Malaysia Airlines selects Airinmar for aircraft warranty management

BERKSHIRE - Malaysia Airlines has signed a multi-year agreement with Airinmar, a subsidiary of AAR CORP. (NYSE:AIR), for aircraft warranty management and value engineering services, according to a press release issued Thursday. AAR Corp, with a market capitalization of nearly $3 billion, has shown impressive momentum with a 46% stock return over the past six months, according to InvestingPro data.

The agreement will focus on maximizing warranty recoveries and reducing component repair costs for Malaysia’s national carrier. Airinmar’s services will complement the airline’s existing materials management operations. AAR Corp enters this agreement from a position of financial strength, with InvestingPro data showing liquid assets significantly exceeding short-term obligations and robust revenue growth of 17.6% over the last twelve months.

"We welcome this collaboration with Airinmar as part of our ongoing efforts to manage maintenance costs and improve efficiency across our operations," said Captain Nasaruddin A. Bakar, Chief Operating Officer of Malaysia Airlines.

Matt Davies, General Manager of Airinmar, stated that the company is "committed to working alongside Malaysia Airlines and assisting with the reduction of maintenance costs across the airline’s multiple fleet types."

Airinmar, which has over 40 years of experience in the aviation industry, provides tailored component repair and warranty management support services. The company aims to deliver reduced repair expenditure, improved component availability, and enhanced operational efficiencies for its clients.

Malaysia Airlines carries up to 40,000 passengers daily and is part of the Malaysia Aviation Group. As a member of the oneworld alliance, the airline offers connectivity to more than 900 destinations in 170 territories worldwide.

The financial terms of the agreement were not disclosed in the press release. While specific details remain private, AAR Corp’s overall financial health appears strong, with a current ratio of 2.91. For deeper insights into AAR Corp’s valuation and 10+ additional exclusive ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, AAR Corp. announced the pricing of a public offering of 3 million shares at $83 each, aiming to generate approximately $239 million in net proceeds. The offering includes a 30-day option for underwriters to purchase an additional 450,000 shares, potentially increasing proceeds to about $274.9 million. The company plans to use these funds to repay outstanding borrowings and possibly finance future acquisitions. In another development, AAR acquired ADI American Distributors for $146 million, expanding its parts distribution business. This acquisition was funded through AAR’s existing revolving credit facility and will be integrated into its Parts Supply segment. Additionally, Truist Securities raised its price target for AAR to $90 from $81, maintaining a Buy rating. This adjustment follows AAR’s fiscal first-quarter results, where revenue and adjusted earnings per share exceeded expectations, although free cash flow fell short.

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