Boeing to form joint venture with Adient to develop airplane seats

  • Boeing is the world's largest aerospace company.
  • Deal would bring more seat-design in-house.
  • Boeing just reported record aircraft deliveries.

Boeing and Adient have agreed to form a joint venture to develop and manufacture airplane seats, the companies said Tuesday, a deal that could give the aerospace giant a greater footprint in outfitting record numbers of airplanes its selling.

Boeing, the largest aerospace company in the world, is teaming up with Adient, which is better known for manufacturing automotive seats. Boeing will have a minority stake of 49.99 percent in the venture, it said.

Record aircraft sales have made seat-making an attractive business and Boeing wants those planes to be outfitted and delivered as soon as possible to antsy airlines grappling with record demand.

The announcement also comes amid consolidation among suppliers of airplane components and furnishings, such as seats, in recent months. For example, United Technologies, in September announced it was buying Rockwell Collins, which makes airplane seats. Rockwell announced its deal to buy airplane seats-maker B/E Aerospace a year earlier.

Airlines are racing to outfit their planes with luxurious cabins for first- and business-class customers. But delays in seat deliveries from suppliers have been a headache for airlines looking to entice more high-paying passengers — a key source of revenue — to fly in spacious pods and suites.

"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," said Kevin Schemm, chief financial officer for Boeing Commercial Airplanes.

Boeing is better known for building airplanes than furnishing their interiors, but this could generate the Chicago-based company more recurring revenue, while Adient will have an aviation powerhouse with a worldwide showroom to sell its products.

"An airline might be buying an airplane every 20 years," said Henry Harteveldt, a travel industry consultant and founder of the Atmosphere Research Group. Airlines refurbish their cabins generally within a decade, he added.

The venture will be called Adient Aerospace and its first plant will be located in Kaiserslautern, near Frankfurt, Germany.

Airlines that are buying an aircraft from Boeing, Airbus or other suppliers choose which supplier they would like to outfit their planes, including suppliers for features such as seating and Wi-Fi. It's similar to how Apple produces an iPhone but consumers then need to pick a service provider.

The companies cited industry estimates of the airplane seating market of $4.5 billion.

Correction: Rockwell Collins makes airplane seats.