AIRT 10-K & 10-Q changes, risk factors and insider trading
Air T Inc. (also AIRTP) · Nasdaq · Air Courier Services · CIK 353184 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to Rex”
New heading “Risks Related to Rex”
New heading “We may not be able to successfully integrate Rex into our operations, including our financial reporting processes, which could adversely affect our business, results of operations, and financial condition.”
New heading “Rex operates in a highly regulated industry, and failure to comply with applicable laws and regulations could materially adversely affect our business.”
New heading “Rex’s ability to return its Saab 340 fleet to service depends on the availability of engine overhaul capacity, parts, and skilled labor, and failure to achieve fleet reactivation milestones could result in non-compliance with the Rex Regional Commitments and adverse consequences under the Commonwealth Facilities.”
New heading “Rex derives an important portion of its revenues and network position from state government regulated route contracts and protected airport slots that are subject to periodic re-tender, renewal, or expiration, and the loss of these arrangements could adversely affect Rex’s business.”
New heading “The Rex Acquisition involves risks related to voluntary administration proceedings in Australia and the DOCA structure, including uncertainties regarding liabilities, claims, obligations, and potential adverse impacts on customer and counterparty acceptance of Rex’s business following the proceedings.”
New heading “Risks Related to Accounting and the Bargain Purchase Gain”
New heading “The recognition of a bargain purchase gain could increase scrutiny by investors and regulators, and could lead to disputes regarding valuations and assumptions.”
New heading “Risks Related to Foreign Operations, Currency, and Financing Exposure”
New heading “A significant portion of Rex’s revenues, expenses, assets, and liabilities may be denominated in Australian dollars, and fluctuations in exchange rates could adversely affect our reported results.”
New heading “We incurred and assumed significant obligations in connection with the Rex Acquisition, including obligations related to CFA Debt, and we may require additional liquidity to support Rex’s operations.”
New heading “Rex’s operating costs and revenues may be subject to volatility, and Rex may not be able to offset cost increases or revenue decreases through pricing or other measures.”
New heading “A substantial portion of Rex's workforce is represented by labor unions under Enterprise Agreements, and labor disputes, work stoppages, or unsuccessful negotiations of replacement agreements could disrupt Rex's operations and adversely affect our business and results of operations.”
New heading “Wage escalations and other cost-of-living adjustments under Rex's Enterprise Agreements could increase Rex's operating costs, and Rex may not be able to fully offset those increases through pricing or other measures.”
Largest changes
“A significant portion of Rex’s owned Saab 340 fleet was out of service at the time of the Acquisition pending heavy maintenance and engine overhauls, and Rex’s operating plan depends on returning aircraft to service on an anticipated schedule. …”see in full comparison
“We incurred and assumed significant obligations in connection with the Rex Acquisition, including obligations related to CFA Debt, and we may require additional liquidity to support Rex’s operations.”see in full comparison
“Rex’s operations are subject to extensive regulation and oversight, including requirements relating to safety, maintenance, training, operational performance, and consumer and other regulatory compliance. Compliance failures, safety incidents, adverse regulatory findings, operational restrictions, reputational harm, or other disruptions could result in fines, penalties, increased costs, reduced demand, and limitations on Rex’s operations, any of which could materially adversely affect our business and results of operations.”see in full comparison
“Rex’s ability to return its Saab 340 fleet to service depends on the availability of engine overhaul capacity, parts, and skilled labor, and failure to achieve fleet reactivation milestones could result in non-compliance with the Rex Regional Commitments and adverse consequences under the Commonwealth Facilities.”see in full comparison
“A substantial portion of Rex's workforce is represented by labor unions under Enterprise Agreements, and labor disputes, work stoppages, or unsuccessful negotiations of replacement agreements could disrupt Rex's operations and adversely affect our business and results of operations.”see in full comparison
“Rex operates in a highly regulated industry, and failure to comply with applicable laws and regulations could materially adversely affect our business.”see in full comparison
Full comparison: every changed paragraph (85)
•We are exposed to foreign exchange rate fluctuations and, through our international operations, we may suffer losses as a result of adverse fluctuations in foreign currency exchange rates.
Risks Related to Rex
•We may not be able to successfully integrate Rex into our operations, including our financial reporting processes, which could adversely affect our business, results of operations, and financial condition.
•Rex operates in a highly regulated industry, and failure to comply with applicable laws and regulations could materially adversely affect our business.
