Diehl Aviation chief executive Rainer von Borstel is very aware that recent consolidation among the big players in the interiors market – with Safran swallowing Zodiac and Rockwell Collins absorbing B/E Aerospace before itself being taken over by United Technologies – has left the German business "a big player but small among the really big ones".
While its 5,400 employees and turnover of around €1.5 billion ($1.69 billion) make Diehl Aviation – which represents just under half of the Diehl Group – a powerful tier-one supplier, von Borstel says "internal discussions" are taking place to "find the right answer to these moves", and that "various options are being considered".
However, the former Airbus executive says one route that the fourth-generation family-run board is ruling out is an exit from the aerospace industry. The segment accounted for 10% of Diehl’s revenues when von Borstel joined a decade ago, and since then, acquisition and organic growth have driven a flourishing of the business. "They [the Diehl family] believed in aviation then, and they have been proved right," he says.
Diehl Aviation – which has a portfolio that includes overhead bins, cabin lighting, galleys and lavatories – arrives at AIX 2019 with a slew of new products on display, including a touch-free "hygienic lavatory", and has two concepts in the finals of the Crystal Cabin Awards, being held on the evening of 2 April.
About three-quarters of its business comes from Airbus and Airbus operators – one of Diehl's breaks in aviation came in 2008, when, in a venture with Thales, it took over the airframer's cabins factory in Laupheim, now Diehl Aviation headquarters. Four years on, Diehl bought out its former partner. Further acquisitions – including a Hamburg galley supplier – further grew aerospace revenues.
Von Borstel has tried to rebalance the business with more Boeing work. However, despite successes such as the contract to supply the 787's emergency cabin light system, he says that Seattle's move towards vertical integration, bringing more of its supply chain in-house, means "we will keep trying, but any big bang will not now happen".
Major drivers for Diehl are – like many cabin product suppliers – bringing down the weight of its products and offering "connected cabin solutions". The fact that a third of Diehl Aviation's revenues come from lighting and other systems means it can take a more integrated approach, says von Borstel. Diehl is already the contractor for the Embraer E2's cabin management system.
A more aggressive push into the aftermarket is another priority. Line-fit provides three-quarters of Diehl's revenues, but von Borstel "would like to take more from the retrofit market". Last year, Diehl established a partnership with fellow German company Lufthansa Technik to provide MRO cabin equipment and modifications. "No SFE [supplier furnished equipment] supplier can survive without retrofit business," says von Borstel.
The cabin interiors sector may be changing, but Diehl – which was founded over 100 years ago and, until relatively recently, was predominantly a defence company with interests in smart meters and automotive metals – "wants to remain heavily engaged in aviation", says von Borstel. "We are looking to find our right position in the market, but the family has given us the green light to grow. We will be investing more in aviation."
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Source: Flight Daily News