AAR CORP

AAR CORP.

Company overview

AAR CORP. and its subsidiaries operate as a global, independent provider of aviation aftermarket solutions. The company serves commercial and government customers across more than 20 countries. As of the fourth quarter of fiscal 2026, operations are organized into four segments:

• Parts Supply
• Repair, Engineering, and Software
• Government Solutions
• Legacy Commercial Programs (wind-down planned; asset-heavy, flight-hour-based programs)

Segment snapshot

Parts Supply

• Primary business: aftermarket distribution of new OEM parts and sales/leasing of used serviceable material (USM).
• Share of 2026 sales: about 45%.
• Key relationships: formal distribution agreements with OEMs; expanded capacity through the ADI acquisition; online PAARTS Store for electronic order fulfillment.
• Customers and markets: global operators, airlines, government customers, and other MRO providers; supports narrow-body, wide-body, and regional aircraft.

Repair, Engineering, and Software

• Core activities: airframe MRO, component MRO, and software platforms.
• Platforms and capabilities: Trax (cloud-based maintenance system), Aerostrat (long-range heavy maintenance planning), Airvoyant (AI-powered procurement workflow), Airinmar (warranty claims management); development of PMA parts and DER repairs.
• Facilities: eight U.S. airframe MRO sites (Indianapolis, Oklahoma City, Miami, Rockford, Greensboro, Lake City) and Canadian facilities (Trois-Rivières, Windsor); five component repair facilities (Hot Springs, Grand Prairie, Wellington, Chonburi, Amsterdam).
• Segment contribution: about 35% of 2026 sales.
• Growth initiatives: acquisitions (ADI, HAECO Americas, ART) and facility expansions (80,000 sq ft Oklahoma City addition; 114,000 sq ft Miami expansion); continued investment in software offerings.

Government Solutions

• Core activities: fleet management and operation of customer-owned aircraft; performance-based supply chain logistics for the Department of the Army and Department of State and foreign governments; Mobility Systems (pallets, containers, shelters; engineering and system integration).
• Share of 2026 sales: about 15%.
• Major contract: INL/A WASS for the Department of State — a ten-year performance-based contract. The INL/A WASS contract with DoS is up for renewal in June 2028. DoS-related sales in 2026 were $92.0 million, and the HAECO Americas acquisition contributed $131.1 million to government-related activity.
• Customers: DoS, DoD/DoW, foreign governments and related agencies.

Legacy Commercial Programs

• Core activities: asset-heavy, flight-hour-based component pool and repair programs for commercial airlines; distribution of consumables and expendables.
• Share of 2026 sales: about 5%.
• Wind-down plan: expected to take roughly three to four years as contracts terminate and rotable assets are sold.

Scale and reach

• Global footprint: operations in more than 20 countries; international sales accounted for about 34.3% of consolidated fiscal 2026 sales.
• Workforce: approximately 7,100 employees worldwide as of May 31, 2026 (about 5,400 in the U.S., 1,700 outside the U.S., plus ~700 contract workers).
• Suppliers and manufacturing: limited in-house manufacturing; reliance on third-party suppliers and subcontractors for parts and services; exposure to supply chain disruptions and inflationary cost pressures, with cost pass-throughs used where contracts permit.
• Intellectual property and software: owns and licenses Trax, Aerostrat, Airvoyant, and Airinmar; develops PMA and DER capabilities; uses OEM manuals and licensed tools that include restrictions; certain government contracts may involve government-funded IP rights.
• Acquisition activity (fiscal 2026):
  • ADI (Sept 2025) for $137.1 million
  • HAECO Americas (Nov 2025) for $78.0 million
  • ART (April 2026) for $36.0 million
  • Aerostrat (Aug 2025) for $19.0 million
• Expansions and capital projects:
  • Oklahoma City airframe MRO expansion: 80,000 sq ft added; first aircraft inducted in early 2026.
  • Miami airframe MRO expansion: 114,000 sq ft; additional lines to be serviced; expected operational by end of 2026.

Financial highlights (fiscal 2026)

• Revenue mix by segment:
  • Parts Supply: ~45%
  • Repair, Engineering, and Software: ~35%
  • Government Solutions: ~15%
  • Legacy Commercial Programs: ~5%
• Consolidated sales increased by $527.5 million, or 19.0%, over the prior year.
• Government-related sales:
  • Total government and defense customer sales: $923.9 million (27.9% of consolidated sales).
  • U.S. government sales: $787.8 million (23.8% of consolidated sales).
  • DoS INL/A WASS contract: $92.0 million in 2026 sales; renewal anticipated in June 2028.
• Backlog:
  • Firm backlog as of May 31, 2026: $777 million.
  • Expected revenue recognition from backlog: ~70% in fiscal 2027, ~20% in fiscal 2028, remainder thereafter.
• International presence: operations and customers across Canada, Europe, Asia, the Middle East, and Latin America; foreign customer sales represent about one-third of total revenue.
• Customers: domestic and foreign passenger and cargo airlines, regional and general aviation operators, OEMs, aircraft lessors, DoW, DoS, and foreign governments.
• Employment and labor: workforce of roughly 7,100 with a mix of direct and contract labor; approximately 2% covered by a union.

Key takeaways

• AAR is a diversified aviation aftermarket provider organized into four operating segments, with a planned wind-down of Legacy Commercial Programs over several years.
• Fiscal 2026 growth was driven by expanded Parts Supply activity and acquisitions that strengthened Repair, Engineering, and Software capabilities, along with an expanding software portfolio (Trax, Aerostrat, Airvoyant, Airinmar).
• Government Solutions represents a meaningful portion of revenue, with DoS and DoW programs and mobility logistics as core activities; the INL/A WASS program with the Department of State is a long-term contract.
• The company reported a firm backlog of $777 million and expects most of it to convert to revenue over the next two years.
• The revenue mix is concentrated in parts distribution and MRO/software services, with substantial international exposure (about one-third of revenue from foreign customers).