,” he added.

Calhoun described the decision to move the headquarters to Arlington from Chicago, announced last month, as “not a momentary thing. It wasn’t an auction.”

Calhoun, speaking to reporters after an event Monday to herald the HQ announcement, said Boeing did not consider relocating its headquarters back to Seattle, where it had been based until its move to Chicago in 2001. “It was a simple consolidation of footprints,” he said.

Boeing, a major U.S. defense contractor, also plans to develop a research and technology hub in the Arlington area, home to the Pentagon and across the Potomac River from the U.S. capital.

“Our biggest customer in the world is right across the way — the Pentagon is the biggest in the world,” Calhoun said. “This is just a smart spot.”

Boeing’s new headquarters is in an Arlington office it has had since 2014 where it has significant unused space, and which sits just blocks from Amazon.com’s second headquarters, known as HQ2, which is under construction.

“This innovation campus really got jelled when Amazon came here,” Calhoun said.

The Chicago headquarters – a 36-floor, $200 million riverfront skyscraper – has been at the crossroads of a cost-cutting campaign for Boeing, which has shed real estate, including its commercial airplane headquarters in Seattle.

With the move to Arlington, some key executives, including Calhoun and the chief financial officer, will be based there, but not a lot more.

Asked how many jobs would move to Virginia from Chicago Calhoun said: “Almost none — like none.”

“Seventy percent of my day no matter where I am is virtual anyway because I run a large distributed company,” Calhoun said.

Boeing’s headquarters move to Chicago in 2001 came after 85 years in Seattle, following its 1997 merger with St. Louis-based rival McDonnell Douglas.

Raytheon announced last week that it also will move its headquarters to suburban Washington, joining the other largest defense contractors in the area.

“This industry is fighting every other industry to get STEM talent — that fight’s forever,” Calhoun said. “Raytheon, Northrop (Grumman), Boeing, Airbus — we’re all hunting for it.”

Asked if there was any movement on efforts to resume more airplane deliveries in China, Calhoun told Reuters he remains “constructive, and I believe someday good things will happen, but I can’t tell you the day.”

(Reporting by David Shepardson; Editing by Leslie Adler)