AAR plans to wind down its commercial airline component repair business that, despite generating more than $250 million in sales over the past year, requires too much capital for too little return.
The Illinois-based aviation services company said it will phase out its Legacy Commercial Programs business over the next three to four years.
The business mainly covers flight-hour-based component repair programs for commercial airlines. Under those arrangements, suppliers often support airline components under long-term contracts tied to aircraft usage, rather than billing only for individual repairs.
AAR said the business generated $252.4 million in sales during the 12 months that ended February 28, 2026. But it produced only $5 million in adjusted operating income and posted a small GAAP operating loss of $200,000.
John Holmes, AAR’s Chairman, President and CEO, said the business no longer fits the company’s priorities.
“Legacy Commercial Programs requires significant asset pools and no longer meets our capital return thresholds,” Holmes said.
In plain terms, AAR is saying the business requires the company to keep too much money tied up in parts, assets and support infrastructure without producing enough profit.
The company said it expects to sell off assets tied to the programs during the wind-down. AAR also said it plans to move employees from the business into other growth areas rather than simply letting workers go.
AAR will continue to operate its main aviation aftermarket businesses, including parts supply, airframe and component MRO, software, government programs and fleet support.
The company is also changing how it reports its business. Starting in the fourth quarter of fiscal 2026, AAR will organize itself under four segments: Parts Supply; Repair, Engineering, and Software; Government Solutions; and Legacy Commercial Programs.
The Repair, Engineering, and Software segment will include AAR’s airframe and component MRO work, along with its Trax, Aerostrat and Airvoyant software platforms. Government Solutions will include fleet management, customer-owned aircraft operations, logistics programs and AAR’s Mobility Systems business.
The move comes during an active stretch for AAR. In April 2026, the company launched Airvoyant, an AI-driven aviation procurement platform; signed a commercial distribution agreement with Woodward; and completed its acquisition of Aircraft Reconfig Technologies, a cabin reconfiguration engineering company.
AAR is headquartered near Chicago and provides aviation aftermarket services to commercial and government customers in more than 20 countries.