Company Overview - AAR CORP.

Business Description

AAR CORP. is a leading independent provider of aerospace solutions serving the global aviation aftermarket, including both commercial and government clients. The company offers a broad range of products and services across four main segments:

• Parts Supply
• Repair & Engineering
• Integrated Solutions
• Expeditionary Services

Business Segments & Operations

1. Parts Supply

• Focus: Sales and leasing of used serviceable material (USM), distribution of OEM-supplied replacement parts.
• Major Activities:
  • Distributing OEM parts for narrow-body, wide-body, regional aircraft.
  • Active sourcing of USM (aircraft/engine parts from disassembled engines/airframes).
  • Exclusive distribution relationships with over 20 OEMs across more than 300 Federal Supply Class codes.
  • Developed digital solutions like the PAARTS Store for online order fulfillment.
• Key Relationships: Multiple distribution contracts with Unison, Chromalloy, Ontic; extended exclusive USM agreement on CFM56 engines through 2030.
• Sales (Fiscal 2025): Approximately $1.1 billion.

2. Repair & Engineering

• Focus: Airframe maintenance, component repair, and engineering services.
• Services Include:
  • Major airframe inspections, modifications, and overhaul.
  • Structural, avionics, paint, interior refurbishment.
  • Development of Parts Manufacturer Approval (PMA) parts and proprietary repairs.
• Facilities: 6 airframe and 6 component repair centers worldwide, including locations in the US (Indiana, Oklahoma, Florida, Illinois), Canada (Quebec, Ontario), Thailand, Netherlands.
• Significant Event: Sold Landing Gear Overhaul (LGO) business in fiscal 2025 for net proceeds of $48 million, recognized a loss of $71.1 million.
• Sales (Fiscal 2025): Approximately $885 million.

3. Integrated Solutions

• Focus: Fleet management, logistics programs, software solutions, and government aircraft operations.
• Key Activities:
  • Operating the U.S. Department of State fleet in support of the INL/A WASS contract.
  • Supply chain logistics and warranty management for commercial airlines.
  • Proprietary cloud-based MRO software system, Trax, acquired in 2023.
  • Software automates maintenance workflows and incorporates AI.
• Sales (Fiscal 2025): Approximately $695 million.

4. Expeditionary Services

• Focus: Support for military and humanitarian deployments.
• Activities:
  • Design, manufacture, repair of transportation pallets, containers, shelters.
  • Used in military and humanitarian missions, including supply and parts storage, logistics, command centers, and field facilities.
  • Provide engineering and system integration for command and control systems.
• Facilities: Owned facility in Cadillac, Michigan; offices in London, Paris, Rio de Janeiro, Tokyo, Shanghai, Singapore, Dubai.
• Sales (Fiscal 2025): Approximately $101 million.

Financial Highlights for Fiscal 2025

• Total Revenue: $2.78 billion (up 19.9% from prior year)
  • Commercial Customers: $1.98 billion (71.1% of sales, increased 20.6%)
  • Government & Defense Customers: $804 million (18.1% increase)
• Gross Profit: $527.7 million, margin of 19.0%
• Operating Income: $185.2 million (increase of 43.3% from previous year)
• Net Income: $12.5 million
• Employees: Approximately 5,600 worldwide (4,200 in the U.S. and 1,400 outside U.S.)
• Major Customers:
  • Domestic and foreign airlines
  • OEMs
  • Aircraft leasing companies
  • U.S. government agencies (e.g., DoD, DoS)
• Stock Data:
  • Trades on NYSE under symbol "AIR"
  • About 35.8 million shares outstanding as of June 30, 2025
  • No dividends declared since 2020

Summary

AAR CORP. operates globally, providing aircraft parts, maintenance, repair, overhaul, logistics, and aerospace systems primarily for commercial airlines, military, and government agencies, with a sizable workforce and over $2.7 billion in annual sales in fiscal 2025.