Thai Airways to hold talks with Koito on doomed seats deal

Discussions will be held for 60 days, without any mediator, as this is considered too costly. If no solution can be reached, the airline will proceed with legal action. Under the contract Koita agreed to install economy-class seating in five Airbus A 330-300 and six Airbus A 380-800.

The committee will also ask the airline’s legal advisers to investigate additional details regarding Koito – such as its financial statements – to find out whether the company has enough assets to pay its debts. Koito’s record with other airlines will also be looked into, the committee said. 

At the Thai Airways’ board meeting shareholders were informed about the progress 

of legal action being taking against Koito Industries – also known as KI Holdings – and 

Asia Fleet Services (Singapore) or AFS – Koito’s sales representative. 

Koito Industries is a Japan-based manufacturer of mechanical components such as railway equipment, headlamps and airline seating.

Thai Airways initially signed a contract with Koito and AFS to purchase economy-class seating for eight Airbus A 330-300s and six Airbus A 380-800s in November 2008. The contract stipulated that the seating would be delivered for the Airbus A 330-300s in January 2009 and for the Airbus A 380s in June 2010. 

However, seating was only delivered for three Airbus A 330 aircraft. Koito said it was unable to deliver seating for the rest of the five aircraft as materials used in their production did not pass fire safety standards as outlined by Japan Civil Aviation Bureau (JCAB). Koito also could not deliver seating for the six Airbus A 380 aircraft for the same reasons.

Meanwhile, the European Aviation Safety Agency (EASA) has suspended Koito’s manufacturing license for airline seat production. 

Koito submitted a letter to Thai Airways in May 2010 requesting a termination of the contract and identifying the reasons for its failure to deliver the aircraft seating. Thai Airways responded in August 2010 with a letter terminating the contract. It then filed for damages in October of the same year. 

Thai Airways also signed a contract with Koito to purchase economy-class seats for its six Bowing 777-300 aircraft in February 2006 with delivery of the seats set between May to December 2007. Koito was able to deliver seats for only five aircraft within the specified timeframe, but failed to deliver seats for the final aircraft until December 2010. 

Koito Industries came under the scrutiny of the Ministry of Land, Infrastructure and Transport of Japan in February 2010, regarding the production process and materials used in its airline seats. The company was allegedly involved in a seat test falsification, with allegations the company omitted parts of a testing process and used false figures from previous tests. Koito claimed they did this because of the “large number of orders and tight scheduling.” 

The scandal has affected over 150,000 seats of more than 1,000 Airbus and Boeing aircraft, owned by 32 airlines in 24 countries. It has even caused the delay of some aircraft deliveries such as All Nippon Airways’ new “Inspiration of Japan” – in particular, its premium economy seats.