Despite the downturn in the aviation industry, the UK’s Aerospace Technology Institute (ATI) believes good opportunities still exist for the country’s cabin systems suppliers and manufacturers. Founded in 2014 with a mission to lead and stimulate technology in the UK’s air transport industry, the independent company enjoys the backing of both government and industry to serve as a focal point for the technology community. Its annual budget of £150 million provides for grant allocations to companies to develop innovations that will provide long-term value to the UK.

In its latest insight paper, the organization focused on the UK Cabin Opportunity in cooperation with industry consultancy Achieving the Difference and Cranfield University. ATI noted that the UK possesses a world-class industrial supply hub in London with a concentration of creativity and innovation. The UK cabin interiors supply chain last year generated £2 billion in sales, 3 percent of which came from aircraft seating alone. Key capabilities include seating design and manufacture, galley systems, monuments, lighting, satcom and connectivity, and fabrics as well as electrical power systems, composites, and metallic structures.

Last November, before the onset of the Covid pandemic, ATI issued a forecast valuing the aircraft cabin interiors market at $495 billion by 2037, steadily rising at 3.3 percent from $19 billion in 2020 to $35 billion in 2037. Highlighted growth areas in that prediction included inflight entertainment, which the forecast estimated will rise by 5.4 percent annually, and connectivity, which ATI said would grow 7 percent annually over that span, both driven primarily through the retrofit market.

The realities of the pandemic have changed that outlook, with ATI now anticipating a four-year recovery to return to 2019 market size. It reported that both the original equipment and retrofit markets felt particularly severe effects, the latter brought to “a near hard stop in demand and slow recovery,” according to Will McClintock, the organization’s strategy manager. He added that airlines might currently lack financing for non-essential upgrades.

While ATI expects demand to return to near-previous forecast levels, it cautioned of a huge amount of risk and uncertainty due to several variables, including: success in controlling the virus by international governments; industry support packages to prop up airlines and manufacturers; passenger fears of infection; the depth of any anticipated financial recession; and even the traveling population’s attitude toward sustainability, all of which could vary from country to country. The recertification process for the Boeing 737 Max and the evolution of the widebody airliner market also remain considerations, the latter of particular concern for the cabin interior segment.

While a widebody cabin is worth several times that of a narrowbody, as platform choices consolidate, ATI sees demand for the widebody segment waning with weak order books across the board due to several factors. They include potentially reduced business travel as virtual meetings gain in popularity and capability, and for long haul routes, unease among travelers about extended periods in confined spaces. Meanwhile, according to ATI, the emergence of longer-range narrowbody aircraft will erode widebody market share.

Airline customers seek equipment that is sustainable, light, and energy-efficient. Cabin equipment manufacturers face increasing pressure to deliver high volumes on time in a short timeframe, all while keeping down costs.

McClintock, who spoke Wednesday in an FIA Connect panel session, sees a trend among airlines to buy direct from interior suppliers as opposed to choosing from aircraft manufacturer selections. To counter the tendency, OEMs are looking to provide their own interior product lines and attempting to bring more products under supplier furnished equipment (SFE) contracts. Some counter the trend harms the push for innovation, particularly among small and medium enterprises (SMEs), which have lower spending power and fewer economies of scale. As a result, potential customers might overlook SMEs or consider them too risky to enroll in SFE contracts, or they might choose to go to a larger company for a more integrated offering.