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U.S.-based AAR has disclosed plans to reorganize its corporate divisions and confirmed plans to wind down its traditional commercial programs division.
The aftermarket specialist stated that from the fourth quarter this year, it will operate under four pillars. The Parts Supply division remains unchanged, continuing to emphasize new parts distribution and used serviceable material.
The newly created Repair, Engineering and Software division will comprise AAR’s repair activity related to airframe and components, together with its software portfolio, including MRO software Trax, heavy maintenance management software Aerostrat, and the AI-enabled Airvoyant platform, unveiled by the Wood Dale, Illinois-headquartered company last month.
AAR’s Government Solutions unit will cover fleet management, customer-owned aircraft and performance-based logistics tied to government contracts. Mobility Systems, which supplies military rapid-deployable equipment and mobile tactical shelters to governments, militaries and nonprofit organizations, will now report to Government Solutions, previously categorized under Expeditionary Services.
AAR’s Legacy Commercial Programs division includes flight-hour-based component programs for commercial airlines. This unit previously operated under the Integrated Solutions division. AAR intends to gradually discontinue this division. “Legacy Commercial Programs demand substantial asset pools and fail to meet our capital return targets,” said John Holmes, AAR’s chairman, president and CEO. “We estimate that winding down will take three to four years.”
AAR’s Legacy Commercial Programs business achieved sales of $252.4 million in the 12 months ending Feb. 28, 2026. AAR reported an operating loss of $0.2 million, with an adjusted operating income of $5 million. Net assets of the Legacy Commercial Programs segment up to the same period were approximately $160 million, according to AAR.
“Our segment realignment reflects AAR’s continued focus on growth, margin expansion and additional cash flow generation,” Holmes said. “Legacy Commercial Programs necessitates major asset pools and no longer meets our capital return thresholds. We anticipate the wind-down of this segment will take approximately three to four years.”
Holmes noted that during the phase-out, the division may record periodic gains from asset divestments supporting legacy programs. “We also aim to reassign our skilled team to other AAR growth projects,” he said. “Ultimately, we believe ending Legacy Commercial Programs will streamline our business model, enhance margins and boost capital returns.”
AAR specified that fourth-quarter and fiscal year 2026 guidance, ending May 31, 2026, remains unchanged and will not be affected by the segment realignment or plans to phase out the legacy division.
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