Alcoa Details More than $2.5 Billion in New Boeing Business
Alcoa Inc. (IW500/50) reported its long-term supply contracts with Boeing Commercial Airplanes are valued now at more than $2.5 billion, including multi-material fastening systems for each of Boeing’s aircraft programs, Alcoa’s largest fastener deal ever.
The metal and materials giant also will supply “ready-to-install” titanium seat-track assemblies for the three variants of Boeing’s 787 Dreamliner series, the wide-body long-range passenger jet. Earlier this year Alcoa capped a multi-year expansion of its aerospace portfolio, and significantly expanded its titanium holdings, with a $1.5-billion takeover of RTI International Metals.
Alcoa did not indicate the timing or duration of the several contracts.
The contract placements are notable because of the high volume of orders held by Boeing and Airbus for new commercial aircraft of all types, including narrow-body mid-range jets and wide-body long-range aircraft. New designs are being introduced by both OEMs, too, as they address the increased expectations of carriers for fuel-economy and reduced emissions. In emerging markets like Asia and Latin America, there also is considerable new demand as traffic volumes rise.
“Alcoa has positioned itself to win in a multi-material aerospace industry, and these deals are the latest proof points that our strategy is working,” stated Alcoa chairman and CEO Klaus Kleinfeld.
In October, Alcoa announced an estimated $1-billion, multi-year contract with Boeing’s rival Airbus SAS, noting then that its fasteners are in place on each Airbus platform.
One of the new Boeing contracts calls for Alcoa Fastening Systems & Rings to supply titanium, stainless steel, alloy steel, aluminum and nickel-based superalloy fastening systems for Boeing aircraft, including the new 777X and 737 MAX jets, as well as the 787.
A separate contact involves the Alcoa Titanium & Engineered Products (primarily, the former RTI organization) to become the sole supplier of ready-to-install titanium seat track assemblies for all 787 Dreamliners, expanding the scale of a supply program Alcoa has maintained with Boeing since 2007. Alcoa is supplying everything from raw material to finished part for the seat tracks, with processes that include titanium ingot melting and billetizing, extrusion, machining, processing, and assembly.
Seat tracks are structural assemblies that mount to a jet’s cabin floor, secure passenger seats, and reinforce the structure of the fuselage. Titanium seat tracks are stronger, lighter, and more corrosion-resistant than other materials.
“This contract, as amended by RTI and Boeing immediately prior to the acquisition, reinforces ATEP’s position on those (787-8 and 787-9) variants, and adds seat tracks for the 787-10,” Alcoa noted.
The new contracts expand on a +$1-billion, long-range contract for flat-rolled aluminum sheet and plate products that Alcoa initiated with Boeing in 2014. That agreement established Alcoa as a sole supplier to Boeing for wing skins on all of its “metallic structure” aircraft, and covered a number of other aircraft structural and wing rib and wing skin applications or other structural parts of Boeing aircraft. That agreement also established a deeper collaboration between Alcoa and Boeing on high-strength and corrosion-resistant alloys, including aluminum-lithium.
