Exclusive: New Boeing 737 economy seat supplier books initial sales

Tue Oct 18, 2016 1:36am EDT
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By Alwyn Scott

NEW YORK (Reuters) - A new supplier of economy-class seats for Boeing Co's (BA.N: Quote) top-selling 737 jetliners has signed its first two airline customers, allowing it to begin production, a person familiar with the matter said on Monday.

The agreements with Huntington Beach, California-based LIFT by EnCore, which are due to be announced as early as this week, are the first in which Boeing buys the seats from the supplier, known as "seller-furnished equipment," essentially guaranteeing they will arrive on time.

With other seat makers, which include B/E Aerospace BEAV.O and Zodiac Aerospace (ZODC.PA: Quote), airlines are required to buy the seats and have them delivered to aircraft factories, a process that has led to problems for the plane makers when seat deliveries are late.

European plane maker Airbus (AIR.PA: Quote) made a similar move in 2015 when it chose German seat maker Recaro to supply seats for the A320 family. Recaro and LIFT are privately held.

LIFT's initial orders will equip at least 50 of Boeing's 737 MAX aircraft with seats designed for the Boeing 737 Sky Interior, with deliveries beginning in 2017, said the source, who could not be named because the negotiations are private. The airline customer names could not be learned.

The deals for seats on Boeing's top-selling 737 show initial market acceptance and would allow LIFT to begin certification and production, the source said.

Boeing's choice of LIFT as its sole seller-furnished seat supplier prompted drops in B/E Aerospace and Zodiac shares when the deal became public in April.

Boeing currently has orders for 4,350 of its 737 jetliners.   Continued...

The Boeing logo is seen at their headquarters in Chicago, in this April 24, 2013 file photo. REUTERS/Jim Young/File Photo