Rockwell Collins’s planned “transformational” acquisition of aircraft cabin equipment manufacturer B/E Aerospace is an indication that size matters when competing for supplier contracts in an increasingly cut-throat market.
On a basic level, the deal adds depth to Collins’s product range in the form of cabin interior products. But more interestingly, it also opens opportunities to combine its own in-flight connectivity with B/E’s galleys and seats to create smart solutions to underpin the connected aircraft of the future.
Whether it be seatback in-flight entertainment systems or galley inserts that send real-time repair data to maintenance teams on the ground, the possibilities for innovation are endless as airlines latch on to the potential to derive operational benefits from connectivity.
The decision to purchase B/E for $6.4 billion in cash and the assumption of $1.9 billion in net debt – vastly overshadowing its $1.4 billion acquisition of Arinc in 2013 – underlines the confidence Collins has in the interiors market and its potential to develop alongside technological advances on the connectivity side.
Chief executive Kelly Ortberg says the combined portfolio “uniquely positions” it to harness its full range of capabilities to drive operational and financial benefits for airlines. It is a big gamble – an $8 billion one – but it could pay significant dividends.
Source: FlightGlobal.com
