Stelia Aerospace is well-known for its aerostructure activities, in particular its manufacture of Airbus nose cones. But the Toulouse-based company, which is a subsidiary of the Airbus group, is also a recognised specialist in Business and First Class seats, products which include high added value: a Business Class seat may be worth between 20 000 and 100 000 dollars, and a First Class seat 10 times more. Stelia Aerospace is in third place in the world for this specific segment, with around 200 million euros in turnover. This is the reason for its attendance at the Aircraft Interiors fair, which was held in Hamburg from 4th to 6th April.
How are things for your specific Business and First Class seat market?
Pretty good! Its a dynamic market, with average progress of 6 to 7% per year. Our market is driven both by the growth in the worldwide fleet, through planes such as the A350, the 787 or the 777 and by retrofit activities. Many airlines are upgrading their Business and First Classes and I would even say that retrofit activities are progressing more quickly than installation on new planes. This activity counts for just under 10% of our total sales and it's our ambition to increase turnover by at least 50% over the next three to four years.
What's the competitive landscape like?
In this sector, there are barriers to entry related to the complexity in certifying new products and manufacturing them on time. You also need to understand what airlines need. So, there are not many new companies and we can almost say that the global offer is under-capacity in relation to airlines' needs, which is a pretty good thing for our activity. We are 3rd in the world behind the two leaders Zodiac Aerospace and B/E Aerospace.
Is there still pressure on delivery times, as there is with Economy seats?
Yes, we have the same constraints: any delay is extremely costly for manufacturers and airlines; so there is considerable pressure. Punctuality is one of our strong points, with an On-time delivery (OTD) ratio of nearly 100%. This is also the case for quality. Our customers don't just think in terms of the seat price, but more and more in terms of total ownership cost, including maintenance and support in particular. Let's not forget that are products cost the same as a large German saloon car, for a Business Class seat, and ten times more for a First Class seat.
On that point, what innovations did you present at the Aircraft Interiors fair?
First of all, most of our products meet the three F: "full flat", "full access" and "full privacy". For example, the last First which we presented at Hamburg, or the Opal concept for Business, which meets the three F but which enables a 10% increase in density. Airlines want to offer more comfort, but also to densify their Business Class to increase revenue. With this in mind, we also presented Equinox 3D, two Business seats which when in "flat" position are placed on top of each other at foot level in order to use the third dimension and so save a little space. A patent has also been registered for this innovation.
How is the First Class seat segment developing?
This market is pretty flat, unlike the Business Class seat market. But we are interested in it as it's where we'll be testing solutions before installing them in Business later on. We have between 20 and 30% of worldwide market share, given that on average a high capacity aircraft has eight First Class seats. In this sector, the seat itself is a small part of the whole. There's a whole environment around the seat, which is why the prices are very high.
How is your activity divided between Airbus and Boeing, and with other aircraft manufacturers?
Overall, we are 50-50 between the two manufacturers, on aircraft such as the A330 et A350, the A380 and the Boeing 787, 777 and 747 range. But these are not our end customers. Regional aeroplane manufacturers, such as Embraer or Bombardier, are not our target as their interior volumes are too small to load Business seats like ours.
How are you organised on an industrial level?
We have our main factory at Rochefort, which is home to our design office and where we carry out full final assembly for passenger and pilot seats. We produce sub-assemblies in our factory in Morocco and composite parts at Stelia Composites near Bordeaux. But nearly 80% of production is sub-contracted.
Are you planning to set up in a low cost zone like Mexico to enable you to deliver to Boeing better?
Honestly, there's no economic benefit for us in doing this as we are a luxury activity, where price is not the most important element. We deliver perfectly to Boeing's factories in Seattle or North Carolina, such as we deliver the A330's interior development chain to Tianjin without any problems.
You also manufacture seats for pilots; how is this activity doing?
This business is very different from Business seats, even if a cockpit seat is very technical. First of all, the customer is the aircraft manufacturer. Next, the developments and innovations are related to the release of new planes. This means that this activity requires a lot of development time with the aircraft manufacturer at the beginning, but then we have series production time, unlike with Business seats. And the retrofit market is very limited. We deliver around 2500 cockpit seats per year as we equip every Airbus. In fact, we have a duopoly with Ipeco, which equips every Boeing. And over the last ten years, we have not delivered a single pilot seat late! That's our trademark.
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