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AAR Corp's Airlift Service Renewed - Analyst Blog

By: Zacks.com
Posted: 11/7/2012 4:49:00 PM
Referenced Stocks: AIR;HXL;LMT;RYCEY

AAR Corp. ( AIR ), one of the top contractors of aerospace, defense products and services in the world, declared that it has been selected by U.S. Transportation Command (USTRANSCOM) to continue its airlift support services for the U.S. Department of Defense operations based in Afghanistan. The renewal of the contract forms a part of the deal awarded to the company in October, 2010, and is valued at $161 million.

According to the terms of the contract, AAR will carry on its services to meet the U. S Military's Airlift requirement through using two Sikorsky S-92, six Sikorsky S-61, and two Bell 214 ST10 helicopters.

Additionally, the company will continue supporting the U.S. NATO ( North Atlantic Treaty Organization ) operations in Afghanistan and U.S. Department of Defense engaging its airlift operating entity by providing rotary-wing aircraft as well as fixed-wing support services. The aircraft allocated by AAR are specifically designed to transport personnel, cargo and mail while the support process offers personnel, tools and maintenance services.

The company has already established itself successfully within the U.S. Government and its associates in Afghanistan, serving transport and logistics requirement of the nation's defense forces. Thus, this renewal option is expected to strengthen the company's influence within the U.S. Transportation Command and Department of Defense.

Illinois based AAR Corp.'s provides a wide range of high-quality, and cost-effective technical services. The company's airlift unit is engaged in offering expeditionary airlift and specific aircraft services to assist national security, safety and humanitarian relief operations in various regions. The company competes directly with its peers such as Hexcel Corp. ( HXL ) , Rolls Royce Holdings plc ( RYCEY ) and Lockheed Martin Corporation ( LMT ).

We currently hold an Outperform recommendation on the stock. AAR Corp. has a Zacks #2 Rank, implying a short-term Buy rating (1-3 months).



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