Introducing New Segment Model, Same Parts and Heavy Check

研报英文原文证据摘录

Introducing New Segment Model, Same Parts and Heavy Check

AAR Corp. (AIR)

Equity Research

July 14, 2026

In FY26, we estimate Repair, Engineering, & Software generates 11.2% margins, down 30 bps y-o-y,

driven by the HAECO Americas dilution. The deployment of the AAR operating model to the HAECO

sites support margins improving to 12.1% by 2028 and 14.0% in 2030 on our estimates, assuming

20-30% gross incrementals on Component Repair, 15-25% gross incrementals on Airframe MRO,

and 40% gross incremental on Software. AAR is driving better MRO increments from the footprint

optimization & exiting of the highest-cost location in Indianapolis as work is transitioned to HAECO

Americas' North Carolina and Florida footprints over the 12- to 18-month integration plan, where labor

is more available.

In FY27, we estimate RES generates 11.5% margins, up 30 bps y-o-y, on improving MRO incrementals

(footprint optimization from above) to 18% and favorable mix shift toward Software revenues (+20 bps

mix, ~40% incremental vs RES total ~20%).

Exhibit 6 - Repair & Engineering Margins - HAECO Americas Creates Near-Term Dilution with Goal of Deploying

AAR Model to Drive Margins to Existing Airframe MRO Average in the Low Teens; Component Repair and

Software Accretive to Segment & Overall AAR

Repair & Engineering & Software Cumulative

2024 2025 2026E 2027E 2028E 2029E 2030E 2025-2030E

Airframe MRO Start Adj Operating Income $34 $52 $107 $118 $132 $145 $169 $107

in LDD, but

Operating Income (3) (11) 5 11 13 24 29 81 marginsHAECO Americas

Airframe MRO Facilities 8 6 3 1 3 12 16 35 starting point is LSD

with goal of reaching Component Repair & PMA 1 1 (1) 7 7 7 8 27

average margins

Landing Gear Overhaul (12) (18) 0 0 0 0 0 0 through optimization

Software 0 0 3 3 4 4 5 19