•Rex’s ability to return its Saab 340 fleet to service depends on the availability of engine overhaul capacity, parts, and skilled labor, and failure to achieve fleet reactivation milestones could result in non-compliance with the Rex Regional Commitments and adverse consequences under the Commonwealth Facilities.
•Rex derives an important portion of its revenues and network position from state government regulated route contracts and protected airport slots that are subject to periodic re-tender, renewal, or expiration, and the loss of these arrangements could adversely affect Rex’s business.
•The Rex Acquisition involves risks related to voluntary administration proceedings in Australia and the DOCA structure, including uncertainties regarding liabilities, claims, obligations, and potential adverse impacts on customer and counterparty acceptance of Rex’s business following the proceedings.
•The recognition of a bargain purchase gain could increase scrutiny by investors and regulators, and could lead to disputes regarding valuations and assumptions.
•A significant portion of Rex’s revenues, expenses, assets, and liabilities may be denominated in Australian dollars, and fluctuations in exchange rates could adversely affect our reported results.
•We incurred and assumed significant obligations in connection with the Rex Acquisition, including obligations related to the Commonwealth Facility Agreement ("CFA") debt (the "CFA Debt"), and we may require additional liquidity to support Rex’s operations.
•Rex’s operating costs and revenues may be subject to volatility, and Rex may not be able to offset cost increases or revenue decreases through pricing or other measures.
•A substantial portion of Rex’s workforce is represented by labor unions under Enterprise Agreements, and labor disputes, work stoppages, or unsuccessful negotiations of replacement agreements could disrupt Rex’s operations and adversely affect our business and results of operations.
•Wage escalations and other cost-of-living adjustments under Rex’s Enterprise Agreements could increase Rex’s operating costs, and Rex may not be able to fully offset those increases through pricing or other measures.
Global cybersecurity threats can range from uncoordinated individual attempts to gain unauthorized access to our information systems and computer technology to sophisticated and targeted measures known as advanced persistent threats and ransomware. The techniques used in these attacks change frequently and may be difficult to detect for periods of time and we may face difficulties in anticipating and implementing adequate preventative measures. A failure or breach in security could expose our company as well as our customers and suppliers to risks of misuse of information, compromising confidential information and technology, destruction of data, production disruptions, ransom payments, and other business risks which could damage our reputation, competitive position and financial results of our operations. Further, our technology resources may be strained due to an increase in the number of remote users. In addition, defending ourselves against these threats may increase costs or slow operational efficiencies of our business. If any of the foregoing were to occur, it could have a material adverse effect on our business and results of operations.operations and financial condition.
We sustained a cybersecurity attack in May 2022 involving ransomware that caused a network disruption and impacted certain of our systems. Upon detection, we undertook steps to address the incident, including engaging a team of third-party forensic experts and notifying law enforcement. We restored network systems and resumed normal operations. We have taken actions to improve our existing systems such as adding multi-factor authentication and to improve employee training and security competency. While we do not believe this event or resultant actions had or will have a material adverse effect on our business, this or similar incidents, or any other such breach of our data security infrastructure could have a material adverse effect on our business, results of operations and financial condition.
The United StatesU.S. has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the United StatesU.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly impact the cost of our products and services, and other parts and supplies sourced internationally or impact the cost of service providers located outside of the United States,U.S., which in turn could negatively impact us.
Nick Swenson, our President, Chief Executive Officer and Chairman of the Board, beneficially owns an aggregate of 1,352,938 shares of our Common Stock, which represents approximately 50.06% of the voting power of our outstanding Common Stock. Since ourOur President, CEO/Chairman owns a majority of the voting power for the election of our directors, and thus we dowould meet the definition of a “controlled company.” As a result, these requirements would not apply to us as long as we remain a “controlled company.”
WeAlthough we qualify as a “controlled company,” we currently do not, and we do not expect to, rely on this exemption and we currently comply with, and we expect to continue to comply with, all relevant corporate governance requirements under the Nasdaq listing standards. However, if we were to utilize some or all of these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq listing standards that relate to corporate governance.
