Since the 1980s, economy seats in domestic airlines
have lost anywhere from 2 to 5 inches in legroom pitch, with the least being Spirit Airlines with 28 inches. And seat width has shrunk too. At the same time, seats at the front of the plane have
gotten bigger and more complex. Airlines have been spending big to add more space and
comfort on board. In fact, airplane seats were a $2.6 billion market
globally in 2022, almost half of what airlines spent on their aircraft interiors. Really at the heart of that on board product is the
seat. That's what you're going to be spending the most time
in. The seats have developed from very simple seats to
very complex, very comfortable and high tech products. Seats are not all the same. On a typical aircraft, they range from economy to
business to first class. And recently, airlines have seen a willingness among
passengers to purchase more premium seats. Delta estimates its premium revenue will be 35% of
total revenue this year, compared to 24% in 2014. Emirates introduced premium economy last summer. And since then, over 160,000 customers have bought up
to this new cabin. Getting from A to B isn't necessarily what they're
selling anymore. Anyone can do that. It's that experience within the cabin. Competition is heating up as airlines upgrade their
cabins and design new premium seats with doors, privacy wings, wireless charging, even showers to win over
customers. Other airlines are also very conscious that people are
expecting a higher standard of experience and that will see them pay to go into
higher classes. Premium economy seats cost more to make, but bring in
more revenue for the airline. The goal of the airlines is obviously to make money on
all of these things, and part of that comes from making sure that passengers not only
buy the ticket today, but also buy it next time they're on board. CNBC got an inside look at Recaro's aircraft
seating factory to see how seats are made and to find out why they are becoming an increasingly
important part of an airline's business. Aircraft seating has come a long way since the early
days of commercial aviation, starting with wicker chairs evolving to those with plush cushioning and the
ability to lie flat. Over the last few decades, changing technology and
airline's thin margins have impacted the layout of the cabin and design of seats. There are also rigorous safety requirements like crash
and flammability testing so that seats are certified to fly. They are designed for reliability. They build these things to withstand not just a
passenger on them, but a 16g crash test experience. Seats and the space between them have also gotten
smaller, especially in economy class, while passengers have gotten larger. Modern economy class seats are
designed for people up to five foot ten and under 180 pounds, reflecting passenger sizes in the early 1960s. But the average U.S. Male is 200 pounds today. There are some manufacturers that are working on ways
to squeeze a few more seats in from time to time. But I do think we're starting to get, in some cases,
especially for long haul, towards the limits of what's reasonable and what passengers are actually going to
be willing to fly. There are some regulations around seat pitch that make
it harder to get to much closer together. You have to be able to evacuate the aircraft in a
timely manner, and the closer the seats get, the harder that is. Cabin configuration has changed, too, with more classes
like basic economy, economy, extra legroom, premium economy, business and first class. There's probably no more valuable real estate in the
world than a square inch on an airplane that's about to take off. And especially in the premium cabins. And so the airlines work very, very, very, very hard
to optimize layouts of the seats. American Airlines, Delta and United have been adding
more premium seats to their fleets. Premium economy is really on the rise and more and more
airlines are switching three class layout to a four class layout. Premium economy is often a separate cabin in between
business and economy that offers bigger seats for a higher price with similar amenities, but not quite the
lie flat business class experience. Seats vary depending on the route and the airline. Typically, long haul flights offer more legroom and
comfort than those on shorter routes. Airlines like Emirates and Etihad sell full suites
with closing doors, and some cabins offer access to a shower on board. 20ish years ago, it was let's get to a flat bed so
people can sleep on board. And today we're starting to talk about more privacy on
board, having an opportunity for passengers to sort of cocoon themselves in the cabin and not be interrupted
by other passengers or by cabin crew. Airlines order seats from seat manufacturers, not from
Boeing and Airbus. The market for aircraft seating is dominated by a
couple of players. Recaro, Collins Aerospace. There are a lot, though, of other smaller players,
especially as you start getting into the premium cabins. The airline customers, we are working together with the
premium airlines, they are normally they are using it for 8 to 10 years and then they are replacing the
seats with the next generation. Seats can last up to 30 years, but top tier airlines
typically fly them for 8 to 10. After that, they are often sold to a lower tier
airline or refurbished. With the recent delays in new aircraft deliveries,
airlines are pulling older jets out of retirement to keep up with the snapback in travel demand. And spending more for a new seat versus a refurbished
seat may not make financial sense for the airline. It really is to do with the lift that the airline needs
and how do they keep aircraft flying longer. But at the same time, being mindful that they wouldn't
want to invest too much in an aircraft that's near the end of its life. An airline can have hundreds of planes in its fleet,
and with each aircraft needing hundreds of seats, the cost can add up. For example, economy seats cost roughly $2,000 each, a
business seat with all the bells and whistles like lying flat can range from $70,000 to
$100,000, bringing the cost for a narrow body jet with 16 business class seats and 150 in economy to nearly
$2 million. Bigger planes like the A380 can have over 400 seats. From the airline perspective, figuring out which seat
to go with is a complex math formula. How much is it going to cost me today? How many seats can I fit on board? How much is it going to cost me to maintain them going
forward? The seats are way too cheap, I need to tell you,
