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John Walton: Hello and welcome to The Chain, a special limited run podcast focusing on the supply chain around the 2026 Aircraft Interiors Expo — from The Up Front, the home of in-depth independent aviation journalism on the passenger experience.
Every episode, The Chain delves deep into the often creaking seats, cabins, and interior supply chain, sitting down with an industry expert from a company that makes up a key part of that chain.
I am The Up Front’s editor in chief John Walton, and today I'm joined by Jörg Schuler. Jörg, would you please introduce yourself?
Jörg Schuler: Thank you, John for the invitation. My name is Jörg Schuler, and I'm the CEO of Diehl Aviation. Diehl Aviation is a family owned company and we are a leading supplier in the aviation industry.
John Walton: And in terms of what Diehl produces, do you just want to give some headline product categories that you work in within commercial aviation?
Jörg Schuler: Basically, John, we are doing everything you can see entering an aircraft, namely the floor to floor: the floor to floor is basically the side walls where you look through the windows, the ceilings, and the overweight storage compartments where you put your luggage in. On top, we are doing lighting, cabin management systems, passenger service units, partitions, and all kind of monuments like galleys and laboratories — except the seats, that’s not what we are doing. And there are some other elements invisible, like aircraft ducting and some avionic systems.
John Walton: Fascinating and indeed, I had an interesting chat recently with Harald Mehring, one of your team members, about just what you're bringing to the Aircraft Interiors Expo. Returning to the supply chain. Where does Diehl sit? Who are your suppliers and who is it exactly that you supply?
Jörg Schuler: We are at a tier one supplier for, as I said, aircraft, cabins and systems serving the big aircraft manufacturers like Airbs, Boeing, Bombardier, and Embraer, as well as some bizjet companies, military customers, EVTOLs and obviously various airlines. And we are positioned between those aircraft manufacturers and airlines and a huge global supplier network.
John Walton: So when airlines are or airframers are selecting you, is that mostly supplier-furnished equipment — the airframer is selecting you for inclusion and airlines will have a choice of your product or maybe one or two competitors, or no choice at all, that’s just how the aircraft comes.
Or are the airlines themselves contracting with you and having your products installed on the aircraft at an airframer factory or at an MRO station if they're doing a retrofit? How does that usually work?
Jörg Schuler: Yeah, so for us, there are two relevant markets. For all the line fit products, the product selection is led by the aircraft manufacturers. So it's a seller-furnished equipment, but with a strong airline involvement in specification, namely customisation.
And then obviously you have the retrofit market, the aftermarket, the spares, where airlines order directly as for example, in the upgrades area for buyer-furnished equipment.
So we serve both models.
John Walton: And in terms of your production, what's the rough split? Is it 50 50 or something different?
Jörg Schuler: No, we are largely a line fit driven companies or I would say 75% is SFE line fit and 25% is aftermarket and BFE driven.
John Walton: And who are your suppliers? Do you transform raw materials yourself? Do you take components and integrate them?
Jörg Schuler: We are an architect and an integrator, so we are working on system level. And we have a huge supply chain delivering from materials and parts up to subsystems, which we are then finally integrating.
John Walton: That's a really useful overview of where you sit. Taking the supply chain as a whole, right now — obviously we're talking just at the end of the week before the Aircraft Interiors Expo, the crisis around the Gulf is ongoing, the supply chain is strained as a result.
Taking the current state, so right now, but also perhaps two, three months ago into context, so we don't only focus on the current crisis: what is the state of play in the supply chain for you both in terms of incoming and in terms of your products outgoing, both to linefit and to retrofit.
Jörg Schuler: We see a very strong ramp up demand from OEMs where those are still very fragile supply chain impacting stability and resilience. And that's not only because of the just-mentioned conflict in Middle East. We also see aircraft staying longer in service.
Therefore, the in service fleet increases a lot. That drives additional demand in retro activities. What we experience is that the supply chain after COVID is still very much constrained and not fully normalised. And what we can say, there are many ongoing challenges from cost inflation. There are capacity limits. There are some skilled people missing and the just-mentioned geopolitical impacts.
We see issues on transportation, but also potentially still on tariffs, and this is why we are focusing currently more on resilience — on international capacity increase with our new sites in Querétaro, Mexico and in Craiova, Romania to stabilise our deliveries over short term efficiencies.
John Walton: That makes sense. And in terms of what you are producing at those sites how does that affect what you're supplying? So is that a localisation site? Is it a centre of competence? What's the purpose, I suppose, of those regionalisations?
Jörg Schuler: Looking first towards Mexico, a lot linked to customer proximity. We are going to serve the big airlines and OEMs in the Americas. And that's driving the product portfolio, which we are delivering from Mexico. Craiova, Romania, indeed is helping our value chain and especially in terms of increasing capacity. So there's a lot of manual labor linked to our activities there. And then we are delivering from there to our home sites in Germany and then to the final assembly lines, mainly in Europe.
John Walton: In terms of that state of play, I guess, what are the impacts of that on you and how are you dealing with them?
