AAR (AIR) Jefferies Global Industrials Conference 2026 summary

Business Overview and Strategic Focus

• Company operates in parts, repair, and software, with a balanced mix of government (30%) and commercial (70%) business.

• Portfolio reshaped since 2018 through divestitures, facility closures, and six acquisitions in three years, transitioning from a legacy operator to a high-quality aviation aftermarket platform.

• Focused on leadership in aviation services, driving reliable growth, cash flow consistency, and margin expansion, supported by execution excellence and strategic acquisitions.

• Main revenue drivers are new parts distribution, heavy maintenance, and software solutions, with exclusive agreements with 35 OEMs and high renewal rates.

• Customer base includes major global airlines, OEMs, government entities, and logistics providers, diversified across geographies and market segments.

Parts and Distribution Segment

• New parts distribution is the largest and fastest-growing segment, with 20%-30% organic growth over five years and exclusive, long-term OEM agreements.

• Used serviceable material business is shrinking as a percentage but remains important for market connectivity.

• Above-market growth in new parts expected to continue, supported by a strong pipeline and recent expansion into LEAP-related applications through new OEM partnerships like Woodward.

• Component and airframe MRO services support both commercial and government customers, with industry-leading turnaround times.

• Maintains high renewal rates and technical proficiency through exclusive OEM agreements.

Repair and Maintenance Operations

• Heavy maintenance is the third largest globally and largest in North America, focused on narrow-body aircraft.

• 15% increase in hangar capacity coming online over 6-12 months, supporting further growth.

• Component repair business has significant runway, with current capacity able to double through additional shifts.

• Strategy to cross-sell component repair to heavy maintenance customers is in early stages but showing positive results.

• Exiting high-cost facilities and restructuring recent acquisitions like HAECO to improve margins.