Koito Plunges on 150,000 Airbus, Boeing Seat Repairs (Update3)

Feb. 9 (Bloomberg) -- Koito Industries Ltd., the Japanese supplier of seats used in Airbus SAS and Boeing Co. planes, plunged a record 33 percent after saying it will repair about 150,000 seats because of falsified safety data.

The company fell by its 80 yen daily limit to 159 yen in Tokyo. It was the biggest decline since the stock began trading in March 1988. Parent Koito Manufacturing Co., a Toyota Motor Corp. affiliate, fell 9.8 percent, the most in more than a year.

Yokohama, Japan-based Koito will fix seats in some 1,000 commercial airliners and may also pay compensation, President Takashi Kakewaga told reporters yesterday. Singapore Airlines Ltd., All Nippon Airways Co. and Continental Airlines Inc. have also postponed the introduction of new planes because of the late arrival of Koito seats.

“There is a risk that the investigation scope will widen and the issue will drag on,” said Yuichiro Isayama, a Tokyo- based analyst at Goldman Sachs Group Inc.

The seats to be fixed are in planes operated by 32 airlines in countries including the U.S., China, Japan and Singapore. Koito plans to make all of the repairs, which predominantly affect Boeing and Airbus aircraft, this year.

Koito said last week that the axle in a new seat design had failed a safety test. Other seats were covered in uncertified materials and some had unauthorized design changes made. Seat coverings are important for slowing the spread of aircraft fires.

JAL, ANA

Japan Airlines Corp., which uses Koito seats in 184 planes, said yesterday regulators gave it permission to continue operating aircraft until repairs are made. All Nippon, Japan’s second-biggest carrier, said it uses Koito seats on 141 aircraft. Neither airline’s statement said how many planes would be affected by the repairs.

Singapore Airlines said last week that late seats would force it to delay the introduction of a new Airbus A380 and planned revamps of cabins in existing aircraft.

Airbus has been banned since September by European aerospace safety authorities from delivering commercial aircraft fitted with Koito seats. The Cologne-based European Aviation Safety Agency withdrew its production organization approval for Koito last year, saying the company was no longer a trustworthy manufacturer and wasn’t sharing enough information with European clients, according to Daniel Holtgen, an EASA spokesman.

To contact the reporter on the story: Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net