We’ve got some parts of our business that are adjusting quite a bit better than other parts of our business, and we’ve got to fix that on an operational basis. But for the most part, I don’t think we’re going to long-term be sitting here complaining about inflation as a reason why we can’t achieve good margins.
Michael Ciarmoli: Okay, okay. It sounds like, are you getting real pricing? I mean, are you pricing above inflation or just trying to keep pace with it or
Pete Gundermann: For the most part, we’re adjusting where we think it’s going based on when we think we’re going to have to execute certain programs. We’re also making some use of surcharges and we’re going to our customers and saying, this thing that you want to buy is costing us a lot more than we expected. And in many cases, customers are agreeing to pay that surcharge.
Michael Ciarmoli: Got it.
Pete Gundermann: In some cases, that’s being reworked into the base price. In some cases it’s a temporary arrangement that will go away later. We’ll have to deal with it then. But for the most part, I feel like we’re staying on top of it and the relatively recent ramp in bookings works to our favor.
Michael Ciarmoli: Got it. Got it. And then just one more, I mean, you talked about wide-bodies. Can you kind of just remind us what your ship set content there is? And then it seems like you called out some older platforms, so it seems like some of these older ones are seeing retrofit opportunities. I mean we know where, where the A350 and the 787 are going right now. So I guess I’m asking is it seemingly maybe more sort of retrofit demand right now and then just maybe if you can give some color on the content.
Pete Gundermann: Sure. We do a number of things in wide-body airplanes. The most prominent though are IFE related. Right? So most every wide-body airplane that comes off a production line gets a seat back display in every seat, nose to tail. And for quite a few years now, we have been the prominent provider of power, for example, to those systems, the major system manufacturers. So when somebody buys an 87 or A350, they check the boxes, they want provider A, B, or C, and whichever one they pick, they get Astronics as the power system. Additionally depending on whether they pick A, B or C, we might do other parts of the system, theoretically, file servers, wireless access points, data loaders, things like that. And then we also do wide fit work.
So it’s not uncommon for a widebody airplane on the production line, to be somewhere in the neighborhood of $250,000 in revenue. I mean, in theory it could be $0.5 million or more, but the aftermarkets important too. The aftermarkets important because this IFE product line, when you think about it, it’s kind of where consumer electronics meets the aerospace industry. The aerospace industry has very long life cycles for most of the airplane. Consumer electronics does not, right? It turns over in two years or three years. What you do today is obsolete two or three years from now. Powers €“ even power somethings basic as that or what people think of is basic is undergoing a lot of changes. I mean, the world spent a lot of money and time equipping their hotel rooms and restaurants and seating areas and airplanes with USB power type A, now type C is prominent, and they’re not compatible.
They’re completely different. So one of the things that’s great for just having airplanes flying is that life cycle effect takes place and the systems need to be upgraded. If they’re sitting in the desert, they don’t need to be upgraded to be blunt. So that’s all helpful. We like airplanes flying. It doesn’t really matter if they’re new or old, that we just let them fly.
Michael Ciarmoli: Yes, yes. Got it. Makes sense. Perfect. All right. Let me I’ll jump back in the queue here. Thanks guys.