Jörg Schuler: There are many challenges for us in the supply chain. We see high pressure from airlines on the aircraft manufacturers to increase the output. And then we see on the other hand a huge volatility in the demand. We see a lot of late configuration changes and these are cascading down to us and then obviously into our suppliers.
So what are we doing with it? We push for much closer planning, integration with the manufacturers, with the airlines, also ensuring better and improved data and transparency. We are also trying to align the demand with our suppliers to support the customer ramp-up. And what I said, through the many changes we are in, we try to be much earlier involved to de-risk those change management activities.
John Walton: When you were talking about greater integration across production programs, can you drill down a little bit into that?
Jörg Schuler: There is a usually a cascade of demand. What we are trying to do is, looking longer forward, securing the demand, which we are getting and give much more commitment to our suppliers, giving them long-term view and the confidence that we will order a certain quantity. That will usually help to stabilise the supply, which as I said, is still very volatile.
John Walton: How do you balance that, which I think is certainly something that echoes a lot of what the rest of the supply chain is saying? You attempt to bring in more stock and be more predictable. But how do you balance that with increasing demands for customisation by airlines — not perhaps on all of your products. So for example, I would imagine that the air ducting situation is not highly customised by airlines for you, but for some of your other products which are more customer facing, let's say, how do you balance that? How do you set and maintain expectations around customisation there?
Jörg Schuler: First, usually we know which type of customers are behind the orders. So we already try to anticipate and secure raw material with our suppliers. So we ask them to already prepare and order. And then the second activities that we try to prepare semi-finished goods so that we shorten the lead time when the final customisation is coming. And you are right, that’s not happening on the ducting side, but on highly customised products, semi-finished parts is a good means in order to protect against late changes in volatility.
John Walton: Looking at the challenges above you in supply chain, so in terms of you supplying the the OEMs, what are the greatest challenges you're facing right now, and how are you how are you getting around those? How are you resolving them?
Jörg Schuler: I indicated it already a little bit. There's a huge demand coming from the aircraft manufacturers in terms of ramp up. Unfortunately there's a bit of volatility in that demand and that's where we try to smoothen that demand. We try to get earlier information: a better forecast, a higher transparency, and that's what we are trying to cascade down to our suppliers to ensure the stability at the end of the day.
John Walton: And I suppose to elaborate on that, the flags that airframers have given about their desire to — particularly around narrow bodies — substantially increase the production rates. They've been signalling that for some time. I would imagine you have been signalling your own supply chain, yet for reasons not necessarily within your control, the airframers have not been able to achieve those ramp up targets.
How does that affect you? What are the negotiations that you have to have then with your suppliers to say, actually the OEM didn't achieve rate whatever it was, the higher rate. And so this is how we need to change that. How does that work?
Jörg Schuler: That, that's very difficult negotiation, obviously, because usually the anticipated forecast is not materialising. But our suppliers as they're very much upstream have organised the material, have hired the the labor force needed in order to produce and we are trying to mitigate by giving commitments.
We are putting buffer where we can. And in some cases we provide both operational industrial support for our key suppliers, and sometimes because if you always have this start and stop in the supply chain, we even help partners sometimes to get access to finance because sometimes they have ordered material and then they are short for cash to, to plan for additional activities.
And that's where we are trying to support, with some external contacts as well. But for sure, what we are doing on top is we try to push also for standardisation to get out the high variability in the products. We also see that we can secure some double sources so that we can smoothen the demand between the suppliers whenever this volatility comes into play.
John Walton: So those are obviously some of the challenges that you're seeing in terms of the parts of the supply chain that are below you as well. What are some more in that category that you are experiencing right now, in terms of your own suppliers within the chain?
Jörg Schuler: Obviously what I indicated, but to make it very explicit, there is capacity and financial constraints, especially the very specialised and small suppliers. Then in the whole value chain, and that hits our suppliers as well, is a huge cost pressure. Material prices are going up, energy and labor cost are going up and this hits the supply base a lot.
Then what comes into play, we usually have a relative small sourcing volume as an aviation industry limiting our sourcing choice. And many of our suppliers are, for example, also involved in the automobile, in the car industry, which is not going very well. So there are challenges for them on top.
Maybe one additional point, which comes to my mind as a challenge below us in the supply chain, is there are some single source dependencies, which we cannot avoid because of certain technology limits and the effort for dual source certification efforts.
John Walton: And is there a solution to that? Do the regulators need to be more flexible? Open? Do we need to reduce barriers to regulatory compliance? Does there need to be more of a change in tactic through standardisation? What's the answer to those problems?
Jörg Schuler: There are indeed several answers. A long term stable planning view would already help. Less volatility higher commitment, demand management, a smoothened demand plan. That would obviously help. And then if we could avoid this high complex customisation, especially for the narrowbodies where you have a high production rates, a more standard product where we can order more repetitively, this would help on top. So better planning, higher standardisation would already be two crucial elements to stabilise the current situation.
