TacticScaleWhat AAR Does & How It Makes Money (AIR)
Updated October 2026 · reflects AAR's latest reported financials
Aviation aftermarket parts, maintenance, and logistics services provider. It makes money by selling and leasing aircraft parts, charging for airframe and component maintenance and repair work, and running flight-hour-based component pool programs for airlines.
How AAR makes money
It makes money by selling and leasing aircraft parts, charging for airframe and component maintenance and repair work, and running flight-hour-based component pool programs for airlines. Government logistics contracts, software, and sales of manufactured pallets, containers, and shelters bring in additional revenue.
What AAR does
AAR Corp., founded in 1951 and headquartered in Wood Dale, Illinois, serves the commercial aviation, government, and defense markets. It has four segments: Parts Supply; Repair, Engineering, and Software; Government Solutions; and Legacy Commercial Programs. Its core business sells and leases used serviceable material, distributes new OEM-supplied replacement parts, and develops PMA parts for the aftermarket. The company provides airframe maintenance such as inspections, painting, modifications, and structural repairs, along with component repair and overhaul. It also offers cloud-based, mobile, and AI-enabled aftermarket software. On the government side, it provides supply chain logistics, fleet management of customer-owned aircraft, command-and-control system integration, and containers and shelters for military and humanitarian deployments. It also runs flight-hour-based component pool programs for airlines and distributes consumables and expendables.
Products & services
- Used serviceable material and new OEM parts distribution
- Airframe MRO services
- Component repair and overhaul
- Aviation aftermarket software
- Flight-hour component pool programs
- Military containers and shelters
What is AAR worth?
On an owner-earnings DCF, AAR's most-likely value is about $84 versus a recent price near $100 (16% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$39) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.
Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.
⚠ High leverage — net debt is 5.4× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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