Boston, MA 09/15/2014 (wallstreetpr) – Alcoa Inc (NYSE:AA) recently announced joining hands with The Boeing Company (NYSE:BA) so as to facilitate plate products and aluminium products for latter’s commercial jetliners. Alcoa signed the multi-year accord with Boeing to materialize on the transaction worth over $1 billion.
Alcoa’s Expansion Plan Amidst Cheap Aluminium Price
Alcoa is looking forward to mint money through commercial airplane industry, in the backdrop of diminishing aluminium prices. In the light of all this, Alcoa Inc (NYSE:AA) is focussing its direction towards the diversification and expansion plans. The declining aluminium prices are a result of passenger jets’ strong demand.
Alcoa’s Biggest Ever Aerospace Deal
Alcoa announced that the Boring deal is the biggest one that it signed with any aerospace company. Alcoa also hinted for future collaboration with The Boeing Company, on account of higher strength and corrosion resistant alloys.
It is worth noticing that Alcoa Inc (NYSE:AA) will try to compensate through this deal, the hurt profits. The deal is more or less like an oversupply in the middle of its hurt profits through primary smelting venture. In the previous year, Alcoa has registered a loss of $2.3 billion, mainly because of smelting business related write-downs for the assets.
Alcoa’s Hurting Smelting Business
Alcoa Inc (NYSE:AA) has been suffering from smelting business, which is why, it also put the locks at its smelters in Australia and New York, while announcing Italy shut down too. In Brazil too, Alcoa has put a halt over the production of smelters. Since 2007, Alcoa Inc (NYSE:AA) has cut short its primary smelting business capacity by 28% or 1.2 million metric tons. Instead, it is now taking a paradigm transition towards aerospace industry, for which it has also invested money. The aforementioned scenario can be understood by the fact that Alcoa Inc (NYSE:AA) agreed to acquire England-based jet-engine parts maker, Firth Rixson Ltd. in June 2014.
