Commercial Business Climbs At AAR Corp.
Commercial business at AAR Corp. was up sequentially and year-over-year (YOY) last quarter, pointing to signs of increased airline activity filtering down to the company’s variety of services that range from selling parts to overhauling airframes.
AAR boosted commercial sales 53% for the three months ended Aug. 31—its fiscal 2022 first quarter (Q1)—to about $268.5 million, the company said Sept. 23. Total commercial revenues account for 59% of consolidated sales that totaled $455.1 million and increased 14% YOY.
Sequentially, AAR said commercial sales were 17% higher in Q1 than the previous three months.
“This improvement was driven by our parts businesses, which is an encouraging indicator of returning demand,” President and CEO John Holmes said on a Sept. 23 earnings call. “The strong performance in the quarter was also due to the robust demand for our airframe MRO services. Notably, the significant majority of our MRO volume has been on standard maintenance work as opposed to catch-up work.”
While commercial services performed well “across the board” last quarter, Holmes said the end of the Northern Hemisphere summer peak season combined with continued lag in business travel is creating some headwinds. “We had increasing levels of activity throughout the quarter, [but] we have seen more stability and the pace of that recovery moderated in the last few weeks,” Holmes added. “We attribute that to the pullback in the bookings that you’ve seen from our commercial customers.”
While the company has customers around the world, AAR generates about 65% of its commercial revenue from the U.S.