Alcoa Inks $1.4B Component Deal With Airbus

Aluminum producer Alcoa (NYSE:AA) closed a major sale at the Farnborough Air Show in Britain. The company has signed a $1.4 billion deal with EADS Airbus to provide the European airplane manufacturer with aluminum and aluminum-lithium components for jet wings and fuselages, The Wall Street Journal notes.

The deal would place Alcoa products in almost the entire Airbus line of aircraft, including its A350, A320 and A380 jetliners.

Aluminum-lithium components have been promoted as an alternative to carbon-fiber enhanced plastics, adopted by Airbus rival Boeing (NYSE:BA) more than a decade ago.

Alcoa officials tout the strength and lower weight and cost of aluminium-lithium alloys compared to composite plastics. The company sells $3.4 billion in products to aerospace companies every year.

In order to meet demand for its aluminum-lithium products, Alcoa is building a $90 million production plant in Lafayette, Ind., as well as expanding other U.S. and U.K. facilities.

Company officials praised Airbus’ recent announcement that it will build a new airplane manufacturing center in Mobile, Ala., saying there “is room for both Airbus and Boeing” in the U.S. market.

Shares of Alcoa slipped fractionally in Wednesday afternoon trading.


Article printed from InvestorPlace Media, https://investorplace.com/2012/07/alcoa-inks-1-4b-component-deal-with-airbus/.

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