AAR to Restructure Key Operations and Wind-Down Legacy Commercial Programs
AAR CORP. has announced that the company is beginning a restructure of four operating segments, taking full effect in Q4 of fiscal year 2026.
The four segments experiencing changes are:
- Parts Supply
- Repair, Engineering and Software
- Government Solutions
- Legacy Commercial Programs
While the Parts Supply segment is largely maintaining the same structure, AAR is adding new used serviceable material and parts distribution services.
In the Repair, Engineering and Software segment contains the company’s airframe MRO and component services, as well as AAR’s software platforms:
The Government Solution segment now contains programs like:
- Fleet management and operations for customer-owned aircraft
- Performance based logistics
- Mobility Systems activity (previously Expeditionary Services)
One of the biggest changes is the wind-down of AAR’s Legacy Commercial Programs, which consist of component repair programs based on flight hours for asset-heavy airlines.
AAR notes that guidance remains the same for the fourth quarter and fiscal year 2026, ending May 31, 2026, remaining unaffected by these developments.
AAR’s Chairman, President and CEO John M. Holmes said, “Our segment realignment reflects AAR’s continued focus on growth, margin expansion, and additional cash flow generation.”
Holmes continued, “Legacy Commercial Programs requires significant asset pools and no longer meets our capital return thresholds. We anticipate that the wind-down of this segment will take approximately three to four years.”
“During that timeframe, we expect the results will include periodic gains as we divest the assets that support these programs,” added Holmes, “We also plan to redeploy the talented team supporting these activities to other AAR growth initiatives.”
He concluded, “Once complete, we believe the wind-down of Legacy Commercial Programs will result in a more simplified business model with higher margins and improved returns on capital.”