Hexcel Corp HXL

Hexcel Composites Form an Increasing Share of Modern Aircraft

Hexcel is one of the three major manufacturers of advanced composite materials (primarily carbon fiber and resin) for the aerospace and defense industry, though it supplies other industrial markets as well. Composites as a percentage of aircraft weight have increased with each generation of aircraft development as they are strong and durable enough for aerospace purposes but generally lighter than metal, which allows airlines to save on fuel expense when operating a lighter plane. We think this trend will likely persist over the next decade or longer, as aircraft development and replacement is a slow-moving process and several important aircraft types, notably narrow-bodies, still have low composite penetration. Hexcel's strategy is to provide composite materials to build successive generations of aircraft within the very consolidated aerospace and defense industry. The company has, over the years, expanded into multiple verticals, experienced downturns, and subsequently rationalized its product lines away from leisure and other undifferentiated applications.