AAR to close Duluth airline repair facility
The company has said it expected to lose 70% to 80% of its business because of the pandemic.
The AAR Corp. aircraft maintenance base at the Duluth International Airport will close, a local company official confirmed to the News Tribune on Wednesday.
The move comes just six weeks after the Duluth Economic Development Authority, which owns the former Northwest Airlines maintenance hangar, agreed to waive three months of rent totaling $111,700 as AAR expected to see a 70% to 80% company-wide drop in business because significantly fewer people are taking commercial flights during the COVID-19 pandemic.
In an emailed statement to the News Tribune on Thursday afternoon, AAR spokesperson Daniela Pietsch said the facility will close permanently on July 24 and 269 employees would be laid off, 238 of which were already furloughed.
"Our primary customer has been unable to commit to any new maintenance work for the foreseeable future at the Duluth facility," Pietsch said.
Most recently, the Duluth AAR facility serviced United Airlines fleet of Airbus A320s.
Last summer, the facility employed 340 people and had plans to hire 40 more.
Tom Werner, executive director of the Duluth Airport Authority, said he was sad to hear AAR was closing.
"The loss of AAR will have a big impact on the aviation sector and this region as a whole. ... We have a strong aviation sector and new infrastructure that will put us in a good position for when new opportunities arise,” Werner said in an emailed statement to the News Tribune.
News of the closure was first reported by KBJR .
AAR and DEDA signed a new 20-year lease in July 2019 setting monthly rent at $36,500 for 80% of the 190,000 square-foot building. For five years, $50,000 of AAR’s annual rent to DEDA was set to be spent on the recruitment and training of AAR employees.
Those efforts were largely supported by Lake Superior College, which trains technicians and mechanics for AAR.
"It's devastating news for our community," said Daniel Fanning, the college's vice president of institutional advancement and external relations. He estimated 50 current LSC students were working there and that one-third to one-half of the facility's workforce consisted of former LSC students.
Fanning, who was the city's community relations officer when AAR opened in 2012, said he remembers the hard work it took former Mayor Don Ness and others just to bring the company in and take over the hangar that remained empty after Northwest left in 2005.
"(AAR) came here for the exact reasons that they were successful over the last few years — a strong workforce and strong community connections," Fanning said. "And it was working. Honestly, our programs were growing the last couple of years, I know their workforce was growing, and in many ways, it was really starting to fire on all cylinders."
Then the COVID-19 pandemic and stay-at-home orders came and airline traffic plummeted.
"COVID, obviously, has devastated the aviation industry," Fanning said.
AAR in Duluth began servicing Air Canada’s fleet of Airbus A320s in 2012 under a five-year contract but most recently held a contract repairing United Airlines’ fleet of the same plane.
Pietsch said the Duluth facility's equipment will be moved to other AAR facilities. AAR continues to operate four facilities in the U.S. and two in Canada.
City spokesperson Kate Van Daele would not confirm or comment on AAR's closing on Wednesday.
This story was updated at 2:51 p.m. May 21 with quotes and additional information from AAR spokesperson Daniela Pietsch. It was originally posted at 7:25 p.m. May 20.