Wesco Aircraft Holdings Inc. (WAIR - Snapshot Report) announced extension of its contract with PCC Aerostructures, a business wing of diversified metal components and manufacturer, Precision Castparts Corp. (PCP - Analyst Report).
The terms of the contract will remain effective till Dec 31, 2016. The agreement offers supplementary services under an array of just-in-time and long-term contracts with PCC Aerostructures.
In addition, the extended contract will expand the number of PCC Aerostructures’ units and parts as was mentioned in the original contract. Precision Castparts have a long-standing business relationship with Wesco Aircraft. This collaboration will allow Wesco Aircraft to meet the growing aerospace infrastructural requirements of PCC Aerostructures with ease.
The company beginning in 2013 secured another extension for a just-in-time agreement with Triumph Aerostructures – an operating unit of Triumph Group Inc. (TGI - Analyst Report). The deal will run through Oct 31, 2016.
We believe Wesco Aircraft's first-rate service quality and efficient execution of contracts enabled the company to recieve these contract extensions. Wesco Aircraft’s share of product purchase from Precision increased to 21% in fiscal 2012 from the 2011 level.
Meanwhile, the integration of Interfast Inc. has also strengthened Wesco Aircraft’s position in the market which will aid it to clinch high-quality contracts in the future. Currently, Wesco Aircraft holds a Zacks Rank #2 (Buy).
The increasing airline activities seen in the emerging countries of Asia would cause demand for aircraft to rise sharply. Companies like Boeing and Airbus are expected to profit well from this growing trend. This in turn will benefit aerospace industrial equipment providers like Wesco Aircraft.
Last month, Wesco received a large order from Airbus for the delivery of aerospace fasteners and hardware components for several of Airbus' aircrafts.
Another well placed aerospace company that stands to gain from the demand hike is Zacks Ranked #1 (Strong Buy) Erickson Air-Crane Incorporated (EAC - Snapshot Report).
Valencia, Calif. based Wesco Aircraft distributes and provides supply chain management services to the aerospace industry in North America and internationally.