Posted on: 06 November 2019 by Alexander Preston
Astronics Corporation has reported financial results for the three and nine months ended 28 September 2019.
Peter J. Gundermann, president and chief executive officer, stated that the company’s ‘light’ third quarter revenue was a partial consequence of the continued grounding of the 737 MAX and the resulting capacity challenge affecting the global airline industry.
“We are being affected pretty significantly by the 737 MAX grounding specifically. We put a certain amount of product on the airplane line fit and that revenue…is not too much affected because Boeing is continuing to build 42 ships a month,” he said adding that “a lot of our sales thrust goes to the aftermarket, to the airlines and the airlines essentially worldwide are down about 800 aircraft from where they thought they would be at the beginning of the year. So it’s a capacity crunch and it affects different companies in different ways.
“But one of the things that we’re being affected by is that the airlines are very reluctant to take airplanes down to put – unnecessarily to put on passenger amenities, which is largely what we put on commercial airplane.”
Drilling down to its individual business segments, Gundermann revealed that Armstrong has been subsumed into its Connectivity Systems and Certification (CSC) business in Chicago, and that Custom Control Concepts (CCC) has been rebuilt as it looks to conclude a ‘challenging’ development program, which should conclude in the fourth quarter.
Elsewhere, the company is evaluating the pipeline of its AeroSat antenna business.
“Our strategy has been to try to grow AeroSat in the critical mass. That strategy has resulted in significant losses and we’re basically reversing course and have made the decision to reorganise the company and consolidate much of its operations also into CSC in Chicago. And by doing that, we think we’ll be able to more efficiently leverage the technical and manufacturing resources required to pursue the AeroSat pieces of business.”
The move is expected to occur over the first half of 2020.