Passenger traffic in the travel sector is growing at 7 percent a year — outpacing the United States’ near-2 percent GDP growth — and Boeing is at the center of the trend, Dennis Muilenburg, its chairman, president and CEO told CNBC on Thursday.
“The nature of the business has changed. Global traffic has become very networked, very connected,” Muilenburg told “Mad Money” host Jim Cramer in an exclusive interview. “We’ve got millions of new people traveling every year. And so our business has turned from being a cyclical, commercial business to a long-term sustained growth business.”
As a company that focuses on long-term prospects (and one of the few public companies with a 20-year plan), Boeing is ramping up production to meet the pace of growth, the CEO said.
Not too long ago, Boeing was producing up to 20 airplanes a month at its Renton, Washington factory. Now, the facility churns out 47 aircraft a month, with production expected to grow to 57 planes a month by 2019, Muilenburg told Cramer.
“I think we’re a big growth engine for the economy, and it’s really, again, driven by what we’re seeing [in] commercial traffic growth around the world,” the CEO said. “Less than 20 percent of the world’s population has ever taken a single flight, believe it or not. This year alone, 100 million people in Asia will fly for the first time.”
Traffic growth of this magnitude not only translates into growth for Boeing, but for the entire economy, Muilenburg said.
But for Boeing in particular, growth brings innovation, supported by the company’s $6 billion budget for research and development.
One of the company’s recent bets on innovation came in the form of its
“There’s a tremendous wave of energy going into autonomous systems. Now, we’ve developed autonomous airplanes and vehicles for our defense customers for some time, all the way from space, like the X-37, to drones that operate for the military to underwater unmanned submarines,” Muilenburg said. “The energy that’s going into autonomous vehicles is very significant, and we expect to continue to invest there. Aurora is an example of our next-step investment.”
Boeing’s much-anticipated 787 Dreamliner aircraft also represents innovation in the way of passenger comfort on commercial flights, the CEO said.
“On a long, global flight, people get off that airplane feeling better because of the environment in that airplane,” Muilenburg told Cramer. “But we’re also investing in next-generation, high-speed airplanes. Someday, we’ll be able to go anywhere in the world in two hours.”