AAR Signs MOU with KAI to Help Develop Commercial MRO in South Korea

Global maintenance providers establish strategic repair partnership

WOOD DALE, Illinois, September 9, 2015 – AAR (NYSE: AIR), a world leader in airframe maintenance and supply chain solutions, and Korea Aerospace Industries (KAI), the largest original equipment manufacturer (OEM) and maintenance, repair and overhaul (MRO) provider for military aerospace customers in Korea, have signed a Memorandum of Understanding (MOU) to work together to establish a commercial aircraft MRO facility in South Korea.

AAR’s 1MRO Network, the third largest in the world, will provide its industry-leading best practices in MRO as a consultant to KAI. The two providers are also considering operating the new facility under a joint venture.

Under the agreement, AAR and KAI will also focus on growing KAI’s MRO services to third-party customers/airlines. And AAR will lend its expertise on FAA and EASA certification and licensing requirements.

KAI, the only domestic aircraft OEM and total systems integrator in Korea, builds Apache helicopters for Boeing and jointly developed a next-generation fighter trainer with Lockheed Martin. AAR has a global reputation in the aviation sector for improving operational efficiencies and turn times, as well as lowering airlines’ operating costs through its customized solutions.

“KAI has a vision for expansion, and AAR, with its expertise and global reputation as the world’s leading independent provider of airframe maintenance, is the right partner to help us transition successfully to the commercial side of the business," said Sung Yong-Ha, CEO of KAI.

“This agreement with KAI is part of AAR’s efforts to further expand our reach in emerging markets such as Africa, the Middle East and Asia-Pacific,” said AAR Aviation Services COO John Holmes. “We are excited to partner with Korea’s premier military aerospace maintenance provider to help the organization streamline its operations, reduce costs and expand service across South Korea.”

AAR was named Best Airframe MRO Provider Worldwide by ATE&M, its third award in four years. AAR’s global network of warehouses servicing customers’ supply chain needs are located in Chicago, Singapore, Amsterdam and Hannover, Germany, with a new hub in Brussels now serving Europe, the Middle East and Africa. The Company serves customers in more than 100 countries from sales and service offices around the world.

About Korea Aerospace Industries

KAI is the only domestic aircraft manufacturer and total system integrator in Korea. It designs and assembles world-class aircraft and satellite systems and provides life cycle support for its products. Based in Sacheon, South Korea, the company develops basic, intermediate, and advanced trainer aircraft for fighter pilot training; helicopters for air transportation of troops to the armed forces; UAV, an unmanned air vehicle for maritime operations; and small civil air vehicles for leisure, industry, and flight training. It also provides various aero structures for a range of Airbus and Boeing commercial aircrafts; and upgrades and modifies existing aircraft for performance enhancement. In addition, the company provides aircraft MRO and ground based training systems for pilots and maintenance crews, and is involved in the development of multi-purpose satellites and related core parts, as well as in the satellite launching business.