Walking the shop floor of its still paint-fresh factory and design centre at Bournemouth airport, AIM Altitude’s commercial director Richard Bower is in no doubt about the UK-based company’s best-known product. “It’s the horseshoe bar everyone remembers,” he says as he stops by an early production version of the latest version of the monument that forms the centrepiece of Emirates’ Airbus A380 onboard lounge.
AIM Altitude engineered and manufactured the first A380 horseshoe-shaped hospitality area for the Dubai carrier in 2008 and the new version – now in production – will start appearing in its growing fleet of 93 superjumbos from July. The refreshed premium zone was unveiled at the ITP travel show in Berlin in March and will be one of the main talking points of AIM Altitude’s presence at AIX this week.
But while Emirates is its flagship customer – airline chief Sir Tim Clark was even persuaded to open the new factory in December – AIM Altitude has produced distinctive cabin features for blue-chip airlines including Qatar Airways, Virgin Atlantic and Aeromexico. And, as well as the monuments business – which makes up 60% of its £120 million ($150 million) turnover – AIM Altitude also manufactures galleys at two smaller UK facilities.
The company is part of a burgeoning interiors business within Chinese aerospace group AVIC, which completed the purchase from AIM Altitude’s investment house owners in early 2016. Late last year, AVIC also bought Northern Ireland seating manufacturer Thompson Aero. In addition, it owns Hubei Ali-Jiatai, a Chinese economy-class seat manufacturer, and has a large stake in Austria’s FACC, whose portfolio includes cabin components.
AVIC’s swoop came two years after the then-AIM Aviation had made its own acquisition – Altitude Aerospace Interiors was the semi-independent interiors design arm of Air New Zealand. Although the merger in 2014 added only around $19 million of revenues, the combination of the two businesses gave the renamed AIM Aviation a stronger foothold in the Boeing market, as Altitude’s former parent ANZ was a big customer of Seattle.
“We were strongly Airbus and didn’t have much Boeing exposure,” says Bower. “But our product lines were complementary and we could add factory capability to what was a design house.” With teams in Bournemouth and Byfleet in the UK, as well as New Zealand, the merger also gave AIM Altitude a round-the-clock engineering resource, with projects allocated to wherever there is capacity, or passed between hemispheres at the end of the day.
Unlike galleys – a commodity offering where it competes with volume players – premium monuments is a niche where specialists can establish a reputation for creativity with a small number of airlines. Often AIM Altitude works with third-party consultants. “One of our skills is taking a designer’s ambition and making it certifiable,” says Bower. The biggest challenge, he says, is “refilling our orderbook from established customers”.
The Emirates deal typifies this. While AIM Altitude has supplied much of the onboard lounge since 2008, the cabin refit across the fleet will provide work for several years, and should include new aircraft too, with Emirates due to add more than 40 more A380s. The deal puts the company among a select band of A380 suppliers relatively unthreatened by the quadjet’s sluggish sales elsewhere in the market.
Since designing the original bar, AIM Altitude has worked closely with Emirates to make “subtle enhancements”, but the latest refresh is “on a larger scale”, increasing seating space and giving it an “airier and lighter feel”. The new design, says the company, creates “more social seating arrangements” and includes customised laminates such as the UAE’s national Ghaf tree in decorative gold foil.
The area includes “high-end leathers” with “elegant gold perforated detailing” to “create a feeling of sumptuous sophistication”. Lamps add to the atmosphere, says lead engineer Steve Reade, while birchwood grain gives a “more contemporary finish”. He adds: “The seats and sofas in the lounge are highly sculpted, reminiscent of private yacht cabins or sleek automotive seating.”
The galleys business – based out of factories in Byfleet, near London, and in South Wales – is very different to its core activity. “It’s much more price-sensitive, whereas premium monuments is highly customised,” says Bower. Originally skewed to the A320 buyer-furnished equipment market where he says the company had a 40% share, the focus shifted to the A330 after Airbus went single-source in 2011.
With the Boeing 787 and Airbus A350 both also single-source on galleys, the push is on two types where BFE deals are up for grabs. “On the A330neo we have some RFPs [request for proposal] out there,” says Bower. “With the 777X, that’s a couple of years further down the line, but we are engaging with customers already.” Legacy 777 programmes are dominated by Zodiac and Jamco, he adds, “but the 777X is the key to breaking into the Boeing market”.
In such a price-driven segment, streamlining supply chains and optimising production systems is crucial. Despite being a relatively small player in galleys, Bower says AIM Altitude’s A330 operation “is as lean as anyone’s”, with a lead time just 30% of what it was three years ago. “We run our supply chain really well and have put a lot of effort into driving down costs,” he says. “That’s why we’ve got 40% of the market.”
Next strategic steps for AIM Altitude include a possible move into lavatories. “We are seeing increasing integration between lavs and galleys, so we’re thinking about it as a way of leveraging our galley experience,” says Bower. “But we would have to find a way of offering something innovative in the market. Alternatively, it could be an acquisition opportunity for AVIC.”
Seven years after a management buyout, AVIC’s acquisition has put AIM Altitude on a stable footing, maintains Bower. “It’s positive for the business. AVIC has a long-term perspective and aviation is a long-term business,” he says. “AVIC is already a strong partner with Airbus and Boeing on aerostructures, and, although there is no definite plan yet for an AVIC interiors group, AVIC’s ambition is to build a major presence in the market.”