Rockwell Collins expects sales to fall $300 million next financial year to $2.5 billion, but believes its increased diversification will help offset the drop in its air transport business. The US avionics supplier announced revenues for the year ended 30 September of $2.82 billion, up $310 million from fiscal year 2000.

Chief executive Clay Jones says the majority of the sales fall next year will be in the company's in-flight entertainment (IFE) product line, where revenues are expected to decline 40% from $400 million this year. This confirms Boeing's announcement that demand for its Connexion in-flight broadband service had tumbled, as airlines attempt to cut non-essential costs.

Rockwell Collins is basing projections for FY2002 on the assumption that Airbus and Boeing will build 650 aircraft between them, with avionics sales falling as a consequence, and that air transport aftermarket revenues will fall by around 25% as airlines cut flights. The company expects revenues in its business and regional sector to remain flat, despite forecasting that manufacturers will produce 10% fewer aircraft in FY2002.

Rockwell Collins expects that the fall in civilian sales will be offset by "mid single-digit" growth in military sales. In addition to modest growth in satellite navigation and datalink communications, the company expects "significant growth" in its cockpit displays business after buying display specialist Kaiser Electronics.

Military business is forecast to account for 45% of Rockwell Collins' revenues next year, up from just under 40% in the year just ended. Commercial business will be made up of 30% air transport and IFE and 25% business and regional. "Our diversification is a strength of the company," says Jones. "It will offset some of the decline in air transport."

Spun off as an independently traded company, Rockwell Collins posted an income of $263 million for the year just ended, slightly up on the year before. After asset impairment and restructuring charges of $183 million, net income dropped to $133 million.

Source: Flight International