About AAR

AAR Corp. and its subsidiaries operate as a diversified provider of products and services to the worldwide aviation and government and defense markets. The company is successful in winning new long-term agreements in both its commercial and government markets. The company is awarded a significant expansion of its exclusive agreement with Unison Industries, which broadens its distribution of select Unison ignitor plugs, ignition leads, harnesses, and related spare parts. The company also extended its distribution relationship with Leach International Corp to supply electromechanical and solid-state switch gears to the electronics end-market. In its commercial programs activities, the company was awarded a multi-year, flight-hour component support contract with flydubai for their growing Boeing 737 MAX fleet. During the fourth quarter of fiscal 2023 (year ended May 31, 2023), the company acquired Trax USA Corp. (Trax), a leading independent provider of aircraft MRO and fleet management software. Trax offers critical software applications to a diverse global customer base of airlines and MROs supporting approximately 5,000 aircraft. Trax’s comprehensive solutions support the entire spectrum of maintenance activities and create the system of record required by airlines and MROs. Segments Aviation Services The Aviation Services segment provides aftermarket support and services for the commercial aviation and government and defense markets and accounted for approximately 95% of the company’s sales in fiscal 2023. In this segment, the company also provides inventory management and distribution services, maintenance, repair, and overhaul (MRO) services, and engineering services. Business activities in this segment are primarily conducted through AAR Supply Chain, Inc.; AAR Government Services, Inc.; AAR Aircraft & Engine Sales & Leasing, Inc.; AAR Aircraft Services, Inc.; AAR Allen Services, Inc.; AAR Landing Gear LLC; AAR International, Inc.; Trax USA CORP.; and AAR Airlift Group, Inc. The company sells and leases a wide variety of new, overhauled and repaired engine and airframe parts and components and aircraft to its commercial aviation and government/defense customers. The company provides customized flight hour component inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components in support of its airline and government customers’ maintenance activities. The types of services provided under these programs include some or all of the following functions: material planning, sourcing, logistics, information and program management, and parts and component repair and overhaul. The company is also an authorized distributor for more than 30 product lines, which include parts from over 300 Federal Supply Class codes sourced from over 20 leading aviation original equipment manufacturers (OEMs). The company also has an interest in a joint venture supporting the distribution of OEM parts to customers in Asia. The company provides fleet management and operations of customer-owned aircraft for the U.S. Department of State (DoS) under the INL/A WASS contract. The company is the prime contractor on this ten-year performance-based contract which began in fiscal 2018. The company’s services under the contract include operating and maintaining the global DoS fleet of fixed- and rotary-wing aircraft. The company also provides customized performance-based supply chain logistics programs in support of the U.S. Department of Defense (DoD) and foreign governments. The types of services provided under these programs include some or all of the following functions: material planning, sourcing, logistics, information and program management, airframe maintenance and maintenance planning, and component repair and overhaul. The company provides major airframe inspection, maintenance, repair and overhaul, painting services, line maintenance, airframe modifications, structural repairs, avionics service and installation, exterior and interior refurbishment, and engineering services and support for many types of commercial and military aircraft. The company also repairs and overhauls various components, landing gears, wheels, and brakes for commercial and military aircraft. In addition to its North American facilities, the company has an interest in a joint venture which operates an airframe maintenance facility in India. The facility received certain regulatory approvals and commenced airframe maintenance operations in the second quarter of fiscal 2022. The majority of the company’s product sales are made pursuant to standard commercial purchase orders. Government sales are generally made under standard types of government contracts, which can include firm fixed-price contracts, cost plus fixed fee contracts, and time-and-materials contracts. For cost plus fixed fee contracts, the company typically receives reimbursement of its costs, to the extent the costs are allowable under contractual and regulatory provisions, in addition to receiving a fixed fee. Some of the company’s contracts call for the performance of specified services or the delivery of specified products under indefinite delivery/indefinite quantity (ID/IQ) arrangements. Certain inventory supply and management and performance-based logistics program agreements reflect negotiated terms and conditions. To support activities within the Aviation Services segment, the company acquires aviation parts and components from domestic and foreign airlines, independent aviation service companies, aircraft leasing companies, and OEMs. The company has ongoing arrangements with OEMs that provide it access to parts, repair manuals, and service bulletins in support of parts manufactured by them. Although the terms of each arrangement vary, they typically are made on standard OEM terms as to duration, price, and delivery. From time to time, the company purchases airframes and engines for resale or disassembly into individual parts and components. Airframes and engines may also be leased to airlines by the company or through joint ventures on a short-term basis prior to disassembly or sale. Expeditionary Services The Expeditionary Services segment primarily consists of products and services supporting the movement of equipment and personnel by the U.S. and foreign governments and non-governmental organizations. The Expeditionary Services segment accounted for approximately 5% of the company’s sales in fiscal 2023 (year ended May 31, 2023). Business activities in this segment are primarily conducted through AAR Manufacturing, Inc. and Brown International Corporation. The company designs, manufactures, and repairs transportation pallets and a wide variety of containers and shelters used in support of military and humanitarian tactical deployment activities. The containers and shelters are used in numerous mission requirements, including armories, supply and parts storage, refrigeration systems, tactical operation centers, briefing rooms, laundry and kitchen facilities, water treatment, and sleeping quarters. Shelters include both stationary and vehicle-mounted applications. The company also provides engineering, design, and system integration services for specialized command and control systems. Sales in this segment are generally made to customers pursuant to standard commercial purchase orders and contracts. Some of the company’s contracts call for the performance of specified services or the delivery of specified products under ID/IQ arrangements, however, the majority of its products and services are procured via definite contracts. Customers The principal customers for the company’s products and services in the Aviation Services segment are domestic and foreign passenger airlines, domestic and foreign cargo airlines, regional and commuter airlines, business and general aviation operators, OEMs, aircraft leasing companies, aftermarket aviation support companies, the DoD and its contractors, the DoS, and foreign military organizations or governments. In the Expeditionary Services segment, its principal customers include the DoD and its contractors, foreign military organizations or governments, defense organizations, and OEMs. Sales of aviation products and services to the company’s commercial airline customers are generally affected by such factors as the number, type and average age of aircraft in service, the levels of aircraft utilization (e.g., frequency of schedules, flying hours, and take-off and landing cycles), the number of airline operators, the general economy, and the level of sales of new and used aircraft. Sales to the DoD and other government agencies are subject to a number of factors, including the level of troop deployment worldwide, government funding, competitive bidding, and requirements generated by worldwide geopolitical events. The company primarily markets and sells products and services through its own employees. In certain markets outside of the United States, it relies on foreign sales representatives to assist in the sale of its products and services. Sales to Government and Defense Customers Sales to global government and defense customers (including sales to branches, agencies, and departments of the U.S. government) were 33.2% of consolidated sales in the year ended May 31, 2023. Sales to branches, agencies, and departments of the U.S. government and their contractors were 29.0% of consolidated sales in the year ended May 31, 2023. The majority of the company’s U.S. government sales are for products and services supporting DoS flight operations and DoD logistics and mobility strategy. Government Regulation and Certificates The company has nine FAA (Federal Aviation Administration) certificated repair stations in the United States, Canada, and Europe. Of the nine certificated FAA repair stations, seven are also European Aviation Safety Agency (EASA) and three are also Transport Canada Civil Aviation (TCCA) certificated repair stations. The company also has a 40% ownership interest in a joint venture in Nagpur, India, which operates an airframe maintenance facility as a Directorate General of Civil Aviation (DGCA) certificated repair station for heavy maintenance on Airbus A320 aircraft. History AAR Corp. was incorporated in 1951.