AAR Signs Five-Year Commercial Supply Chain Contract
Leading parts supplier to procure, manage and source materials for major airline fleet
WOOD DALE, Illinois — AAR (NYSE: AIR) has signed a five-year contract to become the sole supplier of approximately 25,000 consumable and expendable line-item parts for a major commercial airline customer. The contract is valued at approximately $42 million in annual revenue.
AAR will act as an aggregator, procuring and managing the parts and providing them to the customer’s main warehouse facility as required. In doing so, AAR will take the place of more than 150 suppliers. AAR will provide additional value through guaranteed fill rates that will be achieved by streamlining supply chain processes that include material planning, inventory control and receiving inspections.
“By aggregating the spending on materials with other programs managed by AAR, we can provide better pricing and improved service reliability,” said John M. Holmes, AAR’s Group Vice President — Aviation Supply Chain. “We look forward to delivering a cost-effective and sustainable solution and to serving as a single point of contact for an extensive selection of consumable and expendable parts.”
AAR will leverage supply-chain processes and expertise developed supporting commercial and defense customers and its own MRO operations. AAR will also continue to develop its integrated IT systems to provide the customer with access to a seamless support network. AAR currently supports the customer with a wide range of services including landing gear overhauls, aircraft maintenance and modifications, component repair services, engineering services, and ULD and engine parts supply.
AAR is a global aftermarket solutions company that employs more than 6,000 people in over 20 countries. Based in Wood Dale, Illinois, AAR supports commercial aviation and government customers through two operating segments: Aviation Services and Expeditionary Services. AAR’s Aviation Services include inventory management; parts supply; OEM parts distribution; aircraft maintenance, repair and overhaul; engineering services and component repair. AAR’s Expeditionary Services include airlift operations; mobility systems; and command and control centers in support of military and humanitarian missions. More information can be found at www.aarcorp.com.
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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. 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, 2018. 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.
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