These risks may reduce our operating segment’s results including particularly our commercial aircraft, engines and parts segment. These risks may reduce the commercial aircraft, engines and parts segment’s engine utilization rates, lease margins, maintenance reserve revenues and proceeds from engine sales, and result in higher legal, technical, maintenance, storage and insurance costs related to repossession and the cost of engines being off-lease. As a result of the foregoing and other factors, the availability of engines for lease or sale periodically experiences cycles of oversupply and undersupply of given engine models and generally.models. The incidence of an oversupply of engines may produce substantial decreases in engine lease rates and the appraised and resale value of engines and may increase the time and costs incurred to lease or sell engines. We anticipate that supply fluctuations from period to period will continue in the future. As a result, comparisons to results from preceding periods may not be meaningful and results of prior periods should not be relied upon as an indication of our future performance.
Our dry-lease agreements with FedEx provide for the lease of specified aircraft by us in return for the payment of monthly rent with respect to each aircraft leased. The dry-lease agreements provide for the reimbursement by FedEx of our costs, without mark up,markup, incurred in connection with the operation of the leased aircraft for the following: fuel, landing fees, third-party maintenance, parts and certain other direct operating costs. Under the dry-lease agreements, certain operational costs incurred by us in operating the aircraft are not reimbursed by FedEx at cost, and such operational costs are borne solely by us. An increase in unreimbursed operational costs would negatively affect our results of operations.
We derive a significant portion of our revenue from business with FedEx. Accordingly, adverse developments affecting FedEx or its transportation network could adversely affect our business, results of operations, financial condition and cash flows. FedEx’s periodic reports filed with the SEC, including its Annual Report on Form 10-K for the fiscal year ended May 31, 2025 and subsequent Quarterly Reports on Form 10-Q, describe risks relating to macroeconomic and geopolitical conditions, trade policies, fuel prices and availability, network and technology disruptions, labor and transportation regulation, competition, and weather or other disruptions affecting transportation infrastructure. If any of those risks adversely affect FedEx, our business with FedEx may also be adversely affected.
Because of our dependence on FedEx, we are subject to the risks that may affect FedEx’s operations. These risks are discussed in FedEx’s periodic reports filed with the SEC including its Annual Report on Form 10-K for the fiscal year ended May 31, 2024. These risks include but are not limited to the following:
•Global economic and geopolitical conditions and developments in the markets in which it operates;
•Additional changes in international trade policies and relations could significantly reduce the volume of goods transported globally and adversely affect its business and result of operations;
•Its transportation businesses are affected by the price and availability of jet and vehicle fuel;
•Its ability to successfully implement its business strategy and transformation program
•A significant data breach or other disruption to its technology infrastructure could disrupt its operations and result in the loss of critical sensitive or confidential information;
•Failure to adjust its air network to remove costs related to services currently provided to the USPS could adversely affect our profitability;
•Insurance and claims expenses could have material adverse effect on it;
•The effects of any international conflicts or terrorist activities on the transportation infrastructure;
•The failure of third-party service providers to perform as expected, or disruptions in relationships with those providers or their provision of services to FedEx;
•The effects of a widespread outbreak of an illness or any other communicable disease or public health crisis;
•Failure to successfully implement its business strategy and effectively respond to changes in market dynamics and customer preferences;
•Its ongoing assessment of the role of FedEx Freight in its portfolio structure may not result in any consummated transaction or other outcome;
•It depends on the strong reputation and the value of the FedEx brand;
•The effect of intense competition;
•Its businesses are capital intensive, and it must make capital decisions based upon projected volume levels;
•Its ability to execute and effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions, joint ventures, and strategic alliances and investments;
•Labor-related disruptions and potential changes in labor laws;
•Its ability to attract and retain employee talent, meet its purchased transportation needs, or maintain its company culture, as well as increases in labor and purchased transportation costs;
•Challenges to the status of service providers providing certain linehaul and pickup-and-delivery operations as direct and exclusive employers of drivers providing these services is being challenged;
•Potential changes to pilot flight and duty time regulations could impair its operations and impose substantial costs;
•Increasing costs, the volatility of costs and funding requirements, and other legal mandates for employee benefits, especially pension and healthcare benefits;
•It could be affected by global climate change or by legal, regulatory, or market responses to such change;
•It may be unable to achieve or demonstrate progress on our goal of carbon neutrality for global operations by calendar 2040;
•Its inability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography;
•Government regulation and enforcement are evolving and unfavorable changes could harm its business;
•It could be subject to adverse changes in regulations and interpretations or challenges to its tax positions;
•The regulatory environment for global aviation or other transportation rights may affect its operations and increase operating costs; and,
•Its business is subject to complex and evolving U.S. and foreign laws and regulations regarding data protection.
