AAR (NYSE: AIR) announced today that it was selected by the team of Kawasaki Heavy Industries and ShinMaywa Industries to manufacture cargo handling systems for the Kawasaki C-2, formerly the C-X aircraft. The C-2 is Japan's next-generation military transport aircraft slated to replace its aging C-1 fleet. AAR is manufacturing systems for two initial production aircraft, with delivery expected to be completed in calendar year 2013. The overall program requirements are expected to run for ten years.

AAR worked with Sojitz Aerospace, international distributor for the C-2 program, and has been working with Kawasaki Heavy Industries and ShinMaywa Industries since it was selected to design and develop the aircraft's cargo system in 2004. The systems are being produced at AAR's Cargo Systems Division at its Goldsboro, North Carolina manufacturing facility.

"We are very proud of our role in the development and production of this new cargo aircraft designed to support the Japanese Ministry of Defence transport requirements," said Terry Stinson, Group Vice President for AAR's Structures and Systems segment. "The order further strengthens AAR's position as a leading cargo systems provider to the global aerospace market and we are pleased to extend our close working relationship with Kawasaki and ShinMaywa Industries."

AAR plans to expand its cargo systems business with the acquisition of Telair International GmbH and Nordisk Aviation Products, known for their leadership position in the commercial cargo market. The acquisition is expected to close during the first week of December.