Astronics vs. AAR: Which Is the Stronger Aerospace Services Stock?

Aparajita Dutta July 30, 2025

BA AIR ATRO

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Key Takeaways

Astronics posted 11.3% Q1 sales growth, fueled by surging commercial and military aircraft demand.
AAR saw a 12% rise in commercial sales and 18.1% growth in defense revenues in fiscal 2025.
ATRO's lower debt load and stronger EPS outlook suggest greater near-term resilience than AIR.

Rising global aircraft deliveries, expanding airline fleet sizes and increasing demand for maintenance, repair, and overhaul (MRO) services are fueling growth across the aviation services industry. These trends, supported by the steady recovery in global air travel and defense modernization programs, are boosting investor interest in aerospace service providers like Astronics Corporation (ATRO - Free Report) and AAR Corp. (AIR - Free Report) .

Astronics focuses on cutting-edge aircraft electrical systems, lighting technologies and connectivity solutions — essential for enhancing passenger experience and cockpit modernization in both commercial and military aircraft. AAR, meanwhile, operates as a diversified aviation services provider, offering aftermarket support, parts supply, and integrated solutions to airlines, governments and defense contractors across the globe.

With technological advancements, heightened focus on aircraft efficiency and gradually easing supply-chain pressures drawing attention to aviation support companies, ATRO and AIR remain in the spotlight for investors evaluating opportunities in this space. So, an investor is likely to be left with the inevitable question: Which stock emerges stronger? Let’s take a closer look to find out.

Financial Stability & Growth Catalysts: ATRO vs AIR

Astronics ended March 2025 with a cash and cash equivalent of $26 million. While its long-term debt totaled $160 million, as of March 2025-end, its current debt was nil. So, it is safe to conclude that the stock boasts a solid solvency position in the near term, which should enable it to duly meet its capital expenditure target of $35-$40 million in 2025.

A major part of this investment is expected to be dedicated to new product innovations to effectively expand core competency in its existing business. This financial stability should also bolster ATRO’s strategy of enhancing its value through strategic acquisitions.

In contrast, AAR’s cash and cash equivalents (including restricted cash) amounted to $96.5 million, as of May 31, 2025. Its long-term debt totaled $968 million, while its current debt was nil, at the end of the fourth quarter of fiscal 2025. So, one can safely conclude that the stock holds a solid solvency position for the near term, which should offer it the flexibility to invest in differentiated capability and efficiency to steadily meet the growing aftermarket services demand, and thereby capture more market share.

With respect to growth drivers, the steadily improving air passenger traffic worldwide (for the past couple of years), following a major setback during the initial years of the COVID-19 pandemic, has been playing the role of the primary growth catalyst for both ATRO and AIR. Evidently, Astronics registered an 11.3% year-over-year sales improvement in first-quarter 2025, partially backed by a solid 13.3% surge in its sales to the commercial transport market. On the other hand, AIR, during the fiscal fourth quarter, witnessed a solid increase of 12% in sales to commercial customers, partly driven by strong demand for new parts distribution activities.

Sales growth for defense-related aerospace parts and equipment, backed by an increasing defense product acquisition trend worldwide, has also been contributing to both ATRO and AIR’s top-line performance. Notably, an impressive 94.8% improvement in sales to the military aircraft market partially drove the 11.3% year-over-year overall sales improvement for ATRO in the first quarter of 2025. On the other hand, AIR witnessed a solid 18.1% improvement in its sales from the government and defense business segment during fiscal 2025.

In terms of divergent growth trajectories, AAR benefits primarily from rising MRO activity fueled by aging aircraft, increased fleet utilization, and delayed new aircraft deliveries. In contrast, Astronics is driven by growing demand for advanced avionics, in-flight connectivity, and aircraft electrification across both traditional and emerging aerospace markets.

Risks of Investing in ATRO & AIR

With ATRO and AIR operating in the broader aerospace sector, both stocks face industry-specific challenges that investors should consider before investing in them.

While both Boeing (BA - Free Report) and Airbus have signaled intentions to increase aircraft production rates in 2025 compared to 2024, actual growth so far has been slower than anticipated and remains below pre-pandemic levels. This shortfall is primarily due to ongoing supply-chain disruptions, an issue that continues to affect component suppliers like ATRO and AIR.

Given that both companies count Boeing and Airbus among their key OEM clients, the limited availability of critical parts and the resulting delays in aircraft assembly could suppress demand for the specialized equipment and systems supplied by ATRO and AIR. Consequently, this may weigh on their commercial aerospace revenue growth in the near term.

Moreover, the recently imposed U.S. import tariffs on many of the nation’s trading partners could cause long-term disruptions in global trade, with the aerospace sector being no exception, thus further exacerbating this sector’s supply-chain challenges. This, in turn, may negatively impact the commercial aerospace business of both ATRO and AIR.

How Do Zacks Estimates Compare for ATRO & AIR?

The Zacks Consensus Estimate for ATRO’s 2025 sales and earnings per share (EPS) implies an improvement of 6.4% and 37.6%, respectively, from the year-ago quarter’s reported figures. ATRO’s near-term EPS estimates have shown no movement over the past 60 days.