Financial Times  May 24  Comment 
Edward Bramson stepped down from the board in March after shake-up
BBC News  May 17  Comment 
Staff at two branches of the American diner are striking over tips and pay rates.
Motley Fool  Apr 16  Comment 
The aerospace component manufacturer makes a difficult, but necessary, choice as part of its broader restructuring effort.
guardian.co.uk  Apr 11  Comment 
Staff to be balloted over chain’s plan to give service charge cash to kitchen staff in lieu of pay rise TGI Friday’s is facing the first strike over tips in the UK in an escalation of a row between waiters and the restaurant chain. In...
guardian.co.uk  Feb 11  Comment 
American dining chain won’t have to pay tax on rise for kitchen staff if funded by redistributing waiters’ card tips A new row over tipping has erupted at TGI Fridays, the American restaurant chain, following a proposal to redistribute card...
Clusterstock  Feb 9  Comment 
TGI Fridays is halfway through its plan to overhaul its entire menu by the end of the year.  The most recent update was revamping meat options, with new sirloin, ribs, salmon, and grilled shrimp menu items.  Fridays is trying to distance...
The Economic Times  Jan 15  Comment 
Bharti Family Office’s Gourmet Investments is introducing its first domestic seafood brand Typhoon Shelter, besides Sri Lankan chain Ministry of Crab.


Triumph Group (NYSE: TGI) makes aircraft components for the US military, Boeing, and Airbus. The company is heavily dependent on certain customers; in 2009, 30% of total sales went directly to Boeing.[1] The U.S. military is another of TGI's major customers. Triumph has received contracts to produce components for both the Boeing Dreamliner and the Airbus A380. However, the true value of these contracts depends in part on the future production levels of the aircraft.[2] 33% of Triumph's revenue comes from government funded contracts. Since the September 11 terrorist attacks, the US defense budget has increased by 35% and the number of contracts for military aircraft and weaponry has risen.[3]

Triumph makes goods that are used mostly in the commerical airline industry. It builds and designs parts that are standard across the industry, but it also competes for contracts that require the production of parts that are specific to only that airplane model. TGI generally bids as a subcontractor on a fixed fee basis. This means that it provides the parts necessary to the primary contractor. This style of contracting allows Triumph to specialize in certain production techniques, instead of forcing itself to diversify in the construction of all the parts of an aircraft.[4]

High fuel costs have pushed large airlines out of business or forced them to lower the number of flights they offer. This has the potential to hurt TGI's earnings, as fewer airlines means fewer new planes. High oil prices have also increased the demand for smaller, lighter aircraft which are more fuel efficient than commercial jets.

Business Overview

Business Financials

For the year ended March 31, 2010 (TGI's fiscal year ends on March 31 of each year), TGI had total revenues of $1.29 billion, a slight increase from its 2009 revenues of $1.24 billion. Despite the small increase in revenues, TGI's net income did not increase in 2010. Between 2009 and 2010, TGI's net income declined from $93 million in 2009 to $68 million in 2010.

Business Segments

The company operates through two main segments:

Aerospace Systems Group

Aerospace Systems Group makes and repairs gear boxes, hydraulic systems, landing gear, floor structures, and wing spanners for commercial, cargo, and military aircraft. Aerospace Systems' customers normally return systems that need to be repaired or overhauled.

Aftermarket Services Group

This segment repairs and overhauls the structure, frame, and engine of aircrafts. The segment is approved by the Federal Aviation Administration (FAA) as a Designated Engineering Representative (DER) to repair and overhaul these components. This means that it is authorized to certify the safety and quality of repairs and existing parts. The group also has received the necessary licenses to repair aircraft components through the European Aviation Safety Agency and the Civil Aviation Administration of China. These licenses are typically difficult to procure since they involve both safety and national security.[5]

There are also two marketing groups, one for each segment, which are dedicated solely to increasing the sales to Boeing Company (BA), Spirit Aerosystems Holdings (SPR), Textron's Cessna, Bombardier (BBD-T), and Raytheon Company (RTN). Triumph's sales are heavily centered on the United States. This is primarily because the airline and defense industry is heavily focused in the US. Airbus is Triumph's largest foreign customer.