Any of these events may adversely affect the value of the engine, unless and until remedied, and reduce our revenues and increase our expenses. If an engine is damaged during a lease and we are unable to recover from the lessee or thoughthrough insurance, we may incur a loss.
Export/import regulations. The U.S. Department of Commerce (the “Commerce Department”) regulates exports. We are subject to the Commerce Department’s and the U.S. Department of State’s regulations with respect to the lease and sale of engines and aircraft to foreign entities and the export of related parts. These Departments may, in some cases, require us to obtain export licenses for engines exported to foreign countries. The U.S. Department of Homeland Security, through the U.S. Customs and Border Protection, enforces regulations related to the import of engines and aircraft into the United StatesU.S. for maintenance or lease and imports of parts for installation on our engines and aircraft.
Our legal rights and the relative difficulty of repossession vary significantly depending on the jurisdiction in which an aircraft or engines are located. We may need to obtain a court order or consents for de-registration or re-export, a process that can differ substantially from countycountry to country. When a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may also apply. For example, certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease, to assign it to a third party, or to entitle the lessee or another third party to retain possession of the aircraft or engines without paying lease rentals or performing all or some of the obligations under the relevant lease. Certain of our lessees may be partially or wholly-owned by government-related entities, which can further complicate our efforts to repossess our aircraft or engines in that government’s jurisdiction. If we encounter any of these difficulties, we may be delayed in, or prevented from, enforcing certain of our rights under a lease and in re-leasing the affected aircraft or engines.
In the normal course of their businesses, our lessees are likely to incur aircraft and engine liens that secure the payment of airport fees and taxes, custom duties, Eurocontrol and other air navigation charges, landing charges, crew wages, and other liens that may attach to our aircraft. Aircraft may also be subject to mechanic’s liens as a result of routine maintenance performed by third parties on behalf of our customers. Some of these liens can secure substantial sums, and if they attach to entire fleets of aircraft, as permitted for certain kinds of liens, they may exceed the value of the aircraft itself. Although the financial obligations relating to these liens are the contractual responsibility of our lessees, if they fail to fulfill their obligations, the liens may ultimately become our financial responsibility. Until they are discharged, these liens could impair our ability to repossess, re-lease or sell our aircraft or engines. In some jurisdictions, aircraft and engine liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the aircraft. If we are obliged to pay a large amount to discharge a lien, or if we are unable to take possession of our aircraft subject to a lien in a timely and cost-effective manner, it could materially and adversely affect our financial results.
We are subject to governmental regulation and our failure to comply with these regulations could cause the government to withdraw or revoke our authorizations and approvals to do business and could subject us to penalties and sanctions that could harm our business. Governmental agencies throughout the world, including the FAA, highly regulate the manufacture, repair and operation of aircraft operated in the United StatesU.S. and equivalent regulatory agencies in other countries, such as the EASA in Europe, regulate aircraft operated in those countries. With the aircraft, engines and related parts that we purchase, lease and sell to our customers, we include documentation certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries. Specific regulations vary from country to country, although regulatory requirements in other countries are generally satisfied by compliance with FAA requirements. With respect to a particular engine or engine component, we utilize FAA and/or EASA certified repair stations to repair and certify engines and components to ensure marketability. The revocation or suspension of any of our material authorizations or approvals would have an adverse effect on our business, financial condition and results of operations. New and more stringent government regulations, if enacted, could have an adverse effect on our business, financial condition and results of operations. In addition, certain product sales to foreign countries require approval or licensing from the U.S. government. Denial of export licenses could reduce our sales to those countries and could have a material adverse effect on our business.
The Company has theCompany's option to extend the interest payment period could delay interest payments on the Trust Preferred Securities.
A “Tax Event” means the receipt by the Company and Air T Funding of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United StatesU.S. or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such pronouncement or decision is announced on or after the original issuance of the Trust Preferred Securities, there is more than an insubstantial risk that (i) Air T Funding is, or will be within 90 days of the date of such opinion, subject to United StatesU.S. federal income tax with respect to income received or accrued on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures is not, or within 90 days of such opinion, will not be, deductible by the Company, in whole or in part, for United StatesU.S. federal income tax purposes, or (iii) Air T Funding is, or will be within 90 days of the date of the opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges.
Risks Related to Rex
We may not be able to successfully integrate Rex into our operations, including our financial reporting processes, which could adversely affect our business, results of operations, and financial condition.
