AAR Signs LOI with Mesa Airlines for Total Support of New E175s
12-year single-source supplier contract valued in excess of $200 million
AAR (NYSE: AIR) has signed a letter of intent (LOI) to provide support for 30 new Embraer 175 aircraft operated by Mesa Airlines, Inc. The 12-year agreement will include rotable inventory power by the hour (PBH) support, heavy maintenance, and wheel and brake services. AAR will utilize its broad service offerings to provide this comprehensive fleet support under a single program.
To support the inventory PBH element of the program, AAR will own and manage a rotable inventory pool in five of Mesa’s locations to meet guaranteed service levels. The heavy maintenance will be performed in AAR’s Oklahoma City MRO facility and the wheel and brake services will be performed in AAR’s Miami location.
The estimated total value of the contract is more than $200 million.
“We are excited to build on our history of quality and reliable service for Mesa Airlines,” said Ken Hein, Vice President of Operations for AAR’s Aviation Supply Chain Group. “Our total support solution simplifies the supply chain and life-cycle support for their new E175 fleet.”
Mesa will begin revenue operation of the new fleet of E175s this summer for United Express service.
“The total support services package offered by AAR as the primary supplier will allow us to focus on our core business – providing outstanding regional service for United Express and its customers,” said Gary Appling, Sr. Vice President of Maintenance and Engineering for Mesa Airlines. “We look forward to putting these new planes in operation this summer.”
AAR has been voted the No. 1 Airframe MRO provider in North America and one of the top three in the world, based on industry surveys. Its Wheels and Brakes division in Miami has earned the Top Shop Award from OneAero MRO for three consecutive years. As the largest independent provider of component support services in North America, AAR currently covers more than 600 aircraft in long-term support agreements.
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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