AAR to help maintain British AWACS planes

LONDON, England, 11 August 2005. AAR Corp. announced today that its Defense Systems and Logistics division has been selected as part of the Northrop Grumman team to provide aircraft-maintenance and design-engineering support services to improve availability and reduce through-life ownership costs for the United Kingdom's Royal Air Force fleet of E-3D Sentry Airborne Warning and Control System (AWACS) aircraft.

Aug 11th, 2005

LONDON, England, 11 August 2005. AAR Corp. announced today that its Defense Systems and Logistics division has been selected as part of the Northrop Grumman team to provide aircraft-maintenance and design-engineering support services to improve availability and reduce through-life ownership costs for the United Kingdom's Royal Air Force fleet of E-3D Sentry Airborne Warning and Control System (AWACS) aircraft.

Northrop Grumman was selected as the Preferred Bidder by the UK Ministry of Defence in July 2004.

Northrop Grumman's IT sector, the overall lead on the program, will manage the maintenance schedule for the AWACS aircraft to ensure that only one aircraft, out of a fleet of seven, is in scheduled maintenance at any given time.

AAR's role is to provide supply chain services, including parts procurement, distribution and repair, to help reduce costs, increase parts availability, shorten lead times and minimize downtime.

The Sentry is the United Kingdom's principal early warning and control aircraft and gives vital strategic support to the UK armed forces in operations around the world. The Royal Air Force operates seven of the Boeing 707-based aircraft at RAF Waddington and the contract supports the aircraft through the out-of-service date, which will be in the mid 2020s.

The Sentry Whole Life Support Programme contract is valued at approximately 665 million pounds sterling over 20-plus years. The contract is fixed price for the first five years and target cost incentive fee for the remaining 15 years. The contract is fully funded for the entire 20-year term. As part of the Northrop Grumman team, AAR expects to generate over 12.5 million pounds sterling annually for the duration of the contract.

AAR Defense Systems and Logistics currently works with Northrop Grumman to provide supply chain management services to support the U.S. Air Force Joint STARS program and earned Northrop Grumman's Operation Enduring Freedom Award for 100 percent on-time support of 254 successful JSTARS deployments.

Commenting from the Sentry Whole Life Support Event at Royal Air Force Waddington, Lincolnshire, UK, David P. Storch, president and CEO of AAR, said, "This contract builds upon the excellent relationship we've established with Northrop Grumman in support of the U.S. Air Force Joint STARS program. We look forward to extending our excellent service record and partnering with Northrop Grumman to support the Royal Air Force's AWACS modernization programme."

AAR is a leading, diversified provider of products and value-added services to the worldwide aerospace/aviation industry. Products and services include proprietary inventory management and logistic support services; maintenance, repair and overhaul of aircraft and aircraft components; aircraft sales and leasing; and manufacturing of aircraft parts and mobility systems. Headquartered in Wood Dale, Ill., AAR serves commercial and government aircraft fleet operators and independent service customers throughout the world. For more information, see www.aarcorp.com.

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