Recently launched manufacturing giant Arconic reports a new, multi-year contract with Airbus that it values at approximately $1 billion, to supply aluminum sheet and plate products for multiple commercial aircraft programs. The deal, the full terms of which were not released, goes into effect in January 2017, and establishes Arconic as the sole supplier to Airbus for specific applications, including some wing, fuselage, and structural components.
The supplier noted its most significant gain in the contract would be its increase in the share of its supply for the A320 family, the single-aisle commercial aircraft program that is the fastest growing Airbus series. (A320 jets are assembled at the new Airbus production center in Mobile, Ala., and at other locations.) “This large contract is a further important step to expand our leadership position in the aerospace industry," stated Klaus Kleinfeld, chairman and CEO of Arconic.
Arconic Inc. was established late last month following Alcoa’s spin-off to shareholders of its various engineered products and market-focused lines of business, including aerospace, automotive, and construction products. Those operations now comprise Arconic, while the primary aluminum-focused operations continue as Alcoa.
The new Airbus contract picks up on long-term agreement announced in 2012, in which the business (then, Alcoa operations) were confirmed as long-term suppliers of aluminum sheet, plate, and hard-alloy extrusions to Airbus.
In January 2015, Alcoa reported it has reached a new multi-year agreement with Airbus worth approximately $110 million to supply titanium and aluminum forgings for aerospace products.
Last October, Alcoa reported its largest-ever contract for aerospace fastener products with Airbus, valued at approximately $1 billion and involving products in multiple materials for every Airbus platform.
Arconic noted this agreement is the first to include aluminum and aluminum-lithium alloy material processed on a new plate-stretching line at Davenport, Iowa. The stretching process reduces mechanical stress introduced by the plate rolling process, making the material easier to machine, form, etc. The line is not due to come online until 2017, but it will allow Arconic to produce “the largest, high-strength monolithic wing ribs in the industry.”
"Partnerships like this with industry leaders are core to our strategy and this contract is another proof point of the potential that lies in it,” according to Kleinfeld.