JOHANNESBURG, Oct. 6, 2016 /PRNewswire/ -- AAR (NYSE:
AIR), a world leader in airframe maintenance and integrated supply
chain solutions, has signed a five-year agreement to provide
power-by-the-hour (PBH) component inventory management and repair
services to South African Airways Technical (SAAT) Ltd. The
contract is valued up to $125
million.
"This agreement marks a significant expansion of AAR's aviation
and supply chain services in emerging markets," said David P. Storch, President, Chairman and CEO,
AAR. "We are pleased to win the confidence of this leading airline
customer in Africa."
AAR has teamed with local joint venture partner, JM Aviation
South Africa (Pty) Ltd., to support South African Airways' (SAA)
fleet with nose-to-tail component and repair management. JM
Aviation will provide day-to-day, on-the-ground account management
and technical support and will work closely with AAR's global parts
supply warehouse team in Brussels.
Work officially began on October
1.
The joint venture also will focus on growing SAAT's MRO services
to third-party customers/airlines across the continent, and
fulfills a key objective of the South African government to extend
aviation services contracts to black-owned firms that, like JM
Aviation, are certified BBBEE, or broad-based black economic
enterprise businesses.
In addition, AAR will offer its industry-leading airframe and
avionics skills training to SAAT and JM Aviation workers,
facilitating a knowledge transfer to support the growth of
black-owned businesses in Africa's
aviation sector, among the fastest-growing in the world.
"We're excited to lend our award-winning experience to reduce
costs to the airline and support growth of Africa's air travel industry for years to
come," said John Holmes, Chief
Operating Officer, Aviation Services, AAR.
"Africa is a dynamic and
growing market full of potential. Working with SAAT not only is an
opportunity for AAR to grow its presence in Africa, it is an opportunity for SAAT to
create access to lucrative jobs and business opportunities for
locals through the skills training that AAR will provide," added
Cheryle R. Jackson, President, AAR
Africa.
SAAT will gain access to AAR's operational analysis and
technical assistance for MRO, as well as warehouse facilities and
integrated IT solutions for MRO. AAR has a global reputation in the
aviation sector for improving operational efficiencies and turn
times, and lowering costs through its customer-centric solutions.
AAR also will support expansion of SAAT's component repair
capabilities, including landing gear, and potentially support a new
MRO facility in West and Central
Africa to meet growing regional travel in sub-Saharan Africa
and increasing international travel to the continent.
"We are excited to work with an industry-leading partner that
not only will enable us to reduce costs and improve fleet readiness
but will also fortify our workforce with mission-critical skills
necessary to support future growth," said Musa Zwane, CEO of SAAT.
The agreement represents a significant expansion of AAR in
Africa, where the Company recently
established a base of operations in Johannesburg and appointed Jackson its first
president of AAR Africa. The Company has been solidifying its
foothold in Africa the last two
years, signing its first PBH component inventory management and
repair services contract in 2014 with Kenya Airways to support its
fleet of 737NGs. More recent deals include a PBH contract with
fastjet, the award-winning, Africa-based low-cost airline, illustrating
the global reach of AAR's supply chain solutions.
About SAAT
South African Airways Technical (SOC) Ltd.
(SAAT) is a full-service MRO organization, the largest in
Africa. SAAT has held full and
uninterrupted U.S. Federal Aviation Authority (FAA) certification
since the late 1980s, serving a range of local and international
airlines. SAAT was corporatized on April 1,
2000, and fully registered as SAA Technical (SOC) Ltd., to
become a wholly owned subsidiary of SAA (SOC) Ltd.
SAAT is sole provider of aircraft maintenance to SAA, Mango and
Comair/Kulula, who are the premier carriers in South Africa. SAAT also provides MRO services
to a variety of regional and other airlines such as Air Namibia,
Rwandair, TAAG, Arik Air, Trans Air Congo, Korongo Airlines, Air
Zimbabwe, Air Mauritius, Air France, KLM and Turkish Airlines among
others. Market segments include major airframe checks; engine
overhaul; mechanical components; avionics; and line maintenance.
SAAT's main operational base is Johannesburg and it also services customers at
Cape Town, Durban and other regional airports.
About AAR
AAR is a global aftermarket solutions
company that employs more than 4,500 people in over 20 countries.
Based in Wood Dale, Illinois, AAR
supports commercial aviation and government customers through two
operating segments: Aviation Services and Expeditionary Services.
AAR's Aviation Services include inventory management; parts supply;
OEM parts distribution; aircraft maintenance, repair and overhaul;
and component repair. AAR's Expeditionary Services include airlift
operations; mobility systems; and command and control centers in
support of military and humanitarian missions. More information can
be found at www.aarcorp.com.
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This press release
contains certain statements relating to future results, which are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on beliefs of Company management, as well as
assumptions and estimates based on information currently available
to the Company, and are subject to certain risks and uncertainties
that could cause actual results to differ materially from
historical results or those anticipated, including those factors
discussed under Item 1A, entitled "Risk Factors", included in the
Company's Form 10-K for the fiscal year ended May 31, 2016. Should
one or more of these risks or uncertainties materialize adversely,
or should underlying assumptions or estimates prove incorrect,
actual results may vary materially from those described.
These events and uncertainties are difficult or impossible to
predict accurately and many are beyond the Company's control.
The Company assumes no obligation to update any forward-looking
statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or
unanticipated events. For additional information, see the comments
included in AAR's filings with the Securities and Exchange
Commission.
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