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Non-Tech : Simula (SMU)
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To: stephen p barnes who wrote (717)10/30/1997 11:01:00 PM
From: Noblesse Oblige  Read Replies (2) of 1671
 
To the "thread,"

The seat order is confirmed to be from a British Air 10% owned subsidiary. I don't think it matters.

It is important to note that Simula had to be compensated for the special tooling that has to be done to make the seats work in the planned configuration. Given that the total order was for three planeloads of seats (roughly $ 1.5 million), it appears a reasonable assumption that the order will be repeating, or the incremental tooling expense wouldn't have been justifiable to British Air unless they used the announcement to "control" pricing and other issues with their primary supplier, BE Aerospace.

It is interesting to note that the "complaint" over the press release comes directly from that competitor, whose stock has been "rocked" since the Simula announcement regarding the British Air order. This is the same company that "bad-mouthed" Simula on the road trip prior to its secondary offering earlier this year, and appears to this writer (at least) to be engaging in "enlightened self-interest."

Why else would anyone get worked up over a $ 1.5 million order (in a market that may well approach 400-500 times that size in 1998!) that is at least a year away from delivery?

It seems obvious to me. Simula is starting to have an impact in the 16G airline seat business.

Now, if they can only normalize profit margins on that portion of their business!
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