AAR Corp. (AIR): History, Ownership, Mission, How It Works & Makes Money

When you look at the aerospace aftermarket, are you defintely tracking the real growth drivers like AAR Corp. (AIR), the largest independent North American Maintenance, Repair, and Overhaul (MRO) provider? This isn't just a parts supplier; the company delivered a record fiscal year 2025, with consolidated sales hitting $2.8 billion, an increase of 20%, and Adjusted EBITDA soaring 34% to $324 million, reflecting a massive step up in operational efficiency. Their strategic focus on high-growth parts distribution-which saw an organic increase of over 20%-and the recent divestiture of non-core assets for $48 million shows a clear, high-margin path forward. If you want to understand how a diversified aviation services company is translating global fleet aging and resilient defense spending into tangible returns, you need to know how AAR Corp. works and makes its money.

AAR Corp. (AIR) History

You need a clear line of sight on where a company like AAR Corp. came from to understand its current strategic moves, especially the big 2025 acquisitions. The company didn't start as a global aerospace giant; it began as a small, opportunistic venture in the post-war aviation boom.

The core story is one of continuous, smart adaptation-moving from selling surplus parts to becoming a major, independent Maintenance, Repair, and Overhaul (MRO) provider. This evolution is why AAR Corp. is now a $2.7 billion provider of differentiated aftermarket services as of early 2025.

Given Company's Founding Timeline

Year established

The venture started in 1951 when founder Ira A. Eichner began trading military surplus radios, but the company was formally incorporated in 1955 as Allen Aircraft Radio Inc.

Original location

The initial operation was in the Chicagoland area, moving to downtown Chicago, Illinois, upon its incorporation in 1955. The company later established its first FAA repair station in Elk Grove Village, Illinois, in 1962.

Founding team members

The company was founded by Ira A. Eichner, who saw a clear opportunity in the emerging commercial aviation market. He served as the CEO from 1955 and later as Chairman until his retirement in 2005.

Initial capital/funding

Eichner started the venture in 1951 with a few hundred dollars borrowed from his fiancée. The first major external funding came in 1961 when the company secured initial equity capital through William Blair & Company. A significant early financial maneuver was the 1967 initial public offering (IPO), which raised $1 million at an over-the-counter share price of $10.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The company's trajectory was shaped by three major, defintely non-cliched, strategic shifts that moved it up the value chain. Here's the quick math on what mattered.

The first major pivot was the move from a parts distributor to a service provider. This started in 1962 with the establishment of an FAA repair station in Elk Grove Village, Illinois, and continued with the 1971 acquisition of its first airframe Maintenance, Repair, and Overhaul (MRO) business in Oklahoma City. This decision fundamentally changed the business model, moving revenue from transactional sales to recurring service contracts.

Second, the decision in the early 1980s to focus heavily on the engine business, which became the Aircraft Turbine Center (ATC), was pivotal. This specialized unit provided a high-margin service line and was a key driver of growth under then-future CEO David Storch. The subsequent expansion into high-technology military aircraft component repair by 1985 further diversified and stabilized the revenue base.

The third, and most recent, transformative moment is the aggressive, strategic focus on core aviation services and digital integration leading up to 2025. This involves both divestitures and massive acquisitions:

• Streamlined the business by divesting non-core assets, such as the Landing Gear Overhaul business for $51 million in late 2024.
• Doubled down on digital with the $120 million acquisition of Trax in 2023, giving AAR Corp. a leading software platform for aircraft maintenance.
• Executed its largest acquisition to date in April 2025, spending $725 million on Triumph Group's Product Support business to become a powerhouse in component services.

These actions show a clear, capital-intensive strategy to dominate the independent aerospace aftermarket. To fully appreciate the current strategy, you should review the company's stated goals: Mission Statement, Vision, & Core Values of AAR Corp. (AIR).

AAR Corp. (AIR) Ownership Structure

AAR Corp. is a publicly traded company on the New York Stock Exchange (NYSE: AIR), meaning its ownership is distributed among a diverse group of institutional, insider, and retail investors. This structure ensures a high degree of transparency and subjects the company's strategic direction to the scrutiny of the public market and its major shareholders.

AAR Corp.'s Current Status

The company is a publicly held entity, trading under the ticker symbol AIR on the NYSE. It operates as a leading provider of aviation aftermarket services, and its public status allows it to raise capital through equity offerings, such as the one in September 2025 which priced 3 million shares at $83 per share. This capital structure supports its growth strategy, including acquisitions like the November 2025 purchase of HAECO Americas for $78 million in an all-cash transaction. AAR Corp. is headquartered in Wood Dale, Illinois, and its governance is overseen by a Board of Directors elected by its shareholders.

