Zacks_Analysts' Blog : AAR-Boeing Unite for RNLAF Deal - Analyst Blog

Defense contractor AAR Corp. (AIR) recently signed a letter of intent with Boeing Co. (BA), proposing to work together on a deal for maintaining and repairing helicopters for the Royal Netherlands Air Force (RNLAF).

The two companies have entered into a strategic cooperation deal on component maintenance, repair and overhaul (MRO) capabilities in order to support RNLAF rotorcraft operations.

AAR has extensive know-how with regard to servicing of aircraft components for air forces in Europe, the United States and other foreign countries. AAR Aircraft Component Services (AAR ACS), a division of AAR International, currently specializes in the overhaul, repair and maintenance of components for aircraft including RNLAF CH-47 Chinooks and KDC-10s, F-16s, C-130s and NATO AWACS B707 aircraft.

The ACS division is also foremost in providing component repair services for various Boeing and commercial/military aircraft. It has assisted Boeing set up a Next-Generation 737 Spares Exchange Program sharing supply chain logistics and warehousing responsibility and has been awarded the Boeing Performance Excellence Award for three consecutive years.

Boeing is currently working in collaboration with Dutch companies to improve CH-47 Chinook transport helicopters and AH-64D attack helicopters, partnering with the Netherlands Ministry of Defence Logistic Center Woensdrecht (LCW). Boeing’s partnership with LCW to expand MRO capabilities in-country strives to broaden the regional hub for military and civilian aircraft MRO activities and will grow the volume of MRO work in the Netherlands.

Of late, AAR also won a naval contract to provide airlift support for U.S. Navy ships. In addition, it has been awarded the cargo systems contract from EADS EFW, Germany. It is anticipated that all these strategic contract wins along with the company’s technical and financial expertise would drive sales growth over the coming quarters.

Based in Wood Dale, Illinois, AAR Corp. provides various products and services to the aviation and defense industries worldwide. The company operates in four segments: Aviation Supply Chain; Maintenance, Repair, and Overhaul; Structures and Systems; and Government & Defense Services. The company competes directly with its peers such as Goodrich Corp (GR), Boeing Co (BA), and Lockheed Martin Corporation (LMT).