AAR and South African Airways Technical Announce MOU for Joint Venture
June 16, 2015
JV will establish AAR as strategic MRO and technology partner to support airline’s maintenance capabilities and to expand service across Africa
PARIS, June 16, 2015 – AAR (NYSE: AIR), a world leader in airframe maintenance and supply chain solutions, and South African Airways Technical (SAAT), the maintenance division for the leading airline in Africa, South African Airways (SAA), have signed a Memorandum of Understanding to establish a joint venture partnership to reduce costs and increase operational efficiencies of the airline’s fleet. The joint venture will also focus on growing SAAT's MRO services to third-party customers/airlines across the continent.
Under the agreement, AAR will provide operational analysis and technical assistance for MRO and warehouse facilities and integrate IT solutions including AAR’s 1MRO Software Suite. AAR has a global reputation in the aviation sector for improving operational efficiencies and turn times, as well as lowering costs through its customer-centric solutions.
"We chose AAR to support us as we strengthen and grow our world-class facility because of their experience and expertise in this area," said Musa Zwane, CEO of SAAT. "We are excited to develop a joint venture that will allow us to reduce maintenance costs, increase fleet readiness levels for our valued customers, and ultimately expand and serve West and Central Africa."
AAR also will support expansion of SAAT’s component repair capabilities, including landing gear, and potentially support a new MRO facility in West and Central Africa to meet growing regional travel in sub-Saharan Africa and increasing international travel to the continent.
The announcement was made Tuesday during a news conference at the 51st International Paris Air Show at Le Bourget by AAR CORP. Chairman and CEO David P. Storch and SAAT CEO Musa Zwane. They were joined by Marcus Jadotte, Assistant Secretary for the U.S. Commerce Department, which has helped AAR navigate the business, cultural and political landscape in Africa under the White House’s Doing Business in Africa initiative, for which Storch also serves on President’s Advisory Council.
“This joint venture is part of our efforts to further expand in developing markets like Africa,” said Storch. “We are excited to partner with Africa’s premiere MRO to help them streamline operations, reduce costs and expand service across the continent, including countries like Nigeria and Ghana.”
"Africa is home to 6 of the top 10 fastest-growing countries in the world, and U.S. exports to sub-Saharan Africa now top $21 billion a year. We help businesses like AAR tap into those markets," said Jadotte. "We couldn't be more pleased to have AAR and South African Airways Technical team up and go after opportunities in Africa."
In addition to being the largest independent MRO in the United States, AAR’s 1MRO Network also includes a component repair shop in Amsterdam and a landing gear overhaul facility in Malaysia. AAR was recently named Best Airframe MRO Provider Worldwide by ATE&M, the third honor in the past four years.
AAR’s global network of warehouses servicing customers’ supply chain needs are located in Chicago, Singapore, Amsterdam and Hannover, Germany, with a new hub in Brussels now serving Europe, the Middle East and Africa, including a power-by-the hour rotable support contract for Kenya Airways’ 737NG fleet. The Company serves customers in more than 100 countries from sales and service offices around the world including Airinmar, an inventory repair management company in the UK.
South African Airways (SAA) is the leading carrier in Africa, serving 56 destinations, in partnership with SA Express, SA Airlink and its low cost carrier, Mango, within South Africa and across the continent, and nine intercontinental routes from its Johannesburg hub. It is a member of the largest international airline network, Star Alliance. SAA’s core business is the provision of passenger airline and cargo transport services together with related services, which are provided through SAA and its wholly owned subsidiaries: SAA Technical; Mango its low cost carrier; and Air Chefs, the catering entity of SAA. SAA is the winner of the 'Best Airline in Africa’ award in the regional category for 12e consecutive years and the winner of ‘Service Excellence Africa’ for three years. Mango and SAA hold the No. 1 and No. 2 two successive spots as South Africa’s most on-time airlines.
Through the Doing Business in Africa (DBIA) Campaign, the U.S. government is strengthening its commercial relationship with the continent of Africa, a diverse region that offers substantial trade and investment opportunities across national and regional markets. With a 5.4 percent growth rate predicted for 2014, Africa is outpacing global growth. U.S. goods and services exports to Africa reached a record high of $50.2 billion in 2013, up 40 percent since 2009. These exports supported 250,000 U.S. jobs.
Media contact at Booth #3-A118: Kathleen Cantillon, Vice President of Strategic Communications, Kathleen.Cantillon@aarcorp.com | +1 630-227-2081 or email: email@example.com.
AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through two operating segments: Aviation Services and Expeditionary Services. AAR’s Aviation Services include Parts Supply; OEM Solutions; Integrated Solutions; and Maintenance, Repair and Overhaul (MRO) Services. AAR’s Expeditionary Services include Mobility Systems operations. Additional information can be found at www.aarcorp.com.
Media contact: Daniela Pietsch, Vice President Corporate Marketing & Communications, at firstname.lastname@example.org or +1 630-227-5100.
This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to,statements regarding the agreement to establish The Module Factory,AAR’s estimate that it will manage the teardown, repair, marketing and sales of spare parts of FTAI’s CFM56 engine pool totaling over 200 engines and growing, AAR’s ability to leverage its extensive USM capabilities to offer CFM56 serviceable engine material to the global commercial aviation aftermarket, that the partnership positions AAR well to service the growing demand for USM on a leading engine platform as customers increasingly prioritize more cost-efficient solutions, and the belief that serviceable engine products, combined with FTAI’s proprietary products and partnerships, completes its unique suite of CFM56 aftermarket offerings aimed at delivering the lowest cost per cycle solution to airline customers. Forward-looking statements may also be identified because they contain words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘continue,’’ ‘‘could,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘likely,’’ ‘‘may,’’ ‘‘might,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘predict,’’ ‘‘project,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘target,’’ ‘‘will,’’ ‘‘would,’’ or similar expressions and the negatives of those terms. These forward-looking statements are based on beliefs of Company management, as well as assumptions and estimates based on information currently available to the Company, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, including those factors discussed under Item 1A, entitled “Risk Factors”, included in the Company’s Form 10-K for the fiscal year ended May 31, 2014. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. For additional information, see the comments included in AAR’s filings with the Securities and Exchange Commission.