American Airlines Inc. dropped Zodiac Aerospace as supplier of lie-flat business seats on its Boeing Co. 787-9 Dreamliners and some 777-200s, citing delivery delays. Shares of the French manufacturer fell 9 percent.
“Zodiac is far behind schedule and continues to cause significant delays to our plans to improve the travel experience for our customers,” said Laura Nedbal, a spokeswoman for American Air. The carrier has canceled all future orders for Zodiac seats on those aircraft, she said.
American’s move underscores the rift with Zodiac over a shortage of flat-bed seats that has forced Boeing to slow handovers of the airline’s Dreamliners. Zodiac has struggled since late 2014 to keep pace with surging demand for the upscale berths used on long-haul overseas flights.
Zodiac shares fell as much as 1.95 euros to 19.25 euros and were trading 8 percent lower at 19.51 euros as of 10:20 a.m. in Paris. The Plaisir-based company didn’t immediately reply to e-mails sent to its investor relations department and external press representative early Friday, while a phone message to Zodiac Seats US in Gainesville, Texas, met with no response.
The interiors specialist, one of the top three seats provider for Boeing and Airbus Group SE, fell the most in 16 years on Sept. 16 after reporting a 40 percent drop in earnings that it blamed on delivery issues. That’s after the company had said the issues would be behind it by Aug. 31.
The American Airlines decision represents a “major blow,” Kepler Cheuvreux analyst Christophe Menard said in a note to clients, reducing his estimate for earnings before interest and tax in fiscal 2017 by 7 percent.
Late seats delayed the handover of American’s first two 787 Dreamliners to early this year from late 2014. Two more jets were parked in California desert storage after they were pulled from production lines to await laborious retrofitting because of the missing seating.
American has ordered 20 787-8s from Boeing and received its 11th aircraft Thursday. It should have 13 of the planes by the year’s end, Nedbal said. American’s first 787-9 — the second, larger version of the Dreamliner — is set for delivery by the end of 2016.
The program to refit the airline’s 777-200s used on international flights is a year behind schedule.
“We committed to our customers we want to give them a fully lie-flat seat experience when they fly internationally, so it’s just unacceptable at this point,” Nedbal said.
Zodiac will remain American’s supplier of business-class suites on the 787-8 Dreamliner, and will complete retrofitting 13 777-200s with the new seats, Nedbal said. Another 34 777-200s being reconfigured to carry more seats will be split between Zodiac and a new company, she said.