The recent rebound in commercial air traffic due to rising business activities alongside substantial increase in defense spending across nations looks buoyant. Aerospace players like Triumph Group Inc. (TGI) are confident of benefiting from increased demand for new Aerostructures products, equipment and services related to repair and overhaul. In such a scenario, contract notices and collaborations are anticipated to strengthen Triumph’s market position while inducing growth.
Such a strategic cooperation agreement–inked recently–needs special mention. Triumph Insulation Systems, a subsidiaryofTriumph Group,announced that it has entered into a long-term contract with DAHER-SOCATA, a subsidiary of DAHER Group. The contract is expected to provide full life cycle of thermal and acoustic insulation systems for the international aerospace market.
The venture calls for Triumph and DAHER-SOCATA to provide the insulation systems engineering on A320, A330 and A350 programs. Triumph had already been producing large volumes from its existing operations in Beijing, China. Moreover, DAHER is fabricating the small series of systems at its facility in St Nazaire, France. The systems manufacturing for the above programs will thus be shared between the two big banners supported by their respective expertise. Post manufacturing, the systems will be installed into the aircraft, directly in the final assembly lines in St Nazaire and Hamburg.
Triumph Group’s collaborative efforts with DAHER seem to be the next logical step in providing the airframe manufacturers with state of the art insulation systems, thereby expanding the company’s business with Airbus.
Based in Wayne, Pennsylvania, Triumph Group offers a variety of products and services to the aerospace industry. The company serves commercial and regional airlines, air cargo carriers, as well as OEMs of commercial, regional, business and military aircrafts. It faces stiff competition from its peers, such as AAR Corp. (AIR) and Goodrich Corp. (GR).
We currently maintain a long-term Neutral recommendation on the stock. Triumph Group has a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).
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