AAR Wins Alaska Contract - Analyst Blog

By Zacks Equity Research,

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On Wednesday, AAR Corp ( AIR ) obtained Alaska Airlines ("Alaska") contract for providing component repair and management services for its fleet of 87 Boeing 737-700, 800 and 900 aircrafts. Such a repair and overhaul service contract toward a new cost-per-flight-hour program entails a timeline of 10 years.

As per the contract terms, AAR will be providing Alaska with reduced repair costs and increased component reliability integrated with guaranteed turn times.

AAR Allen Asset Management's President, John Holmes was quite excited about the renewal of AAR's long-standing partnership with Alaska.  He reminded of the company's successful track record in providing Alaska with high-value services in operating safe and cost-effective fleet.

Back in October 2011, AAR acquired Airinmar Holdings Limited ("Airinmar"), a leading provider of repair management services. Presently, the program management of this new Alaska contract rests in the hands of Airinmar.

The acquired London-based service provider, which is currently a part of AAR's Aviation Supply Chain group, will now support AAR's new Alaska contract with its systems and resources.

As per records, AAR's sales growth over time, has been primarily driven by notable surge in the repair and overhaul service demand. The strength at the company's supply chain business has already been proved effective in delivering value to customers, in such a scenario.

Building on its technical and financial capabilities, AARstrives to reinforce its position in the industry, wherein the big banners of the likes of Goodrich Corp ( GR ), Boeing Co ( BA ), Lockheed Martin Corporation ( LMT ) have revealed their successful play-offs.

We currently maintain a long-term 'Neutral' recommendation on the stock. On the other hand, AAR carries a Zacks # 4 Rank, which translates into a short-term (1-3 months) Sell' rating.

AAR CORP ( AIR ): Free Stock Analysis Report
BOEING CO ( BA ): Free Stock Analysis Report
GOODRICH CORP ( GR ): Free Stock Analysis Report
LOCKHEED MARTIN ( LMT ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AIR , BA , GR , LMT

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