Here’s an interesting supplier-buyer problem to think about. First, acknowledge that airline travel in the sense of schlepping a person from Point A to Point B is pretty much a commodity. Airlines could settle for offering a commodity or they could try to find a way to differentiate their offerings — or at least their offerings for those who are really willing to spend travel. That logic, reports Businessweek, has led to an arms race in offering ever spiffier business class seating (The Unbearable Heaviness of Business Class, Dec 15). See the graphic to the right.
That’s what gets us to supplier-buyer problem. Airframe manufacturers don’t necessarily care about upscale seats. Indeed, for them, those seats are a pain in the butt.
International airlines are locked in a technology-led competition to provide the best business class seats and win the largest share of big-spending corporate travelers. But those same gizmo-packed chaises are proving a headache for Airbus and Boeing (BA). The aircraft manufacturers are more concerned with shedding excess weight and simplifying production than pampering fliers. And they say the trend toward ever-more-lavish pleasure domes is both threatening their production schedules and stealing from hard-won gains in fuel efficiency.
“Seatmakers and airlines have gone overboard with bells and whistles,” says John Leahy, Airbus’s chief operating officer. “It costs a small fortune to take 100 kilos out of an airplane [design], and then they throw it all back on with gizmos and little motors and things.”
A single business class berth crammed full of entertainment systems and the electronics needed to morph into a bed can weigh 300 pounds, three times its coach class counterpart, and typically costs $80,000 to $100,000. Yet airlines aren’t about to switch gears after years of placing the once-lowly seat at the center of their premium class strategies, says Peter Cooke, design manager at British Airways, whose current business seat is 25¼ inches wide, 5¼ inches wider than its first flat bed.
A complication here is that airplane seats have typically been sourced separately from the jets themselves. Boeing and Airbus thus have had little control over what their customers do. They have responded to the increasing size and complexity of seats by clamping down on what customers can do.
Planemakers also are trying to rein in buyers who go overboard on seat accoutrements. Unlike, say, cockpits or landing gear, seats traditionally were not included as part of a plane’s purchase price. Instead, airlines contracted with independent manufacturers to produce them. That meant the difficulty of building or time spent installing customized seats often wasn’t fully considered. On its new 787 Dreamliner, Boeing largely scrapped that process. Instead, it chose seat manufacturers and seat models on its own to assemble a catalog, offering airlines six choices for economy and three for business seats, with limited flexibility on such things as colors, fabrics, and features.
Airbus, too, sought to limit choice on its A350, but with more latitude. “We basically have a contract in place with suppliers that specifies the interface these guys need to comply with—the target weight, performance, reliability, manufacturing capability, engineering, all the requirements we want them to meet. And then commercially, we have a catalog price,” explains François Caudron, vice-president of A350 customer and business development. Demanding customers can still negotiate directly with Airbus’s suppliers for seats with greater sophistication—at extra cost.
This is an interesting problem. Airplanes are such complicated pieces of machinery and the emphasis on fuel efficiency and therefore weight means that everything interacts. At some level, limiting seat choice benefits airlines since it simplifies negotiations and guarantees a particular level of performance. That is, limited seating configurations mean that Boeing should be able to guarantee a weight and fuel-efficiency when an order is placed.
However, the airlines want a unique business class experience AND Boeing and Airbus fight over any sizable order. Consequently, the airframe makers have to blink at some point. While the manufacturers might value the simplicity of fewer options, they are likely to concede to their customers’ demands eventually.