AAR Corp Embracing Digital Transformation, Drones, and Increasing Demand for Connectivity in Commercial and Military Aviation

The last two years have been challenging for AAR Corp, the world’s largest independent non-airline non-OEM affiliated aviation maintenance services company. However, as shown through a recent interview with Avionics International, the company never stopped innovating and adopting new technologies to make the various work flows across their various aviation services divisions more efficient.

“We had a lot of maintenance activity on the government and military side of our business to offset the challenges that we were seeing commercially, especially within the first six to 12 months of the pandemic. Our mix of businesses and our independent position allowed us to weather it well and actually really to come out stronger on the other side,” Matt Kammerait, Vice President Digital Product Management AAR Corp., told Avionics.

AAR Corp ended 2021 on an upswing for some segments of its business, reporting a 33% increase in services sales to commercial airlines compared to its second-quarter period in 2020. There have also been some significant contract wins over the last six months for the company for both commercial and military aircraft operators that reflect the unpredictable recovery pattern of air travel and AAR’s growing existence as a prime contractor of aftermarket aircraft maintenance and parts services to U.S. military agencies, including the Navy and Air Force, two of their biggest customers.

Among the most significant wins were a five-year renewal of a power-by-the-hour component pool and repair support program for flydubai’s fleet of 33 total 737 Next Generation aircraft. In December, the United States Air Forces in Europe (USAFE) awarded AAR a 10-year contract to provide depot work as well as Service Life Extension Program modifications and maintenance for a fleet of F-16s based in Europe. Avionics modifications, drop-in maintenance, and full strip, paint, and corrosion control are also required as part of the USAFE contract.

Kammerait said that while the company did have to make some difficult decisions operationally, much like other commercial and military aircraft maintenance companies, they continued to adopt new technologies within their hangars and information sharing systems as well.

“There are some emerging technologies we have been adopting and using increasingly in recent years, things like augmented and virtual reality. We’re also starting to use drone technology, mainly for replacing visual inspections. When we first bring an aircraft to our facility, before we start taking it apart—for example, for a heavy maintenance check—there is an initial scan that today usually has two people spending 10 to 12 hours each, running through a paper checklist, and is subjective to other activities that might be occurring at the time,” Kammerait said.

Using drones as a capture platform and a method of flowing imagery and digital information into artificial intelligence-based classifications systems allows AAR Corp. technicians to identify defects, capture sensor data, and establish a digital record of the state of the aircraft much faster than using the human eye.

“The use of drones has really helped reduce the amount of time that would be required with humans performing those visual inspections. It’s actually something we’re working closely on with a couple of customers, with the FAA as well; it’s made its way into the Airbus manual for the A320, but we’re working very hard with both our technology partners and regulatory groups and even OEMs on getting drone inspections codified as an acceptable alternative to traditional GBI,” Kammerait said.

According to Kammerait, AAR’s information, data sharing, and digital infrastructure runs on Microsoft Azure; he describes the company as an “Azure-based shop.”

AAR took a forward-looking step in that regard even before the biggest impact of the COVID-19 pandemic started to hit the commercial airline industry in 2020, with the 2019 launch of AirVolution, their digital business intelligence tool for cloud-based component repair management. The company describes AirVolution as enabling digital oversight of every active repair within a fleet owner’s operation. AirVolution can also process quotes for parts and provide a digital glimpse at fleetwide maintenance schedules in real-time.

“We see every part of MRO operations moving in a much more digital direction over time,” Kammerait said.

Another area where AAR is looking to become increasingly digitally savvy is within the realm of using different aircraft data communications pipes such as new ground and satellite-based aircraft connectivity networks. In December 2020, AAR extended its aftermarket management services agreement for Viasat’s in-flight connectivity (IFC) technology that includes the aftermarket inventory pool of Viasat components including modems, antennas, radomes, wireless access points (WAPs), and power supply units (PSUs) as well as third-party logistics and aircraft on ground (AOG) support.

Kammerait said that AAR’s latest activity with Viasat includes working on some systems integration and enhancing the way some of their internal information sharing systems communicate with Viasat’s. Regarding the use of connectivity, Kammerait said AAR did not see demand for in-flight connectivity installations and modifications decrease as much as other scheduled aftermarket modification work for commercial airlines.

Many of their airline customers also want to leverage some of the connectivity systems on their aircraft for predictive maintenance and using the higher speeds and more robust networks to collect accurate and real-time information of the health of every sensor-connected component in their fleet. Kammerait admits that there are still many challenges that exist around data ownership, security, and preferences for sharing operational data about aircraft components and systems between airlines or operators and OEMs or other stakeholders.

“In the long-term, we’re bullish that operators and OEMs will see value in providing some of that operational data downstream. If it means enabling predictive maintenance, ensuring turnaround times are met or heavy maintenance occurs on schedule, all of those things translate to real value in the real world,” Kammerait said. “The amount of data available on newer generation aircraft such as the MAX and A320neo is massive. We find a lot of operators saying they wish they had more opportunity to put all that data they’re collecting and sorting and wrangling for their own purposes to work, upstream and downstream, so we definitely have active discussions going on that front. I do think there’s still some data platform work and some questions that need to be answered there about where does it live; how long do you store it, what types of temporary access can be provided for certain types of services; we’re actively working through those challenges.”

During an appearance at the Citi 2022 Industrials Conference in February, John Holmes, President and CEO, AAR Corp., discussed how the company is continuing to adjust to the challenges and opportunities that exist on the commercial and military sides of their aviation services business lines.

An area where Holmes expects AAR Corp. to grow beyond pre-COVID-19 pandemic levels is within its Used Serviceable Material (USM) parts business, making re-certified used aircraft parts available in the commercial aftermarket.

“We tear down dozens of aircraft and engines each year, re-certify those parts, and then sell them into the open market, and these parts are the same part number, form, fit, and function as a brand new part. But, because they’re used, they’re often sold at 30 to 40 to 50 or 60 percent less than buying a new part from the OEM,” Holmes said.

Holmes said he also expects increased demand for used aircraft parts and components as more airlines become properly structured internally to acquire them.

“In the USM business, we expect to recover at beyond the levels that we were pre-COVID because we believe that there has been and will continue to be increased user adoption of used material; it’s harder for an airline to buy a used part than it is to buy a new part,” Holmes said. “To be able to be setup to receive parts that have been flown before, have been repaired before, that requires a different set of procedures within an airline, and once those things are set up and you’re able to buy used parts, a lot of airlines are looking at that lower-cost alternative because of COVID; that expands the potential market.”