AAR Corp.'s Ownership Breakdown

Institutional investors hold the vast majority of AAR Corp. shares, which is defintely typical for a company with a market capitalization of around $3.32 billion as of October 2025. This concentration means that large asset managers and mutual funds exert significant influence on corporate governance matters, but still, the retail float provides liquidity.

AAR Corp.'s Leadership

The company's strategy is steered by an experienced leadership team, with an average management tenure around 4.9 years. The key decision-maker is John M. Holmes, who serves as the Chairman, President, and CEO. He directly owned 260,141 shares following a November 2025 sale, which is a concrete example of insider holdings. The executive team is responsible for driving the company toward its financial targets, including the reported fiscal year 2025 Adjusted Sales of $2.7 billion and Adjusted EBITDA of $324 million. If you are interested in the long-term strategic direction, you should look at the Mission Statement, Vision, & Core Values of AAR Corp. (AIR).

The core corporate officers as of November 2025 include:

• John M. Holmes: Chairman, President, and CEO.
• Sean M. Gillen: Senior Vice President and Chief Financial Officer.
• Jessica A. Garascia: Senior Vice President, General Counsel, Chief Administrative Officer, and Secretary.
• Rahul S. Ghai: Senior Vice President and Chief Digital and Technology Officer.
• Christopher A. Jessup: Senior Vice President and Chief Commercial Officer.

Here's the quick math: with over 90% institutional ownership, their long-term view is what matters most for stock stability. So, tracking the movements of top holders like BlackRock is crucial to understanding the stock's near-term support.

AAR Corp. (AIR) Mission and Values

AAR Corp. grounds its market strategy in a clear purpose: ensuring global connectivity and defense readiness through innovative aerospace solutions. This focus drives a culture centered on its core value, Doing It Right®, which underpinned a record-breaking fiscal year 2025, where consolidated sales hit $2.8 billion.

You're looking past the financials, and honestly, that's smart. A company's cultural DNA-its mission and values-dictates long-term stability and how it handles market shocks. For AAR, this DNA is about safety, speed, and continuous evolution in the complex aerospace aftermarket.

AAR Corp.'s Core Purpose

The core purpose is the company's reason for being, mapping its day-to-day work to a profound, real-world outcome for its customers. It's a simple, powerful statement that connects every employee to the end-user, which, in the aerospace world, is a matter of life and death.

• Our Core Purpose: Empowering people to build innovative aerospace solutions today so you can safely reach your destination tomorrow.

Official mission statement

The mission statement defines the scope of their work-aerospace aftermarket solutions (maintenance, repair, and overhaul, or MRO, and parts supply)-and their commitment to service. They don't just meet needs; they go above and beyond, which is a key differentiator in a high-stakes industry.

• Go above and beyond to provide value-driven aerospace aftermarket solutions to meet the evolving needs of our customers worldwide.

Vision statement

AAR's vision is focused on creating a sustainable, long-term competitive edge, not just chasing short-term gains. This means constantly developing differentiated capabilities-unique services and proprietary offerings-to stand out. This strategic clarity helped them achieve an adjusted operating margin of 9.6% in fiscal year 2025, up from 8.3% the prior year.

• Create value for customers through differentiated capabilities and offerings, resulting in a sustainable, unique competitive advantage.

For a deeper dive into the numbers driving this vision, you should read Breaking Down AAR Corp. (AIR) Financial Health: Key Insights for Investors.

AAR Corp. slogan/tagline

The company's slogan is more than a catchy phrase; it's a commitment to ethical conduct and quality in all operations, from parts distribution to complex MRO services. It's their internal shorthand for compliance and integrity.

• Doing It Right®

This commitment is backed by a set of eight core values that guide everything they do, from the hangar floor to the executive suite. They defintely value both performance and ethics.

• Quality and safety: Quality first. Safety always.
• Find a way: Find a way. Every day.
• Do it fast and well: Do it fast. Do it well.
• Be honest: Be honest. Inspire trust.
• Work as one: Work as one. Be inclusive.
• Ideas matter: Ideas matter. Think new. Think ahead.
• Make money, have fun: Make money. Have fun.
• Own it: Own it.

AAR Corp. (AIR) How It Works

AAR Corp. is a critical aftermarket solutions provider for the global aerospace and defense industry, essentially keeping commercial and military aircraft flying by managing the complex supply chain of parts, maintenance, and engineering services. The company generates the majority of its revenue-$2.8 billion in fiscal year 2025-by acting as an essential, independent partner to airlines, original equipment manufacturers (OEMs), and governments worldwide.

