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ANALYSIS: Airframers seek more secure seat supply

When Boeing revealed in January its intention to start manufacturing seats as part of a new joint venture with automotive seating specialist Adient, it was a wake-up call for incumbent suppliers to deal with capacity bottlenecks that had previously hampered airframers' production ramp-up plans.

Adient Aerospace would, said Boeing, address "the aviation industry's needs for more capacity in the seating category, superior quality, and reliable on-time performance". The airframer's senior vice-president of supply chain management, finance and business operations, Kevin Schemm, stated: "Seats have been a persistent challenge for our customers, the industry and Boeing – and we are taking action to help address constraints in the market."

Airbus's A350 production line has been held up by interior equipment supply problems at Zodiac Aerospace. The issues spanned a range of cabin elements, including seats. Problems at Zodiac have also affected assembly lines at Boeing and Bombardier in the past.

In late 2017, Zodiac chief executive Yann Delabriere acknowledged that previous management had "somewhat underinvested in the modernisation of the company", and that "some of our issues were related to insufficient capacity in the ramp-up of our programmes". He said an "industrial recovery and transformation" programme was under way and that investments were being made to "modernise the manufacturing base of the company".

French aerospace group Safran in February disclosed that it had built a Zodiac holding of some 88% – this has since grown beyond 97% – and said it had implemented an integration team "tasked notably with deploying Safran processes and methodologies" at the company.

NEW ARRIVAL

Previously the automotive seating division of engineering group Johnson Controls, Adient was spun off as a standalone entity under new branding in late 2016. Not long thereafter, in March 2017, Boeing disclosed that it had formed a partnership with Adient as the automotive supplier worked to gain insight into airworthiness regulations for aircraft seats.

In the new aircraft seating venture, Adient holds 50.01% of shares and Boeing the remainder. Adient Aerospace will design and manufacture seats for line- and retrofit to Boeing and other manufacturers' commercial aircraft. Its headquarters, technology centre and "initial" production facility will be in Kaiserslautern, Germany.

The German city is already home to another Adient subsidiary – Recaro Automotive Seating. In 2011, Stuttgart-based seating specialist Recaro sold its automotive division to Johnson Controls, together with a licensing agreement permitting continued use of the Recaro brand for car seats. Meanwhile, Recaro concentrated its business on aircraft and child seats via two separate divisions. Recaro Aircraft Seating is based in Schwabisch Hall, approximately 2h by car from Kaiserslautern.

Recaro chief executive Mark Hiller is sanguine about Boeing's new joint venture. "Over the past years, numerous new companies have been established in the aircraft seating segment," Hiller tells FlightGlobal: "In this market of constantly changing competitors, we have successfully continued our growth plan on the basis of our strong market position, and even expanded it."

He acknowledges that shortages in the seating segment have led to hold-ups at the airframers' assembly lines. But he asserts that Recaro has "benefited from that situation" as the company is "famous" for on-time delivery and quality. "We continue to build on our strengths and invest a double-digit percentage of our revenue in research and development. We deliver more than 100,000 seats a year. More than a third of the delivered products are new developments and therefore younger than three years," he says.

SHORTER LEAD TIMES

In 2015, Airbus recruited Recaro to provide seats as supplier-furnished equipment (SFE) for A320-family jets. The option of selecting a standard seat within pre-defined and pre-certificated cabin configurations in Airbus's catalogue substantially reduces time required for the equipment's certification, says Hiller.

Christian Kley, Airbus's head of purchasing for seats, says the co-operation with Recaro was established specifically to shorten lead times for seats in an effort to address "shortcomings that we did experience in the single-aisle market". He describes the partnership as “very successful” and says it represents a “solution which we intend to build on”.

Airbus's head of cabin Geoff Pinner says the airframer is open to additional collaborations with suppliers, including joint ventures. "If we have a product and supplier that would benefit from a joint venture, we would certainly look at it." He says partnerships are relevant particularly for the development of interior equipment. Noting that "we have some new innovations and concepts coming", Pinner says partnerships are "certainly an avenue that… is on the table when we co-develop products".

The SFE collaboration with Recaro is part of a "two-pronged" strategy by the European airframer to manage the risk of potential supply-chain bottlenecks. Pinner says Airbus recently broadened its range of approved seat providers – the airframer describes this as its "enriched catalogue" – to include "many traditional seat suppliers and new entrants".

The move was, at least partly, a result of supply problems at Zodiac. Pinner says Airbus is working "very closely" with Zodiac to "come back to a balanced approach", and that a "real difference" has been made to improve equipment deliveries over the past year. However, he notes: "Of course, the fallout from that type of problem in the supply chain [is that] others become the winners from the loser."

Pinner acknowledges that other interior equipment manufacturers had issues too, as they stepped in to take over previous Zodiac supplies. But he says these were "short-term problematics… nothing of the scale that would change our business model".

He notes "some sensitivities" still exist in Airbus's cabin supply chain, and suggests this is nothing unusual, as ramping up new aircraft programmes is a "very sensitive activity". In order to reduce the risk of supply-chain shortages, the number of suppliers should be increased and competition encouraged, he suggests. "We do have choices… This is the important question," he says.

As such, Adient will provide "fresh" competition, says Pinner. "Adient is a newcomer and we would welcome a newcomer… into the [seat] sector for sure."

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