USTRANSCOM Extends AAR Contract

AAR Corp. (AIR - Analyst Report) recently announced that it has been selected again by the United States Transportation Command (USTRANSCOM) to continue providing airlift support in Afghanistan. The contract was initially awarded to the company in 2008. The renewal is effective immediately and will continue through November 2013. The value of the contract renewal is estimated at roughly $143 million. Earlier, in November 2012, the company also extended another airlift contract with USTRANSCOM.

Per the terms of the contract, AAR Airlift will provide rotary-wing aircraft and related personnel, equipment and maintenance to transport personnel, cargo and mail in support of U.S. and NATO operations based in Afghanistan. The company will deploy 10 heavy-lift Sikorsky S-61 and two medium-lift Puma SA 330J helicopters for the operations.

The company has a strong track record of winning contracts from the US government. This extension of the contract further strengthens the company’s presence in the U.S. government and its associates in Afghanistan.

Randy Martinez, President of AAR Airlift, comprehends the extension as the U.S. government’s continued confidence in the company. According to him, the government approves of the company’s ability to meet the strenuous task of supporting tactical airlift missions in challenging environments.

Illinois-based AAR Corp. provides a wide range of high-quality, and cost-effective technical services. AAR currently supports the U.S. Department of Defense in Afghanistan, Africa and the Pacific Rim, and is ranked one of the top defense contractors in the world.

AAR Corp. has a Zacks #3 Rank, implying a short-term Hold rating (1-3 months). The company competes directly with its peers such as Hexcel Corp. (HXL - Snapshot Report) and Lockheed Martin Corporation (LMT - Analyst Report), both Zacks #3 Rank stocks.