Burned by Koito? Don’t expect a payday, say sources

If you’re an airline hoping to receive compensation from embattled seat manufacturer Koito Industries, don’t hold your breath, say multiple sources.

Kotio falsified test data, including crucial flammability data, on some 150,000 seats in the world fleet.

Several airlines, including All Nippon Airways and Thai Airways International, have Thumbnail image for Thai 1.JPGfiled lawsuits against Koito seeking damages for the Japanese manufacturer’s failure to deliver seats in the wake of the scandal.

Koito customers are also now expected to adhere to costly airworthiness directives.

But in April, Koito announced an all-too-convenient plan to isolate its seat unit, while moving its other various businesses – which produce everything from toilet seat covers to traffic lights – into a separate company.

A source with knowledge of the situation tells RWG: “There is no money there. Koito Industries is a huge company and they have convinced the Japanese government to separate the two, so there is nothing there.”

Another source says: “In truth, Koito will go bankrupt before they pay anybody.”

Meanwhile, a number of industry stakeholders – including regulators – have managed to keep the Koito story from becoming a true public relations nightmare. How? By not discussing it in detail. (The industry is employing a similar strategy with respect to the ‘Wi-Fi interference with Honeywell avionics’ story, ahem).

But seriously, if I had a dime for every time I’ve received a “no comment” or “I’m not the right person to speak to about that” in response to my questions about Koito, I’d own a big bag of dimes, more money perhaps than what is sitting in Koito’s coffers (that part is speculation, dabnamit).

And so, I am forced to return to industry sources for a sense of where things stand. So, where do things stand?

I’m told that a number of airlines with Koito seats on partial fleets are dragging their feet, a move, it could be argued, being made somewhat easier by the FAA and EASA, which granted some leeway in their ADs (EASA issued an SIB last month to provide further assistance).

“Some of these Koito seats will get old enough to where it makes economical sense to change them anyway. This is the strategy because otherwise the expenditure is enormous and everyone knows that Koito is not going to be able to meet the obligations. I can’t see any airworthiness agency taking on liabilities,” says a source.

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