Aar's Business Segments

AAR was founded in 1951, organized in 1955 and reincorporated in Delaware in 1966. We are a diversified provider of products and services to the worldwide aviation and government and defense markets.

Aviation Services, comprised of supply chain and MRO activities and Expeditionary Services, comprised of airlift and mobility activities. This new presentation reflects the way our chief operating decision making officer (Chief Executive Officer) now evaluates performance and our internal organizational and management structure.

The Aviation Services segment provides aftermarket support and services for the commercial aviation and government and defense markets and accounted for 83%, of our sales. In this segment, we also provide inventory management and distribution services, MRO, and engineering services. Business activities in this segment are primarily conducted through AAR Parts Trading, Inc.; AAR Aircraft & Engine Sales & Leasing, Inc.; AAR Aircraft Services, Inc.; AAR Allen Services, Inc. (a wholly-owned subsidiary of AAR Parts Trading, Inc.); AAR Landing Gear LLC; and AAR International, Inc.

The Expeditionary Services segment consists of businesses that provide products and services supporting the movement of equipment and personnel by the DoD, foreign governments and non-governmental organizations. The Expeditionary Services segment accounted for 17%, of our sales. Business activities in this segment are primarily conducted through AAR Airlift Group, Inc.; AAR Manufacturing, Inc. and Brown International Corporation (a wholly-owned subsidiary of AAR Manufacturing, Inc.).

AAR Corp, a diversified provider of services and products to the global aerospace and defense industries, operates through several key segments, including Aviation Services and Expeditionary Services. This extensive overview will delve into each segment, outlining the variety of products and services offered, as well as the companys international operations.

Aviation Services

The Aviation Services segment is a cornerstone of AAR Corps operations, underscoring its commitment to supporting both commercial aviation and government/defense clients. This segment encompasses a wide array of activities focused on inventory management, maintenance, repair, and overhaul (MRO), as well as engineering services. AAR Corps business activities in this space are conducted primarily through several subsidiaries:

1. AAR Parts Trading, Inc.
2. AAR Aircraft & Engine Sales & Leasing, Inc.
3. AAR Aircraft Services, Inc.
4. AAR Allen Services, Inc. (a wholly-owned subsidiary of AAR Parts Trading, Inc.)
5. AAR Landing Gear LLC
6. AAR International, Inc.

Key Offerings in Aviation Services

1. Parts Sales and Leasing: AAR Corp engages in the sale and lease of new, overhauled, and repaired engine and airframe components. Their offerings cater to a diverse clientele, including commercial airlines and government entities, ensuring they have access to critical aviation parts.

2. Customized Inventory Management: The firm provides tailored inventory supply and management services designed to optimize the operational efficiencies of airlines and government maintenance operations. This includes:
- Material planning
- Sourcing and logistics
- Warranty claim management
- Outsourcing programs for parts and components

3. Performance-Based Logistics: AARs performance-based logistics programs are particularly tailored for the U.S. Department of Defense (DoD) and foreign government contracts. This involves:
- Comprehensive material planning and sourcing
- Logistics and program management
- Airframe maintenance and associated planning services
- Component repair and overhaul solutions

4. Airframe Maintenance and Overhaul: AAR operates several facilities committed to major airframe maintenance and inspection, including:
- Painting services
- Line maintenance
- Modifications and structural repairs
- Avionic service and installation
- Interior and exterior refurbishment

5. Landing Gear Overhaul: AAR has a specialized facility for the repair and overhaul of landing gears, wheels, and brakes, pivotal for maintaining aircraft safety and performance, located in Miami, Florida.

Global Operations in Aviation Services

AAR operates six airframe maintenance facilities and one dedicated landing gear overhaul facility across the United States. These locations include Indianapolis (Indiana), Oklahoma City (Oklahoma), Duluth (Minnesota), Miami (Florida), and Lake Charles (Louisiana). This geographic footprint allows AAR to serve a wide range of clients quickly and effectively, assuring support across various aviation maintenance needs.

Expeditionary Services

The Expeditionary Services segment encompasses businesses that provide critical support for the movement of equipment and personnel, emphasizing operations for the DoD, foreign governments, and non-governmental organizations (NGOs). Key entities involved in this segment include:

1. AAR Airlift Group, Inc.
2. AAR Manufacturing, Inc.
3. Brown International Corporation (a wholly-owned subsidiary of AAR Manufacturing, Inc.)

Key Offerings in Expeditionary Services

1. Expeditionary Airlift Services: AAR provides sophisticated airlift solutions, encompassing both fixed- and rotary-wing flight operations. Services are tailored to transport personnel and cargo, primarily supporting military operations in regions such as Afghanistan, Iraq, Northern Africa, and the Western Pacific. AAR holds necessary certification to operate these aircraft, including FAR Part 133 and 135 certificates.

2. Engineering, Design, and System Integration: The company plays a pivotal role in the design and manufacturing of essential logistical equipment, including transportation pallets, containers, and shelters, which are critical for both military and humanitarian missions. These structures serve various operational needs, such as temporary housing, command and control centers, and logistical support for deployed units.

3. Repair and Maintenance Services: Expansion into the repair and maintenance of specialized equipment like transportation pallets and tactical containers enhances their offering to military and humanitarian operations significantly.

International Operations

AAR Corps international operations are integral to its business model, particularly within the Aviation Services and Expeditionary Services segments. The company actively engages in various regions around the globe, providing essential support for military and civilian aviation needs. By leveraging its certification to operate in complex environments and maintain aircraft, AAR demonstrates its capability to adapt to different regulatory and operational landscapes. Additionally, AAR has established partnerships and certifications that facilitate cooperation with government entities, ensuring compliance and trust within their operational frameworks.

Conclusion

AAR Corp’s extensive range of segments, products, and services underscores its significant role in the aerospace and defense industries. By providing comprehensive solutions in the Aviation Services and Expeditionary Services segments, the company has developed a robust operational framework that supports both commercial and defense aviation needs internationally. This strategic positioning and the versatility of its service offerings ensure that AAR remains a formidable player in the global aerospace sector.