Government Contract Reliance: Reliance on U.S. government contracts, particularly with the Department of Defense, exposes AAR to risks related to defense spending cuts, budget appropriations, and competitive bidding processes, which could significantly impact revenue and profitability.

Aviation Market Volatility: The company's performance is highly sensitive to the overall health and stability of the global commercial and military aviation markets, including factors like airline profitability, air travel demand, fuel prices, and fleet modernization cycles, any downturns of which could reduce demand for MRO and supply chain services.

Supply Chain Disruptions: AAR relies on a complex global supply chain for aircraft parts and components, making it vulnerable to disruptions caused by geopolitical events, natural disasters, supplier failures, or raw material shortages, leading to increased costs, delivery delays, and potential loss of customer trust.