AAR Corp.'s Product/Service Portfolio

AAR Corp. operates across four main segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services. The value proposition is a comprehensive, single-source solution for the entire aircraft lifecycle, from component distribution to heavy maintenance and digital fleet management.

AAR Corp.'s Operational Framework

The operational framework is built on a global network of facilities and a deep inventory, enabling AAR Corp. to deliver high-velocity support. This model is highly responsive to the aviation industry's non-negotiable need for minimal aircraft downtime, so the value chain focuses on speed and efficiency.

In fiscal year 2025, the company's full-year consolidated sales hit $2.8 billion, with 71% coming from commercial customers, showing a clear reliance on the recovering global airline market. The core process involves:

• Acquiring and Distributing Assets: Sourcing aircraft components, either new from OEMs or as Used Serviceable Material (USM), and managing over 1.5 million parts in a global inventory network.
• Executing Maintenance, Repair, and Overhaul (MRO): Operating a network of airframe and component repair facilities. The November 2025 acquisition of HAECO Americas for $78 million immediately expanded this North American MRO footprint.
• Integrating Digital Tools: Using proprietary software like Trax, a leading enterprise resource planning (ERP) system for MROs, to manage maintenance schedules, inventory, and compliance. This is defintely a key differentiator.
• Delivering Performance-Based Logistics (PBL): For government contracts, AAR Corp. manages the entire supply chain for a fixed fee, ensuring parts are available when and where they are needed, which shifts the inventory risk.

Here's the quick math: The strong demand for new parts distribution and the Product Support acquisition drove a 20% increase in sales for the year.

AAR Corp.'s Strategic Advantages

AAR Corp.'s market success hinges on its scale, independence, and digital integration, allowing it to capture growth from both an aging global fleet and constrained new aircraft deliveries. For a deeper look at the financials, you should check out Breaking Down AAR Corp. (AIR) Financial Health: Key Insights for Investors.

• Independent Scale: AAR Corp. is the largest independent MRO provider in North America, meaning it is not tied to a single OEM or airline group. This independence makes it a preferred partner for diverse fleets globally.
• Digital Leadership: The August 2025 acquisition of Aerostrat, a maintenance planning software company, bolsters its digital offering, giving airlines a powerful tool (AERROS) to minimize aircraft out-of-service time. This is how you drive efficiency.
• Margin Expansion: Improved operating efficiency and favorable mix, particularly in Parts Supply, resulted in an Adjusted Operating Margin increase to 9.6% in fiscal year 2025, up from 8.3% in the prior year.
• Dual-Market Resilience: The company serves both the high-volume commercial sector (71% of sales) and the stable, long-term government/defense sector, providing a hedge against cyclical downturns in either market.

AAR Corp. (AIR) How It Makes Money

AAR Corp. makes money by providing a full lifecycle of services and products to the global aviation aftermarket, essentially keeping commercial and government aircraft flying safely and efficiently. The core of their revenue comes from supplying new and used aircraft parts and performing complex maintenance, repair, and overhaul (MRO) services.

You can think of AAR Corp. as the essential service partner for airlines and defense forces-they sell the parts, fix the planes, and manage the logistics, which is a highly sticky business model that benefits from an aging global fleet. To see how they approach their long-term strategy, you can read their Mission Statement, Vision, & Core Values of AAR Corp. (AIR).

AAR Corp.'s Revenue Breakdown

For the fiscal year 2025, which ended May 31, 2025, AAR Corp. reported total consolidated sales of approximately $2.78 billion, marking a strong 20% increase over the prior year. This growth was largely driven by the acquisition of the Product Support business and high demand in new parts distribution. Here is the breakdown of that revenue by business segment:

The Parts Supply segment is the biggest contributor, but the Repair & Engineering segment saw the most significant growth in the year, up 38%, thanks to the recent acquisition and strong market demand.

Business Economics

The company operates on two key economic fundamentals: high-value parts distribution and essential, high-barrier-to-entry services like MRO. The Parts Supply business often involves exclusive original equipment manufacturer (OEM) distribution agreements, which gives them a competitive moat and better pricing power for new parts.

Their pricing strategy is defintely nuanced. They use differentiated pricing for their two main customer bases: commercial airlines and government/defense agencies. Military contracts typically command higher, specialized rates due to complexity and stringent requirements.

