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WOOD DALE, Ill. - AAR CORP. (NYSE: AIR), a major provider of aviation services with a market capitalization of $2.46 billion, has extended its exclusive agreement with FTAI Aviation Ltd. (Nasdaq: FTAI) to supply CFM56 used serviceable material (USM) to the global aviation aftermarket until 2030. The partnership, first established in 2020, enables AAR to manage the teardown, repair, marketing, and sales of spare parts from FTAI’s CFM56 engine pool, which includes over 450 engines.
AAR’s role in the collaboration involves leveraging its worldwide network to meet the growing demand for the CFM56 engine platform, a popular choice in the industry. The company has expanded its Component Services operations by acquiring five additional global component repair facilities, enhancing its ability to support a wider range of engine components. This expansion has contributed to AAR’s impressive 18.53% revenue growth, with total revenue reaching $2.57 billion in the last twelve months. For detailed analysis of AAR’s growth strategy and market position, investors can access the comprehensive InvestingPro Research Report.
John M. Holmes, AAR’s Chairman, President, and CEO, stated, "The demand for this industry-leading engine platform continues to grow, and our collaboration supports the needs of the global aviation aftermarket." He emphasized AAR’s commitment to combining its strong reputation for engine USM offerings and global sales team with FTAI’s market position through the next decade.
Joe Adams, Chairman and CEO of FTAI Aviation, also expressed satisfaction with the extended partnership, highlighting the value delivered to the CFM56 aftermarket and the shared goal of offering cost-effective maintenance solutions that benefit airlines worldwide.
The CFM56 engine series is widely used across the commercial aviation sector, and the agreement between AAR and FTAI Aviation underscores the importance of maintaining a reliable supply of serviceable parts for these engines. According to InvestingPro data, AAR maintains a healthy financial position with a strong current ratio of 2.68 and EBITDA of $176.1 million, supporting its ability to execute on strategic partnerships.
AAR, headquartered near Chicago, operates in over 20 countries and provides a range of services to commercial and government customers. FTAI Aviation specializes in owning and maintaining commercial jet engines, focusing on the CFM56 and V2500 engines, and often acquires engines through its jet aircraft leasing business.
This extended agreement is expected to bolster AAR and FTAI’s market positions by ensuring a steady flow of serviceable parts for one of the most common engine types in commercial aviation. With analyst price targets ranging from $75 to $85 and an overall Financial Health Score of FAIR from InvestingPro, AAR appears well-positioned to capitalize on this extended partnership. The information presented in this article is based on a press release statement and InvestingPro analysis.
In other recent news, AAR Corp has announced the election of Hema Widhani to its Board of Directors, expanding the board to 12 members. Widhani’s expertise in digital transformation and AI technology is expected to enhance AAR’s growth strategy. Additionally, AAR Corp has secured an exclusive multi-year distribution deal with Chromalloy’s subsidiary, BELAC LLC, for high-pressure turbine blades for PW4000 engine platforms. This agreement aims to bolster AAR’s engine portfolio and improve supply chain reliability in the aviation industry.
In related developments, Airbus reported a 6% year-over-year increase in revenue to 69.2 billion euros for Q4 2024, although adjusted earnings per share (EPS) declined to 5.05 euros from 5.36 euros. Despite the mixed earnings results, Airbus remains optimistic about 2025, targeting 820 aircraft deliveries. Analyst discussions during the earnings call highlighted Airbus’s strategic partnerships and supply chain challenges, particularly with engine suppliers.
These recent developments underscore AAR Corp’s strategic initiatives and partnerships as it navigates the evolving aerospace landscape.
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