For more than 80 years, Rockwell Collins — a global leader in aviation and high-integrity solutions — has been keeping people safe, connected and informed.

From supplying the communications systems used in the Apollo moon landing and creating all the lenses for NASA’s Mars rovers to developing the first touchscreen flight displays for commercial aircraft and designing the helmet mounted display system for the F-35 military aircraft, Rockwell Collins’ innovative solutions are used across land, sea, air and space.

Untitled design (1)

With the successful acquisition of B/E Aerospace — a leading manufacturer of aircraft cabin interior products — Rockwell Collins begins an exciting new chapter in its history. As the largest acquisition in Rockwell Collins’ history, this move strengthens its position as a leading supplier of cockpit and cabin interior solutions and diversifies its product offerings for the aerospace and defense industry.

“The acquisition of B/E Aerospace is a major step for us in achieving our overall vision of being the most trusted source of aviation and high-integrity solutions in the world,” said Kelly Ortberg, chairman, president and CEO of Rockwell Collins.  

Bigger, stronger, better

For Rockwell Collins, expanding beyond its core avionics and communications capabilities has been a primary part of the company’s long-term strategy. Through prior acquisitions, Rockwell Collins brought new services and solutions to its customers such as pilot controls, actuation systems and information management. By integrating B/E Aerospace as a fourth business unit called Interior Systems, Rockwell Collins brings customers an even broader suite of products and capabilities.

Airplane graphic cropped for Horizons article

“Together, we can develop and deliver significant long-term benefits that neither company could realize on its own,” said Werner Lieberherr, executive vice president and chief operating officer of Interior Systems for Rockwell Collins and former chief executive officer of B/E Aerospace.

As B/E Aerospace, the company had been looking at strategies to address some of the changing market dynamics affecting its business. In 2014, it restructured its company — spinning off its aerospace fasteners and consumables business in order to optimize the market positions and structures of each business.

032017_RockwellCollins_110_Hi-Res

Rockwell Collins and B/E Aerospace had both been helping customers win in the competitive environment of the aerospace and defense industry for decades. They each delivered innovative and reliable aircraft solutions that increased fuel efficiency, reduced weight and lowered power consumption — from Rockwell Collins’ advanced avionics and head-up guidance systems to B/E Aerospace’s LED lighting systems and passenger seating and interior products.

Together as one company, Rockwell Collins’ expanded portfolio enhances its ability to integrate the cabin products, smart network technologies and user connectivity solutions in demand today. This combined complementary approach can significantly enhance aircraft uptime and airline profitability while improving the experience of passengers and airline personnel.  

Growing opportunities

Rockwell Collins sees the cabin as integral to the next stage of airline innovation for passengers and as one of the primary ways that airlines will differentiate themselves in the competitive air travel environment. Connectivity, efficiency and comfort are themes that will continue to expand alongside airlines’ continual pursuit of fitting more passengers onto an aircraft while driving down costs. Cabin interiors are at the core of all of these transformations.

The shorter life cycle of cabin interior products creates a significant opportunity for residual sales growth for Rockwell Collins. Aircraft interiors are refreshed and retrofitted multiple times during the life of an aircraft either due to wear and tear or to reflect new branding or interior configurations. Airlines typically refresh their seats every two to three years, retrofit their cabins every five to seven years and replace or update their oxygen systems every decade. Add to that the record number of aircraft being delivered over the next few years — in addition to historic high production and a growing install base — and the results are a surge in demand for aircraft cabin interiors.

SWISS Screen slide for Horizons
“There’s no question that this is going to provide us with the opportunity for deeper relationships with our customers, both airlines and original equipment manufacturers (OEMs),” said Ortberg. “And with that, we will be able to better develop next-generation solutions that meet customers’ needs and differentiate us from our competitors for the long run.”

In addition to a broader offering of products and services, the combined information and resources — such as Rockwell Collins’ business jet dealer network and B/E Aerospace’s predictive database of major aircraft maintenance events — will create new ways to serve customers. For instance, when an aircraft is undergoing avionics upgrades, cabin interior equipment maintenance, upgrades, and retrofits can happen simultaneously. This translates into more flight time for that aircraft and potentially more revenue for Rockwell Collins.

As part of Rockwell Collins, we have access to relationships and information that we didn’t have on our own, which will enable us to accelerate long-term growth,” said Lieberherr.

About 80 percent of Interior Systems’ revenues come directly from airlines, and it sells its seating and food and beverage systems primarily as buyer-furnished equipment (BFE). In contrast, Rockwell Collins historically focused more on OEMs such as Boeing, Airbus and Bombardier. Its avionics, flight controls, communications systems and other equipment are often purchased by the OEM as supplier-furnished equipment (SFE). SFE is selected by the OEMs and is on an aircraft when an airline purchases it. BFE is chosen by each individual airline and is often an integral part of that airline’s brand. Working together, there are opportunities to deliver more SFE and BFE to every aircraft while bringing Rockwell Collins deeper insights into customer needs.

Driving innovations from commercial to government

“We are particularly excited about Rockwell Collins’ relationships with military customers,” said Lieberherr. “Not only does this open doors to expand into the military markets, it also invites innovation across all business segments.”

us-army-379036_1920.jpg

Approximately 3 percent of B/E Aerospace’s portfolio was focused on government products and services. Rockwell Collins’ strong presence in both commercial and government markets has translated into a demonstrated ability to bring commercial products into the defense industry. For instance, it has ruggedized its Pro Line Fusion® integrated avionics system for business aircraft to meet the rigorous mission needs of Embraer’s KC-390 tanker. Government customers realize numerous benefits through this commercial-to-government strategy, including lower costs and shorter development cycles.

B/E Aerospace’s broad product line could yield multiple commercial-to-government crossover innovations. And Rockwell Collins is equipped to identify and transition commercial products that will provide the greatest benefit to its military customers.  

From bringing products and services to new customers and markets, to using technology such as connectivity, information management services, synthetic vision and virtual reality in new ways, and building on mutual expertise and solid customer relationships, Rockwell Collins is poised to answer its customers’ call with more options than ever before.

“I’m eager to bring these two companies together, delivering more capabilities to our existing customers and introducing more products into market channels that were underserved,” said Ortberg. “I think there are great opportunities for us to deliver more value than ever before.”

Posted by Kalindi Garvin

3 Comments

  1. I worked for Collins Radio (the meatball logo) back in 1969 when they were in Richardson (TX) before they became part of Rockwell International. Mr. Collins (A Squared) could always be seen walking around the plant and offices. It was a great company to work for.

    Like

    Reply

    1. Ed Rogers N5AEA April 17, 2017 at 12:42 pm

      Yes, I too had the same experience as Hall, except starting in 1967 and until 1994. Yes, it is a great company to work for. As for me Collins Radio lives on through it’s Amateur Radio and HF Broadcast legacy products still in operation today. Like wise the innovations and technology provided by Art Collins will be ongoing.

      Like

      Reply

  2. The real question is when does the non-business traveler start to be a consideration for airlines? We are now treated like so much freight with cramped, uncomfortable seats, surly flight attendants, miniature airplanes and exorbitant fees at every turn. A company has a duty to treat customers with MORE than cursory notice. It should not always be about paying the CEO hundreds of millions and making sure stockholders get big dividends.

    Like

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s