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About AAR International, Inc.

AAR provides a wide variety of aviation services and technology products primarily for the commercial aviation and defense industries. The company supplies customers and government agencies with aircraft components such as transportation pallets, containers, shelters, mobility systems, and control systems used in support of military deployments and humanitarian activities. AAR also provides supply chain management services, parts, and MRO (aircraft maintenance, repair, and overhaul) services. The company traces its historical roots to 1951 when Allen Eichner began selling aircraft radios and instruments.

Operations

AAR operates through two primary segments: Aviation Services and Expeditionary Services.

Aviation Services represents almost 95% of total revenues and provides aftermarket support for the commercial aviation and government and defense markets. Services include inventory management and parts distribution, aircraft MRO, and engineering. In this segment, the company sells and leases new, overhauled, and repaired engine and airframe parts to commercial and defense customers. In addition to its direct sales and services, AAR also acts as a distributor for 70 product lines across 25 aviation product manufacturers.

AAR's Expeditionary Services segment (more than 5%) consists of businesses that provide products and services that support the movement of equipment and personnel by US and foreign governments and by non-governmental organizations. This segment handles the maintenance for a fleet of fixed- and rotary-wing aircraft for the US Department of State (DoS).

Geographic Reach

Based in Wood Dale, IL, AAR operates in 20 countries and has customers in more than 100.

AAR’s Aviation Service segment operates out of facilities in five US states including Indiana, Oklahoma, Florida, Minnesota, and Illinois, and at two facilities in Canada. Its Expeditionary Services segment activities are conducted at facilities in Florida, Alabama, California, Michigan, and North Carolina.

The company also has sales and support offices in the UK, France, Brazil, China, Singapore, and United Arab Emirates (UAE).

Sales and Marketing

Principal customers for AAR’s Aviation Services segment are airlines, aviation operators, OEMs, aircraft leasing companies, the DoD, and foreign military organizations or governments. In the Expeditionary Services segment, principal customers include the DoS, DoD, foreign military organizations or governments, defense organizations, and OEMs.

The company primarily markets and sell products and services through its sales staff. In certain markets outside the US, it also uses foreign sales reps.

Financial Performance

AAR's revenues recovered in fiscal year 2018 after declining or stagnant sales since 2014. Consolidated sales grew 10% to $1.75 billion primarily due to a 9% revenue increase in the Aviation Services segment. The increase was driven by strong growth in the supply chain services business and recent contract awards. Expeditionary Services sales increased almost 23% as AAR began a new 10-year Worldwide Aviation Support Services (WASS) contract for the US Department of State (DoS).

Net income plunged to $15.6 million, a more than 70% decrease from 2017, due to impairment charges related to the sale of AAR’s Contractor-Owned, Contractor-Operated (COCO) business.

Cash at the end of fiscal 2018 was $41.6 million, an increase of $31.3 million from the prior year. Cash from operations contributed $58.8 million to the coffers, while investing activities used $38.6 million, which included $22.9 million for the acquisition of two MRO facilities in Canada. Financing activities added $11.7 million from the proceeds of a term loan used for the Canadian acquisition.

Strategy

After ditching its Telair Cargo Group more than three years ago, AAR has followed a strategic plan to focus on its two main businesses: aviation and expeditionary services. It is continually investing in activities to add new offerings to its portfolio.

AAR continues to expand its suite of services to the global commercial aviation and government and defense markets, specifically in component support and parts supply. Through recent acquisitions of parts and tooling for the ATR family of aircraft, the company is ramping up its ATR parts and repair services globally. AAR is working to offer more digital services with the launch of a mobile version of its online PAARTS Store and AARLive, a portal geared toward parts customers, which includes real-time order tracking.

Mergers and Acquisitions

AAR has made several acquisitions in the last few years. In late 2017, the company agreed to acquire two of Premier Aviation’s MRO facilities in Canada, adding a presence in the country to complement its MRO operations in the US.

Also in 2017, the company acquired Honolulu-based Island Air’s entire inventory and tooling for the ATR aircraft line. The acquisition deepens AAR’s commitment to providing global, customer-facing solutions to the ATR market. Earlier in 2017, AAR acquired ACLAS Global Limited for $12 million. Along with the acquisition, AAR signed a multi-year support and repair contract covering about 100 of ACLAS’ aircraft.

Company Background

Ira Allen Eichner began selling aircraft radios and instruments out of his car in 1951; in 1955 he incorporated his business as Allen Aircraft Radio. He opened a maintenance facility in Oklahoma City in 1959 and moved into aircraft overhaul. The firm entered Europe in 1965, became AAR in 1966, and went public the next year.

AAR International, Inc.

1100 N WOOD DALE RD
Wood Dale, IL 60191-1060
Phone: 1 (630) 227-2000

Stats

Employer Type: Privately Owned
Employees (This Location): 12
Employees (All Locations): 500

Major Office Locations

Wood Dale, IL

Other Locations

Zaventem (Brucargo), Belgium