For Diehl Aerosystems, Airbus’s production ramp-up is both opportunity and massive challenge. The company’s powerful position as an interiors supplier to Toulouse – and the A350 in particular – has helped turn what was a niche business in the Diehl group six years ago into its biggest division. However, meeting the delivery schedules and quality standards Airbus demands is a constant concern for divisional president Rainer von Borstel. “Every day we experience the hot breath of the customer,” he says.
Airbus has been candid about the task facing its supply chain as it rapidly increases production of its narrowbodies and the A350. As a first-tier manufacturer, von Borstel says it is vital Diehl constantly monitors the performance of its suppliers. “We have done all the preparations in advance and we think we are well prepared,” he says. “But it really is a daily fight. When you have such a high output, the whole supply chain needs to work, from customer management to delivery of parts. If one part of the chain doesn’t work, you have problems with the whole supply chain.”
Diehl Aerosystems is a relatively young business in the venerable, family-owned group, which traces its origins to 1902 and traditionally made its money from defence and industrial metal products. Although it dabbled in aviation, the big push into interiors came around the end of the decade when it bought two plants in southern Germany from Airbus (at the time as a joint venture with Thales), and later acquired Hamburg-based galley supplier Mühlenberg. The moves took commercial aviation from around a tenth of overall Diehl turnover in the 2000s to just under a third in 2015.
“The centre of gravity has changed,” says von Borstel. “Around 15 years ago we decided to expand in aviation. We used to be primarily a defence company, but that is around 15% now. Our strategy people saw [the military spending decline] coming. Now, while not ruling out further acquisitions, von Borstel says the focus is on consolidation – “We need to digest what we swallowed”. Diehl, he says, is “entering a new phase that is all about efficiency. We need to become excellent in every step: engineering, customer service, supply chain management and manufacturing.”
Diehl Aerosystems’ portfolio covers much of the cabin, including air systems, monuments, overhead bins and panels, galleys, water systems and lavatories. Its flagship products include the first class washrooms, with shower, on Emirates’ A380s. Meanwhile its decade-old, majority-owned joint venture with Thales, Diehl Aerospace, is responsible for cockpit systems and cabin lighting, supplying a range of products to the A380, for instance. Almost the only major interiors area Diehl is not involved in is seating.
Diehl makes a range of equipment for European military aircraft such as the Eurofighter Typhoon, Airbus A400M and Airbus Helicopters Tiger helicopter. It also numbers Boeing, Bombardier and Embraer among its airliner-manufacturing customers. However, partly thanks to the legacy of Airbus’s previously vertically-integrated interiors facilities, the airframer’s commercial division represents at least two thirds of Diehl Aerosystems’ original equipment business, with the A350 the biggest single programme. It is something von Borstel is keen to rebalance.
“Our strategic target is to become more independent from Airbus,” says von Borstel. “But we want to do both things – become more independent but keep Airbus as a happy customer.” He notes the company recently secured contracts from Bombardier for the Global 7000 and 8000 ultra-long-range business jets, and Boeing on the 787-10, “but to be frank, when you compare these with the value of a single shipset for the A350, it will take a long time before we can start talking about a more balanced orderbook”.
Another way Diehl is looking to diversify from its reliance on Airbus is by pushing more into the potentially lucrative airliner retrofit market, an area that represents a lot less than 10% of its turnover. “This was a secondary priority for us but it is now higher in terms of management strategy,” says von Borstel. The company last year signed two memoranda of understanding with aftermarket specialists Regent, in the USA, and Austria’s Ames. While California-headquartered Regent is a traditional maintenance, repair and overhaul outfit, specialising in interiors, Peggau-based Ames focuses more on cabin architecture.
“We are in the middle and they both complement our skills,” says von Borstel, who adds the partnership has “identified pilot projects” and will begin seriously looking for new business. “We have everything on hand to offer cabin upgrades,” he says. “We won’t do the physical modification of the aircraft, but from architecture, support, design and production of parts, we can cover any change in the cabin. The magic word is one-stop-shop. Airlines and lessors want to deal with just one supplier.”
This new-found direct contact with the end user is driving a culture change at Diehl, admits von Borstel. “As part of our culture we are used to reacting to the needs of Airbus and Boeing. But we are changing our philosophy,” he says. “We are more in touch with the end user and that means that occasionally we can make counter proposals to Airbus and Boeing. We want to get away from that classical stamp of supplier furnished equipment, simply responding to Airbus or Boeing. We have a long way to go, but maybe we are halfway down that road.”
One growing area of the interiors space Diehl will definitely not be expanding into is seating. The recent Aircraft Interiors Expo in Hamburg saw a flurry of activity in the segment with new entrants securing major deals, and much innovation from existing players as airlines look to increase the productivity of the economy cabin in particular. “We will not get into making and designing seats,” insists von Borstel. “While on the one hand there is not enough supply, we have enough of our own homework to do without entering such a complex and crowded market.”
Source: Flight International
