Flying High B/E Aerospace Expands to Meet Global Demand

By Romi Carrell Wittman

Despite a brutal and prolonged downturn in the economy, super-first-class commercial airline cabins are a hot commodity – and these mega-million-dollar luxuries are manufactured right here in Tucson.

Unprecedented growth in this uber-luxury market is creating high-skilled jobs and boosting this region’s economic growth.

B/E Aerospace in Tucson currently employs more than 600 and has a substantial number of job openings. The business has grown so rapidly that B/E recently completed a multi-million-dollar expansion of its facility on South Pantano Road from 91,384 to 125,596 square feet. That footprint includes both office and production space.

The flight of this local division of a global powerhouse was turbulent early in its history – but recovered quickly with the advent of the Airbus A380. The staff expanded dramatically to more than 400 by 2010. The business has been flying high ever since.

Despite its relative anonymity here in Tucson, B/E dominates the global super-first-class cabin market. In 2011 it scored three super-first-class cabin contracts totaling more than $125 million. The company reported a 26-percent increase in earnings per share for 2012 and forecasts for 2013 are very strong.

“Over the last 18 months, we’ve seen the number of engineers double, and the manufacturing personnel increase by 50 percent,” said Doug Rasmussen, VP and GM. “There are still many positions open.” Skilled disciplines include engineering, design and certification, fabrication, carpentry, electrical, metal, sheet metal and painting.

Rasmussen said there is a clear business reason for this phenomenal growth. He points to the increased number of long-haul flights that simply didn’t exist just a few years ago.

“Emirates now flies direct to Los Angeles, Dallas, New York,” he said. “We’re seeing more long-haul flights originating out of the ‘BRIC’ countries, too – Brazil, Russia, India and China.”

These long, grueling flights have created a demand for more luxurious accommodations, something beyond what even first class can offer. Rasmussen said this can be a sound business decision for long-distance frequent fliers.

“If you’re a business executive that frequently flies overseas, these suites enable you to work for six hours, then get almost a full night’s sleep,” he said. “It’s a business tool and a health issue for people who regularly travel internationally.”

It’s a business tool that doesn’t      come cheap, however. A super-first-class roundtrip flight from Los Angeles to Dubai on Emirates Airlines A380

will set you back anywhere from $10,000 to $20,000.

U.S.-based carriers, however, have yet to cotton to the idea of super-first-class suites on their international flights. “They have a different philosophy,” said Kent Kroener, B/E’s VP of product development. “But they’re catching up to their international competition.”

Headquartered in Wellington, Fla., B/E has offices around the globe. B/E manufactures or distributes virtually every item you might find on an airplane – everything from the tiniest fasteners and screws to big-ticket items like lavatories and galleys. The company even has a division dedicated to reconfiguring the layouts of older airplanes, like the airline equivalent of “Extreme Home Makeover.”

The company got its start in 1987 and, after a series of acquisitions, grew to more than $3 billion in revenue across its three primary business segments – consumables, commercial aircraft and business jet, which includes the super-first-class suites.

Rasmussen himself joined B/E Aerospace when B/E acquired Bomhoff, the business jet cabinetry manufacturer, which he helped start in Tucson.

The concept of super-first-class luxury was born in 1999 when Swiss Air was looking to upgrade its first-class accommodations. The market took off with the introduction of the Airbus A380.

“It gives airlines the flexibility to really do a lot more with the real estate on the airplane,” Kroener said. “It’s the largest jet and it was an opportunity for airlines to introduce new flagship products.”

Emirates and Qantas launched their super-first-class products in 2004 and were among B/E’s first major customers. “We were able to integrate what used to be a side table and an ottoman and turn that into a full environment,” Kroener said.

Each airline customizes its super-first-class offering to fit its clientele and needs, meaning B/E has to stay on its toes to keep up with demand and customer needs.

“The ultimate goal would be to make the passenger forget they’re on an airplane, and rather consider themselves in a comfortable place to relax, work, lounge, dine and sleep – which is hosted by the airline,” he said.

The components of these high-end suites are manufactured at B/E’s facilities in Tucson and in Miami. Seats are manufactured in Miami, then shipped to Tucson for integration with the full suite.

The company is recruiting nationally to fill open engineering positions here while fostering a closer relationship with the University of Arizona to bridge its employment gap. “Over the last 12 months, we’ve developed a deeper relationship with Dean (Jeff) Goldberg of the (UA) College of Engineering,” said Rasmussen. B/E hopes this relationship will aid in finding talent skilled to fill its open mechanical and electrical engineering positions.

B/E also utilizes a maquiladora in Nogales, Son., for the manufacture of some items. “The maquiladora is owned independently and it has about 450 personnel,” he said, more than double the number from 18 months ago.

Kroener believes B/E will continue to be the market leader of the super-first-class segment. “B/E provides the highest-quality, first-class products with high product reliability and design integrity,” he said. That, combined with B/E’s history in this market segment, will enable it to remain the market leader, he said.

With the introduction of the new aircraft types – the Airbus A350 and the Boeing 787 – the demand for super-first-class suites will only increase.

“We need to manage the ramp-up well,” added Rasmussen. “It’s all about creating a product that helps the airlines meet their revenue and passenger goals.”

 

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