• Commercial Revenue Mix: 71% of consolidated sales in FY2025 came from commercial customers, consistent with the prior year.
• Margin Profile: Gross margin for the company was 19% in FY2025.
• MRO Tailwinds: The global commercial aircraft fleet is aging, with new aircraft delivery constraints pushing airlines to keep older planes flying longer. This creates a massive, long-term tailwind for their MRO (Maintenance, Repair, and Overhaul) services.
• Value-Based Pricing: For complex MRO and Integrated Solutions, AAR Corp. employs value-based pricing, where the cost reflects the value delivered, such as guaranteed operational efficiency improvements or reduced aircraft downtime.

The divestiture of their Landing Gear Overhaul business in FY2025 was a clear strategic move to optimize the portfolio and focus on higher-margin activities. That's smart portfolio management.

AAR Corp.'s Financial Performance

AAR Corp.'s financial health in fiscal year 2025 shows a company growing its top line aggressively while managing a complex profitability picture due to one-time events. Total sales hit a record $2.78 billion.

Here's the quick math on profitability and balance sheet strength:

• Adjusted EBITDA: This key metric, which strips out non-cash and non-recurring items, was $324 million for FY2025, a substantial 34% increase year-over-year.
• Adjusted EBITDA Margin: The margin expanded to 11.8%, up from 10.4% in the prior year, showing better operating efficiency.
• Adjusted Diluted EPS: Earnings per share, adjusted for one-time charges, was $3.91, reflecting a 17% increase.
• GAAP Net Income: The reported net income was only $12.5 million, but this figure included significant after-tax charges of $115 million related to the sale of their Landing Gear Overhaul business and a legal settlement. This is why you must look at adjusted numbers.
• Net Leverage: The company's net debt leverage ratio was reduced to 2.72x by the end of FY2025, down from 3.58x following the Product Support acquisition, indicating a strengthening balance sheet.
• Operating Cash Flow: Cash flow provided by operating activities for the full year was $36.1 million.

AAR Corp. (AIR) Market Position & Future Outlook

AAR Corp. is firmly positioned as the largest independent provider of aviation aftermarket services in North America, leveraging a diversified portfolio to capitalize on the global MRO (Maintenance, Repair, and Overhaul) market's strong tailwinds. The company delivered a record fiscal year 2025 (FY2025) with consolidated sales of $2.8 billion, a 20% increase over the prior year, driven by robust demand and strategic acquisitions.

The future outlook is anchored by margin expansion and market share gains, particularly in its Parts Supply segment, which accounted for 40% of FY2025 sales, and the Repair & Engineering segment at 32%. Management is focused on converting a large pipeline of government opportunities and reducing net leverage, which stood at 2.72x net debt to adjusted EBITDA at the end of FY2025.

Competitive Landscape

The global MRO market, valued at approximately $120 billion in 2025, is highly fragmented, but AAR holds a leadership position among independent service providers. The company's key competitive edge is its independent status, which eliminates the conflicts of interest faced by MROs owned by Original Equipment Manufacturers (OEMs) or airlines, allowing it to serve all aircraft types with unbiased solutions.

Here's the quick math: with North America's MRO market size at about $26.96 billion in 2025, AAR's $2.8 billion in sales gives it a substantial share of the independent segment, which is growing faster than the overall market.

Opportunities & Challenges

You need to see the opportunities and risks clearly mapped to make a decision. The market dynamics are strong, but operational execution is everything. AAR's strategic initiatives are directly aimed at capturing the high-growth, high-margin areas of the aftermarket. You can learn more about the company's long-term vision in the Mission Statement, Vision, & Core Values of AAR Corp. (AIR).

Industry Position

AAR's industry standing is defined by its role as a pure-play aftermarket specialist, a defintely valuable position in a market driven by an aging global aircraft fleet and new aircraft delivery constraints. The company's strategic portfolio optimization-like divesting the lower-margin Landing Gear Overhaul business for $51 million-is designed to boost its adjusted operating margin, which reached 9.6% in FY2025.

• Independent Leadership: AAR is the largest independent MRO in North America, a key differentiator against airline-affiliated shops (like Delta TechOps) and major OEMs (like Boeing Global Services).
• Digital Edge: The Trax software solution is a strategic asset, providing an integrated Enterprise Resource Planning (ERP) solution for airlines and MROs, enhancing AAR's value proposition beyond physical maintenance.
• Margin Focus: Adjusted EBITDA grew 34% to $324 million in FY2025, with the adjusted EBITDA margin expanding to 11.8%, indicating successful execution of the strategy to focus on higher-margin activities.

The company is positioned to benefit from the MRO 'super cycle,' where increased aircraft utilization and fleet aging drive higher maintenance demand. Still, a continued focus on debt reduction and efficient integration of new acquisitions, like the Product Support business, is crucial to sustaining the growth trajectory.