Story ID: 
Zodiac Boosts Delivery Rates as Recovery Continues
By: Guillaume Lecompte-Boinet
Caption: Aircraft equipment maker Zodiac could take another three years to fully restore profitability.
Word Count: 242
Aircraft equipment group Zodiac Aerospace expects to take another three years to return to “historical profitability levels” as it continues its efforts to reverse serious problems with cost overruns and delays in the delivery of seats and lavatories for program such as the new Airbus A350 widebody. Sales for the 2015/16 financial year increased by 5.6 percent, to €5.2 billion ($5.5 billion), but the French group suffered a further 14.1 percent decline in operating profits, to €269.9 million ($286 million), due to higher costs associated with its so-called Focus plan to resolve quality and delivery issues. It expects to fully implement the plan by the end of 2017.

Having added new production lines in California, Canada and Germany, Zodiac has managed to boost delivery rates significantly. For instance, it expects to achieve required rates for A350 lavatories by the end of 2016, having increased output from 20 shipsets in February 2016 to 70 shipsets as of mid-November.

Zodiac CEO Olivier Zarrouati told a press conference on Tuesday that cost-cutting measures will continue through the end of 2019. They include a reduction in personnel at its Santa Maria, California, seat-manufacturing facility from 2,000 to 1,250 people. He told reporters that sales growth will stay flat for the next fiscal year but that operating profits should recover by between 10 and 20 percent. The company expects a boost following the recent signing of a letter of intent from an undisclosed customer for what it says would be the largest ever order for business class seats.