ATI Inc. is a global company headquartered in Dallas, Texas that produces specialty materials, including titanium, nickel-based alloys, hafnium, zirconium and niobium, amongst other materials for the energy, medical, electronics, defense, and aerospace markets.
When you become CEO in July this year, what will be your top priority for ATI Inc.?
My top priority is to accelerate the strategy we've started and continue investing in capabilities and capacity to support our customers during this unprecedented ramp as we emerge from COVID. Although supply chain disruptions have started to settle down, I anticipate additional shocks due to the geopolitical atmosphere, largely due to the Russian invasion of Ukraine. We saw a rapid shift in titanium sourcing for aerospace, which created significant demand and highlighted the importance of diversifying our customer base.
Today, we are supplying materials to all major OEMs and are present on every airframe and engine platform flying today. Partnering with OEMs has positioned us well; we are seeing continuous demand as customers seek dual sourcing and move away from single points of failure. My focus will be on growing our business by supporting this diversification and ensuring we can meet these needs.
Can you give an overview of the materials that ATI provides for the aerospace industry?
We provide titanium and nickel alloys for the aerospace industry. Nickel alloys are used in the hottest sections of engines due to their superior strength, while titanium is slightly less strong but essential for other parts. These materials are subject to extreme stresses, requiring precise controls in engineering and quality inspection to prevent defects.
In addition to titanium and nickel, we produce niobium and zirconium alloys for military, nuclear, naval, hypersonic, and space applications. For example, our C103 alloy is used by all space launch companies, enduring the extreme conditions formed during rocket launches.
The focus is on creating lighter aeroplanes and hotter burning engines to drive energy efficiency. Our customers aim to achieve this by developing new alloys that can withstand higher temperatures and stresses. We partner with them to ensure these materials meet stringent quality and safety standards, focusing on clean melt processes to drive quality even higher. We work on developing new operating procedures to ensure defect-free products, which is crucial given the high stakes of aviation safety. The emphasis on cleanliness and quality has intensified, particularly with regulatory bodies like the FAA and European groups, as we continue to raise the bar on safety and performance.
Why did ATI’s focus shift to aerospace during the Covid pandemic, and what aftershocks can still be felt today?
During the pandemic, we identified our strengths and technologies that provided value to our customers in aerospace and defense. This focus was reinforced by our acquisitions made in previous decades, such as AllVac for jet engine materials, Wapshang for nuclear expertise, and Ladish for forging capabilities.
Also, the pandemic led to a rapid decline in global air travel and a shrinking aerospace industry. As we emerged from it, we saw a phenomenon referred to as "revenge travel," where people quickly resumed traveling, creating a violent recovery in demand. Within a year, we returned to 2019 levels and have since surpassed them. In addition to this, international travel is just starting to ramp up, causing further stress on the supply chain, especially with disruptions in the titanium supply chain from geopolitical events and restrictions on Russian materials.
How is ATI adapting its operations in line with the global movement towards more sustainable aviation?
We are adapting in two main ways. First, by creating lighter planes and hotter burning engines, we drive energy efficiency. We develop new alloys, such as Titan 27, which is 15% stronger and lighter, reducing fuel needs. Second, we focus on internal operating practices, using two-thirds recycled materials and partnering with customers to create a recycle loop for scrap materials. We are also investing in green energy technologies, like the new electron beam furnace in Washington, which uses hydroelectric power, supporting our customers' goals for net-zero emissions by 2050.
What is the main challenge ATI faces in 2024?
Our biggest challenge is meeting the tremendous demand for air travel, particularly as wide-body planes, which use more titanium, are just starting to ramp up. To address this, we are investing in capacity and capabilities to meet advertised build rates and develop new alloys and inspection techniques. We are also focused on navigating global supply chain shifts, such as restrictions on Russian titanium, and identifying opportunities to participate in and support evolving supply chains worldwide.