Trends and Forces

Triumph's revenue is linked to the success of the Boeing 787 and Airbus' A380

In 2006, Triumph was awarded a contract with Boeing Company (BA) to produce the composite floor panels for the 787 Dreamliner. Triumph also won contracts, through Saab Aerostructures, Vought Aircraft Industries, Spirit Aerosystems Holdings (SPR), and Messier Bugati, to make the cargo door, composite ducting, hydraulic tubing, side windows, and brake assembly for the 787. These contracts have an initial value of over $49 million, but the final value depends on the success of the Dreamliner.[6] Triumph was also contracted to produce the floor panels and other parts for Airbus' A380. Like the 787 contract, the A380 contact is initially worth over $38 million, but has the possibility to grow in value depending on Airbus' production level.[2]

Triumph is dependent on US Defense spending

Roughly a third of Triumph's revenue comes from the defense market - mostly direct or indirect sales to the US Government.[7] Since the September 11, 2001 terrorist attacks, the US defense spending has risen over 35%.[3] Continued growth of the US defense budget will provide Triumph with the opportunity to win more contracts, and thereby increase its revenues.

High oil prices hurt the airline industry

Jet fuel is a key cost for airline operations. For airlines which offer less expensive tickets, such as Jet Blue and AirTran, fuel constitutes nearly 50% of their total costs.[8] Jet fuel is extremely correlated with spot petroleum prices, which have risen significantly over the past several years. This increased financial pressure on airlines also hurts Triumph since it manufactures parts for the industry.

The decrease in major airlines gives room to small aircraft

The cutback of flights and layoffs of major Airlines like Continental Airlines (CAL), Delta Air Lines Inc. (DAL), and JetBlue Airways (JBLU) has hurt large airline manufacturers such as Boeing Company (BA) and Airbus, while the demand for smaller aircraft has increased. Because small, light airplanes are more fuel efficient and easier to maintain, businesses and high level personnel have elevated their demand for such aircraft.[9]


Because most of Triumph's revenue comes from contracts with the US Government, Boeing, and Airbus, it has an interesting relationship with its competitors. It must compete with many of the companies for a given contract, but it also must work with or is asked to supply the same company. For example, Triumph supplies Spirit Aerosystems with the window mountings for the new 787.[6]

  • Spirit Aerosystems Holdings (SPR): makes fuselage sections, wing components, and structural parts for the airline industry that compete against Triumph. Spirit also competes for similar contracts from the US military, Boeing and Airbus.[10]
  • Heico (HEI): produces aircraft engines, components, and replacement parts that compete with Triumph. Unlike Triumph, Heico is heavily involved in electronic and telecommunication equipment for the aviation, space, and communication industries.[11]
  • Kreisler Manufacturing (KRSL): makes turbine engines and manifolds for military and commercial use which are in competition with Triumph. Kreisler is much smaller than Triumph and does not produce other aircraft components than engines.[12]
  • Goodrich Corporation (GR): competes with Triumph for aircraft parts such as landing gear, brakes, and wing components. Similar to Triumph, 43% of Goodrich's sales is from the US Government, Airbus, and Boeing.[13]


  1. TGI 10-K 2009 Item 1 Pg. 15
  2. 2.0 2.1 BNet - Business Services Industry "Triumph Group Selected to Provide Airbus A380F Floor Panel System" 12 Jan 2005
  3. 3.0 3.1 The Christian Science Monitor: "Record U.S. Defense Spending, But Future Budgets May Decline" 6 Feb 2008
  4. TGI 10-K 2008 "Sales, Marketing and Engineering" p.14
  5. TGI 10-K 2008 "Government Regulation and Inudstry Oversight" p.15
  6. 6.0 6.1 BNet - Business Services Industry "Triumph Group Selected to Provide Boeing 787 Floor Panel System" 11 Oct 2006
  7. TGI 10-K 2008 Item 1A "Risk Factors" p.19
  8. International Herald Tribune - Business with Reuters "High Oil Prices Hit Low-cost Carriers Especially Hard" 3 June 2008
  9. Seeking Alpha: "Airline Troubles Means More Demand for Private Jets" 6 June 2008
  10. Reuters - Full Description "Spirit Aerosystems Holdings Inc (New York Stock Exchange)"
  11. Google Finance "Heico Corporation"
  12. Google Finance "Kreisler Manufacturing"
  13. Reuters - Business & Finance "Goodrich Corp (New York Stock Exchange)"
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