When Boeing and Airbus Fight Over Airplane Seats, This Stock Wins

When Boeing and Airbus Fight Over Airplane Seats, This Stock Wins

As Boeing and Airbus bicker over the right seat width for airplanes, shares of the company that actually makes those seats may be poised for extremely comfortable returns.

Airbus proposes minimum seat width of 18 inches for economy cabin seats on long-haul flights, while Boeing thinks airlines, not aircraft manufacturers, should make that decision. As airlines strive to balance passenger comfort and cost efficiency, B/E Aerospace , the world's largest maker of aircraft cabin interior products for commercial airliners, could benefit most from this ongoing debate, having landed a few big recent deals with airlines and jet manufacturers alike.

Smaller lavatories mean more seats and higher profits
Most of an airline's costs on a single trip are fixed; they don't vary with the number of passengers carried. The airline operator will have to pay roughly the same amount for salaries, fuel, and landing fees, whether the plane is full or not. As a result, it makes sense for airlines to have as many seats as possible on a plane -- without sacrificing too much passenger comfort.

B/E Aerospace found a winning formula by incorporating its proprietary Spacewall technology into its modular lavatories. This frees up enough floor space in the cabin to add up to six incremental passenger seats per aircraft. Compared to having only one toilet per plane, as Ryanair has done, smaller lavatories seems to be a lesser evil for passengers. More importantly, passengers might not even notice the difference in size, since the extra seats will occupy unused space behind the restrooms' sink units .

In January 2012, B/E Aerospace was named as the exclusive manufacturer of modular lavatory systems for Boeing's 737 Next-Generation family of airplanes. It literally "stole" this $800 million Boeing deal from under the nose of Zodiac Aerospace, the leader in aircraft lavatories with about 75% global market share.

This deal is part of B/E Aerospace's new supplier-furnished equipment (SFE) business, in which it sells aircraft interiors directly to aircraft manufacturers such as Boeing, as opposed to its tradition of supplying these products to airlines. On the back of the first lavatory retrofit project Boeing awarded in April 2013, B/E Aerospace is optimistic about further contract wins from Boeing and other aircraft manufacturers. It has guided for SFE revenues to almost triple from $150 million in 2012 to $400 million in 2015.

The lightest aircraft seats in the world
More seats per plane are good news for airlines. But cramped conditions can lead to unhappy customers, and the extra weight of those additional passengers and seats requires more fuel -- and higher costs -- per trip.

Until airlines start charging passengers a based on their weight , B/E Aerospace's Pinnacle seats are probably the next best alternative for tight-fisted airline CEOs. These new Pinnacle seats are 15% lighter than current competing products -- and their slimmer lines create more legroom for passengers.

This past September, JetBlue announced that it will install Pinnacle seats for the economy cabin on its aircraft. This is a big endorsement from an airline like JetBlue, which has always prided itself on both high service standards and a lean cost structure.

JetBlue knows that comfortable seats play a big part in the overall flight experience. It recently introduced a new premium tier of selected "Even More Space" economy-class seats, with up to four inches of extra legroom. But even JetBlue's basic economy seats -- Pinnacles from B/E Aerospace -- offer a decent minimum legroom of about 33 inches.

If JetBlue can give passengers greater comfort while saving more fuel, it is easy to understand why more airlines are likely to warm up to B/E Aerospace's Pinnacle seats, just like JetBlue.

In a competitive market, airlines are increasingly trying to get ahead by cutting costs while offering standout services. In light of this, the current seat width debate should be viewed in the broader context of airlines' efforts to maximize their profits on every flight. No matter how much Boeing and Airbus may squabble, I am optimistic that B/E Aerospace's innovative products will enable it to win more orders from airlines.

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The article When Boeing and Airbus Fight Over Airplane Seats, This Stock Wins originally appeared on Fool.com.

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