Seeking Innovations to deliver comfort in airlines creating opportunities for aircraft seat material market players

Due to stiff competition in the aviation sector, there is a substantial decrement in the tariff that has led towards an unprecedented influx of air travelers globally. With the majority of the flyers affording the economy segment, several airlines are inclined towards providing comfortable experience to carve a niche for themselves in the aviation sector.As a consequence,R&D by seat manufacturers is predominant in the aircraft seat material market. Apart from passengers comfort, another vital aspects impacting theR&D of materials is the imperative necessity of lightweight intended for fuel efficiency of the aircraft, high durability and economic cost price of the material. The latest innovation in aircraft seating material is the non-petroleum based open cell silicone foam, referred to as“MFX”, it has a potential life span of three times in comparison to customary polymeric foam. Similarly, increasing usage of hybrid composite materials for aircraft seats is projected to assist manufacturers by cutting outlays,as it eradicates intricacies of attaining raw fabrics as well as expensive technical textiles. Apart from R&D, increasing number of aircrafts globally due to rampant expansion of commercial airlines operations is positively influencing aircraft seat material market demand.“An expanding economy, employment gains and surging household net worth are also contributing to the growth in demand for air travel” – Airlines for America Vice President John Heimlich.  The global aircraft seat material market size was evaluated to be $115m as of 2018 and is progressing with a global CAGR of 3.9% during the forecast period 2018-2023.

Ease of communication and traveling is the most vital element of globalization. Considering the modes of traveling air-travel is the safest, and with inexpensive fares, air transportation market is blooming. As per the statistics released by The International Air Transport Association (IATA), number of air passengers in 2017, reached an unprecedented mark of 4.1 billion supported by improvements in global economic landscape.  Similarly, as indicated by the Airlines for America, the industry trade organization for leading U.S airlines, between March 1 and April 30 in 2018, the number of air passengers witnessed an all-time high of 150.7 million that equals to 2.47 million per day. As a consequence, to leverage the bourgeoning traffic, that was about 94,000 additional passengers daily, airlines in the United States added 114,000 seats per day across their networks.  With the number of flyers displaying no indications to decline in the near future, and airlines increasing their fleet of seats to rightly capitalize the developments, global aircraft seat material market demand is poised for exponential growth.

IATA (International Air Transport Association) in 2017 estimated APAC to be carrying the largest number of passengers with 36.3% global share (1.5 billion passenger, + 10% from 2016). With India and China growing exponentially in the global aviation sector, APAC dominates the global aircraft seat material market demand. Further analysis states, APAC to be having a substantial share of $34.8m in global revenue of aircraft seat material market as of 2018. And, demand in this region is growing at a CAGR of 4.1% going through to 2023, which is estimated to be the highest, compared to Americas and Europe growing at 3.4% and 3.2% respectively. According to IATA, APAC aviation market will serve an additional 2.35 billion passengers by 2037. As China is forecast to conquer the apex spot displacing U.S in terms of air traffic by 2020, India is gearing up with increasing aviation fleet to secure 3rd place, outstanding the UK around 2024. Owing to rampantly progressing tourism sector, Indonesia and Thailand is observing an unprecedented influx of tourist, hence they will be securing the 4th and 10th spot respectively by 2020. With such developments, the aviation fleet is APAC countries is bourgeoning, as a consequence, demand in aircraft seat material market is ascending. As of July 2018, Indian Market had nearly 620 aircraft activated by scheduled airline operators, and the convoy of airplanes is estimated to grow to 1,100 by 2027. 

As the global aviation sector is penetrating both the developed and developing economies, substantial returns in the form of tax is encouraging the governments to ease the flow of investments. IATA estimates that in 2019, $136 billion in tax revenues will be generated by airlines and its passengers. Similar lucrative opportunities resides for debt providers and equity investors in the airlines industry. For instance, in 2017, equity investors generated ROIC (return on invested capital) of noteworthy 9.2%, and in 2019, the business is estimated to cultivate $5billion of value for investors. Hence, with the trend progression in ROIC, the industry is confident to invest and therefore in 2018commercial airlines got delivered with over 1,780 new aircraft. By the end of 2019, commercial airline sector is forecast to expand by 1000 units, quantifying the total fleet to 31,000 globally. As a consequence, by the end of 2019, there will be nearly 4.8 million seats available in the global aviation sector.  This is a major factor positively influencing the influx of demand in the global aircraft seat material market.

Civil aviation is the dominating element in the Indian aviation sector, as it sustained the tag of the fastest developing domestic aviation market globally, in 2017.  As the Indian government has 100% FDI under automatic route in scheduled air transport service, domestic scheduled passenger airline and regional air transport service, FDI influxesin India’s air transport sector was evaluated to be $1.8 billion from 2000 to 2018. Analyzing the future contracts, by 2022, India’s aviation industry is anticipated to be witness $4.99 billion investment and Indian government itself is planning to invest $1.83 billion by 2026. 

Airlines in the United States are profoundly investing into enhancing their products portfolio such as including new aircrafts and in-flight equipment pertaining to customer experience.In between 2010 and 2017, U.S. airlines had invested 75% of operating cash flow that is evaluated to be $102.4 billion. Gradually refining revenue has enabled airlines in the United States to reinvest and capitalize on increasing traffic, and hence nine largest passenger carriers directly invested $20 billion in 2017 on various fronts including the delivery of more than 450 new aircraft.  At the same time, Federal Aviation Administration has stated that the amount of seats per aircraft is increasing, particularly in the United States regional jet market. Therefore, 50 seat regional jets are anticipated to be substantially replaced by 70-90 seat aircraft. The organization has listed ‘increasing number of seats per aircraft’ as a vital factor for shaping commercial air carrier industry. Increasing number of seats will enable higher revenues for airline along with optimal utilization of fleet, which is imperative to counter bourgeoning expenses such as increasing wages in the U.S aviation sector.

Some of the key players operating in the global aircraft seat material market are ZIM FLUGSITZ GMBH, Thompson Aero Seating Ltd., TSI Aviation Seats, HAECO Americas, B/E Aerospace, ZODIAC AEROSPACE SA, Thales Group, EXPLISEAT SAS, and Ki Holdings Co., Ltd.

Innovation is paramount to survive in this marketplace. Consequently, companies are investing on R&D activities to carve a niche for themselves. For instance, EXPLISEAT SAS has been directing majority of in R&D investment and marketing towards ‘lightweight’, as fuel efficiency, an imperative aspect in totally dependent on aircrafts load.

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