AAR Corp. agreed to acquire a 65 percent interest in aircraft-maintenance company MRO Holdings for $1.8 billion, a move that directly addresses the structural shortage of maintenance capacity as airlines extend the life of aging jets.
The global commercial aircraft fleet averages 15 years old, with long-haul jets significantly older. A 20-year-old aircraft costs $5 million annually to maintain versus $2 million for a 10-year-old jet. Heavy maintenance checks, performed every six to 10 years, run $3 million to $6 million for labor and parts alone—potentially double that when factoring in lost revenue from aircraft downtime.
This dynamic feeds AAR's thesis: with Boeing and Airbus backlogs stretching 12 years and supply-chain constraints delaying deliveries, airlines cannot retire aging fleets fast enough. Over 16,000 aircraft on order will not arrive in time to replace current stock, forcing operators to maintain older, higher-cost airframes longer. Parts shortages amplify the problem. EirTrade Aviation purchased two bankrupt Spirit Airlines Airbus A320s last year purely for disassembly, signaling that used jets are now worth more as component inventory than as flying machines.
AAR currently provides MRO services, supply chain management and used serviceable material. The acquisition expands its maintenance capacity, component repair services and global distribution network to capture growth in higher-margin MRO and engineering services. The company serves commercial airlines, government agencies and defense customers with airframe maintenance, component repair, parts supply, engineering support and fleet management.
Shares of AAR are up over 65 percent year-to-date. Brokerages assign an average price target of $135.60. McMillan Office increased its AAR holdings by 66.7 percent in the first quarter to 500 shares valued at $55,000.
RTX Corporation, through Pratt & Whitney and Collins Aerospace, also competes in engine maintenance and aftermarket support. Transdigm Group holds dominant positions in proprietary aerospace components; its aftermarket revenue ties directly to hours flown, failures and regulatory compliance. Analysts see about 16 percent upside for Transdigm stock. Heico Corp. benefits from demand for certified replacement parts as customers avoid Original Equipment Manufacturer wait times through its Parts Manufacturer Approval business.