John Walton: On that, it seems a little bit like you're talking about the longer range narrow-bodies, which have substantially more cabin variability within them there: is that posing an issue for you. Is it the sheer variety within what used to be a fairly — a much more standardised product line for the airframers.
Jörg Schuler: Yes, there, there are indeed two effects. You see a trend towards bigger narrowbodies, long-range single aircraft, where you see three class arrangements these days, and obviously very high customisation. And the demand for even higher quality is driving a lot our efforts.
Also, if you see the most modern lighting scenarios it's very highly customised. So yes, the complexity obviously is increasing with the bigger aircraft. What is coming on top, if we speak of single-aisles, and I take the example of Airbus, in the past it was a lot of A320s, now it's more and more A321s.
And obviously if you have an A321, the number of, for example, monuments like lavatories, is increasing on average, which is also an element which we need to have in mind in these ramp up scenarios.
John Walton: It's been really noticeable how some of the earlier customers for things like A321XLRs, but even some of the more premium cabin regular A321neos, made lavatory number choices which they have come to regret. So putting three lavs on rather than four, for example, for these aircraft which are hitting 160, 180 people where perhaps they did not have that number of passengers on in previous generations.
Jörg Schuler: Indeed. And if I give you one example because you asked about the complexity of customisation, if you take a lavatory and if you enter the lavatory you have those famous waste flaps. No one wants to touch them, but they are touchable and non-touchable. In the non-touchable they are sometimes electromechanical, or they are only mechanical, but touchless. So you have a huge variety only for a waste flap. And we need to wonder why one standard would [not] fit the needs of everyone. And you find dozens of examples of those in the whole aircraft, in the whole cabin.
John Walton: It's always been really notable to me how for an aircraft laboratory, which one might presume was fairly standardised there are any number of different ways for the doors to work, for example, or as you say, for the waste flaps.
I'm still surprised that the number of people — obviously, I fly a lot — but the number of people who still don't automatically understand how one of the bifold doors works on an aircraft. And the people who, purely getting in and out, it feels like there might be some standardisation work there that might well be useful.
Jörg Schuler: Indeed, I believe one normal door, one bifold door would usually do. I guess on our single aisle lavatories we have around 12 part numbers for doors. So you see the variety which we are dealing with, and that's not very obvious for the end customer.
John Walton: One of the questions that I'm asking everybody this time round is to wave a magic wand and solve one problem with your supply chain. So wave your wand, Jörg. What is the supply chain problem that you are solving and how.
Jörg Schuler: If I could have a magic wand, I would raise supplier delivery performance sustainably above 95%. Having enough stock and buffer, having a good predictability, a low volatility, and what we just discussed, much more standardisation, and that's supported by a very seamless digital backbone. This would really help me very much.
John Walton: Of those — and that's a very sensible set of of ambitions that you’d like to solve — what are some of the more easily achievable ones there, and how can the rest of the industry help you in achieving them?
Jörg Schuler: We can achieve a standardised product if we all work together, going from the end customer to the OEM to the big tier 1s who design and build. If we are all aligned in that wish, we certainly can do a lot.
And the second is we can achieve a higher predictability by collectively looking really forward at what the potential disturbances are, and try to mitigate them all together in a collaborative and collective way.
John Walton: Where does that standardisation effort have to begin? Is it airline customers? Is it airframers? Who needs to take that first step there?
Jörg Schuler: I would say it's a combination between the OEM and the suppliers like us, because we could make common proposals who help to ease the configuration of the aircraft. And then it's nicely sellable to the end customer. But it needs to start between the OEM and the tier 1.
John Walton: And what is the forum for that to take place: is that at a special meeting? Is it at some sort of event? Where does that need to happen?
Jörg Schuler: I think there should be —and there are, by the way — regular exchanges between the big OEMs, but also the airlines and our technical and innovation teams in order to think into the future. And that's already currently happening, but maybe not to the extent in order to accelerate the effort on standardisation.
John Walton: Is it one of those issues where the urgent questions have in some way overtaken what might be the important questions? So people have been focusing on tactical solutions rather than strategic solutions?
Jörg Schuler: Indeed currently, we are more tactical. As I said a bit earlier, we are fighting for supply chain stability and a bit of resilience and that's managing and I would even call it fighting, day after day to enable the production. And in, in that everyday fight, we forget sometimes the long term strategy where higher standardisation is belonging.
John Walton: I'll be fascinated to observe how that potentially changes over the coming months and years. Well, Jörg, thank you very much indeed for joining us on the chain. Where can The Up Front’s readers and listeners find you in order to discuss more?
Jörg Schuler: First, it was a pleasure to discuss an exchange with you, John, and for everyone. Please follow our company, Diehl Aviation on LinkedIn and if you join AIX, please visit our booth on stand 7D20. Thank you.
John Walton: Thank you. We are looking forward to seeing you there. Listeners, readers in the transcript, you can find more of The Chain and all of our in-depth independent aviation journalism at the very heart of the passenger experience at The Up Front on theupfront.media. We'll be back with another episode very soon.
