DULUTH – Airline-maintenance giant AAR Corp. is closing its Duluth facility, walking away from a 20-year lease and laying off hundreds of employees.
Many workers had been on furlough since April as business declined due to the steep drop in airline travel. Employees were notified Wednesday that they would be permanently laid off and the company would be closing its doors as of July.
“Due to the unforeseen business circumstances associated with the COVID-19 pandemic and its devastating effects on the commercial airline industry, our primary customer has informed us that we will receive no new maintenance projects at this site for the foreseeable future,” AAR told the state and city in an e-mail. “Accordingly, we have been forced to close our Duluth location.”
The company said about 275 jobs will be lost by the end of July.
AAR, a publicly traded company based in Illinois, began operating in Duluth in 2012 and was a growing player in the city’s aviation industry, which is anchored by Cirrus Aircraft and the Air National Guard base.
“The loss of AAR will have a big impact on the aviation sector and this region as a whole,” Tom Werner, executive director of the Duluth Airport Authority, said in a statement. “Our thoughts and support go out to the leadership and employees at AAR during this time. ... We have a strong aviation sector and new infrastructure that will put us in a good position for when new opportunities arise.”
At its peak, nearly 400 employees worked for AAR in Duluth, which had recently added a new maintenance bay and had been growing its workforce, thanks in part to a partnership with Lake Superior College.
“As a community we have invested a significant amount of time and attention into helping AAR be successful, and vice versa,” Mayor Emily Larson said in a statement. “As we adjust to our new financial realities, we are all forced to make decisions that are incredibly difficult.”
The building the company leases at the Duluth International Airport is owned by the city and was formerly home to Northwest Airlines. Last year AAR signed a 20-year lease at the facility and was until recently contracting with United Airlines to perform routine and emergency maintenance on its commercial fleet.
“The decision to close our Duluth facility and reduce our workforce was difficult given the skills and commitment of the employees at the site,” AAR spokeswoman Daniela Pietsch said. “The Duluth facility’s equipment will be transferred to other AAR maintenance, repair and overhaul stations.” The company has four other similar locations in U.S. and two in Canada.
“I was pretty confident we were coming back to work — things were just starting to pick up right before everything happened,” said AAR employee Kieran Cummings. “We can’t keep this place running if we don’t have any maintenance.”