AAR announced Thursday it would purchase Aviation Worldwide Services and it subsidiaries, which include Presidential Airways and STI Aviation, from Xe Services, formerly Blackwater Worldwide, in a deal worth $200 million. In a conference call this morning with investors, David P. Storch, chairman and chief executive officer of AAR, said there are "no plans" to run the aviation unit as either a subsidiary or an affiliate associated with Xe Services.
Under Blackwater ownership, Presidential Airways found a lucrative business niche in providing aircraft for the State and Defense departments in places like Afghanistan and Iraq.
"The market for government aviation services represents a tremendous growth opportunity as our country provides resources and support for developing nations and other national interests," Storch said in a statement announcing the purchase.
Blackwater's air division includes 58 fixed-wing aircraft and helicopters, which provide transport services to a number of government customers in Iraq, Afghanistan and Africa, among other locations. Based on the contract currently in place, AAR says it expects annual revenue of between $170 million and $190 million.
The deal is expected to be completed next month.
Despite its rapid growth in revenue related to aviation services, Blackwater's public image took a repeated public beating in recent years, particularly after the 2007 Nisour Square shootings in Baghdad, in which 17 Iraqi civilians died. Since then, the company has faced a slew of lawsuits, bad publicity and even criminal allegations related to its private security contracting services.
The company last year even rebranded itself as Xe Services, a move that has done little to distance itself from controversy. Last month, Sen. Carl Levin, D-Mich., released the results of a Senate Armed Services Committee investigation that found that a Blackwater subsidiary named Paravant had misused weapons in Afghanistan, among other allegations.
In the meantime, the cloud over the Blackwater name continues to grow. Earlier this week, The Associated Press reported that the former head of the company is facing possible indictment related to alleged illegal possession of AK-47s at the company's facilities in North Carolina.
AAR, for its part, appears eager to distance itself from any image, real or not, that it is buying a business involved in weapons or armed military operations. Asked during the conference call if the air division would be involved in combat or counterinsurgency operations, Storch issued a firm reply: "No, not all."