because if you look into an aircraft, the seat and the cabin, it's less than 5% of the investment of the
overall aircraft. If you're fitting out an A380 with the volume of seats
and you've got first class and business class, then you could easily get
into tens of millions. If it's an A320 and it's completely fitted out with
economy seats, it's in hundreds of thousands. And it very much depends what you're changing. When it comes to designing a new seat. A lot of things come into play like weight cost,
electronics type of aircraft and the route it flies. In the end, it's a differentiator. That's also the reason why the airline is willing to
customize, to change and adapt the seat according to their needs, because all of them are
flying more or less the same or similar aircraft. It's the first cabin product you'll see. Generally speaking, when you get on board the
aircraft. So it's really important to make a great first
impression. People want a cabin experience where people come on to
the cabin and are wowed, and that may be from the smallest things to really
advanced systems, which really differentiate the experience. The hardest part for us is to get the most space out a
given environment and lower the weight to the absolute minimum. And all the electronic parts which are being added are
taken away from that goal. Airlines and seat manufacturers are very secretive
about their designs. All the new platforms are designed in-house from
scratch. Usually, then the airline comes with a certain idea
and we collaborate with them and then we adjust the seats to their needs in terms of
trim and finish colors, textiles, also special features. Designing new seats takes several years. The time it takes to design a seat from scratch until
it's put into service is roughly three years for economy and four for business class. U.S. airlines like Delta have been making a bigger
push into premium seat offerings and said that premium growth is outpacing its main cabin, increasing 25%
year over year. When we decided to embark on this new first class seat,
we listened to our customers and they told us that there were four things that were really important to
them — privacy stowage, productivity and comfort. So from a privacy perspective, you'll notice we have
these great privacy wings that we've added to the seat, as well as a center divider between the seats and the
back of the seat. We have both a personal item stowage as well as a
laptop stowage. The new Delta first class seats started rolling out
last year on the Airbus A321neo. It's a multi, multi-million dollar investment. There's 20 of them per aircraft and we have 155
aircraft on order. So that's that's a big chunk. And we have several programs down the line that will
receive this seat as well. There's a trend to more privacy due to the experience
of the pandemic. So you have more of a cocoon situation. It just feels better and it's easier to work in. Delta rivals United and JetBlue recently unveiled new
first and business class seats with more privacy as well. United plans to offer wireless phone charging
and winged headrests. The airline also offers its Polaris product, which are
lie flat seats on some domestic routes. Jetblue recently redesigned its mint class to offer
seats with sliding doors. We do still see a demand for things like bars on
aircrafts. You'll see that on A380s, the new triple sevens. I think really what the airlines are trying to get the
balance of is how do you give that privacy that you might get from a premium or a first class product
and have those social areas such that the customer can pick when they want
to be private? They can be private then when they want to socialize,
they can go to social areas. A transatlantic ticket in business class can cost four
times as much as in coach. The majority of seats on aircraft are made up of
economy class, which has been hovering around 80% of the seat share on planes over the last five years. What the airlines and the customers are asking for, for
sure is comfort. And say economy people want to have power at the seats. There really is a mix of some want TV screens where
some want tablet holders. Airlines have spent years trying to fit as many seats
into the economy cabin as possible. Airlines could reduce pitch a little more if they
wanted to and probably got away with it. It does become a business question of whether
passengers would continue to fly them or not. I do think we we reached the limit and we are still
working on on some products where we kind of stretch the physical
boundaries. As for standing or stacked seats, that's not something
we will see anytime soon. With all the certification requirements, which are
there for a good reason, this really also slows down and limits somehow the possibilities for the different
opportunities you might have maybe on a bus or on a train. The demand for seats will continue for the foreseeable
future as the number of people traveling by air is expected to grow over the next two decades. So much so that an estimated 22,000 new aircraft are
needed by the end of 2041 to keep up with demand. With the rebound of the industry and now the rebound,
especially for Leisure Traveler, is more or less back on a pre-COVID level. Business is lagging behind, but passengers who haven't
traveled since quite some time, they are booking normally one higher class. If they have booked before economy now they are booking
premium economy or if they have flown on premium economy before now they are very often booking a
business class, which means the planes are really filled from the front. As far as what kind of seats you can expect. The trends are pointing towards more premium products. We're starting to see flatbeds rolling out more and
more across the A321 XLR, or LR families. We're seeing it on some 737 Max fleet as well. Depending on how far the airlines fly and what their
sort of target market is. So that is definitely something that is a growing
market. And for the airlines that have that almost long haul
international service that they're running on single aisle planes, it is going to be a trend for the
foreseeable future. It's about how we tune the experience so that when you
walk from your house to your car to the aircraft, it's seamless. That's what people want. It's going to be bringing more and more of those
features that we see in automated homes and advanced cars. More and more of that coming into the aircraft such
that you have what you want when you want it and exactly the way that you want to
experience it.
