Investor Day Quick Take: A Transformed Aviation AM Player w/ Runway Ahead

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Investor Day Quick Take: A Transformed Aviation AM Player w/ Runway Ahead

revenue growth to 0x May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26

AIR FY2 EV/EBITDA 3 Yr Avg. EV/EBITDA % vs. S&P 3 Yr Avg. % vs. S&P~12% (est 12.2%), with total revenue growth of ~19% (est 18.3%). For FQ4, the guide continues to be .

6-8% organic growth (est 7%) and 19-21% total growth (est 18%), with adj op margins of 10.2-10.5% Source: FactSet, Jefferies estimates

(est 10.3%). Our FQ4 EPS is $1.32/sh.

Aviation AM Share of <4% Today. AAR identifies its market share of the Aviation Aftermarket at

<4% today compared to an ~$80BB market in 2026, which is expected to grow at a ~4% CAGR to

~$90BB in 2029. The New Parts Distribution TAM is sized at ~$25BB today, of which AAR has

achieved ~4% share after a 28% CAGR from FY22 to LTM FQ3:26, having added 25+ new product

lines w/ a 100% renewal rate. The Repair TAM is ~$50BB compared to AAR at ~$950MM of LTM

revenues (~2% share) across Airframe MRO (~$575MM LTM) and Component MRO (~$375MM

LTM). The Aviation Maintenance & Engineering software ecosystem market is estimated at ~

$3BB growing at a MSD+ CAGR, compared to Trax revenues of ~$50MM today. The Gov't Programs

pipeline is sized at ~$48BB over the next 10 yrs vs ~$500MM of sales in the resegment.

Update on Commercial Air Travel. AAR notes YTD global commercial flight growth is up ~1-2%

despite capacity down 1-2%, a function of route profitability and not demand. Mgmt expects a

narrow range of growth outcomes from 2026, w/ the base case for ~4% CAGR of global ASKs to

2030, a high-end of ~5% CAGR and a low-end of ~3% CAGR.

Resegmentation Aligns Core Ops. AAR introduced a new segmentation emphasizing core parts,