During the quarter ended December 31, 2025, Air T Rex completed the Acquisition of Rex. Integrating Rex into the Company involves substantial risks, including, among others: integrating financial reporting processes, policies, and internal controls; implementing consistent accounting policies and reporting timelines; integrating information technology systems; retaining key personnel; and coordinating governance, compliance, and risk management across jurisdictions. Integration activities are complex and may require significant management attention and additional costs. If we are unable to integrate Rex effectively or within anticipated timeframes, our results of operations, cash flows, and ability to timely produce accurate financial statements could be adversely affected.
Management's Discussion & Analysis (MD&A)
New heading “Operating Revenue”
New heading “Operating Income (Loss)”
New heading “Corporate and Other”
New heading “Adjusted EBITDA”
New heading “Non-Operating Income (Expense)”
Largest changes
“As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Report on Form 10-K, on November 24, 2025, the Company's wholly-owned subsidiary ATA 22.1 entered into a $6.0 million term loan with Alerus. The loan proceeds were used to repay amounts due on the $3.5 million term loan from Bridgewater Bank. The new term loan is due on or before November 24, 2032 and has an interest rate of the greater of 5.00% or 1-month SOFR plus 1.90%. …”see in full comparison
“The Multiple Advance Note bears annual interest at a rate of 8.5% which is computed on the basis of a 30/360-day year and actual days elapsed and is payable semi-annually in arrears, pursuant to the terms of the Multiple Advance Note. The maturity date of the Multiple Advance Note is May 31, 2035. …”see in full comparison
“As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Report on Form 10-K, on December 15, 2025, the Company and its wholly-owned subsidiary Air T Acquisition 25.1, LLC ("ATA 25.1"), entered into a Note Purchase Agreement (the “Agreement”) with two Institutional Investors (the "Investors"), which Investors had previously entered into the Third Note Purchase Agreement with the Company. …”see in full comparison
“As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Report on Form 10-K, on November 24, 2025, Contrail entered into a Master Loan Agreement and Supplement No. 1 to Master Loan Agreement (collectively the “Master Loan Agreement”) with Alerus. The agreement provides for a $15.0 million revolving loan facility that is evidenced by a Promissory Note Revolving Note dated November 24, 2025 in the principal amount of $15.0 million. The funds are to be used for the purchases of engines and working capital needs. …”see in full comparison
“As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Report on Form 10-K, in December 2025, Rex and the Commonwealth entered into (i) an amendment and restatement of the Commonwealth Facility Agreement originally dated November 11, 2024 (the “Commonwealth Term Loan”), and (ii) a new facility agreement (the “New Facility Agreement” and, together with the Commonwealth Term Loan, the “Commonwealth Facilities”). …”see in full comparison
“As mentioned in Note 12 of Notes to Consolidated Financial Statements included under Part II, Item 8, on February 21, 2025, MAC entered into a $2.3 million term loan with Bank of America, N.A ("BofA"). The term loan requires monthly interest payments commencing March 21, 2025 until payment in full on the February 21, 2030 maturity date. The loan also requires principal payments in equal monthly installments of $9,500 and MAC may prepay the loan at any time in full or in part without penalty. The loan bears a variable monthly interest rate at the 1-month SOFR Rate plus 1.75% plus 0.11%. …”see in full comparison
Full comparison: every changed paragraph (146)
We currently operate in fourfive industry segments:
•Commercial aircraft, engines and parts, which manages and leases aviation assets; supplies surplus and aftermarket commercial jet engine components; provides commercial aircraft disassembly/part-out services; commercial aircraft parts sales; procurement services and overhaul and repair services to airlines and;
•Digital solutions, which develops and provides digital aviation and other business services to customers within the aviation industry to generate recurring subscription revenues; and
•Regional airline, which provides scheduled regional passenger, freight and charter airline services and pilot training in Australia, operating a fleet of Saab 340 aircraft serving regional communities and connecting passengers to major metropolitan centers.
On December 18, 2025, the Company introduced a new reportable segment, regional airline. This new segment includes all reportable activities of the Company's most recent acquisition, Regional Express Holdings Pty Ltd ("Rex"), as discussed in Note 2.
Effective as of the fourth quarter of fiscal year 2025, we renamed our ground equipment sales segment to ground support equipment and renamed our commercial jet engines and parts segment to commercial aircraft, engines and parts to better align the descriptions of the segments with their activities.
Additionally, we have elected to separately disclose the digital solutions segment to better align our financial statement presentation with a key long-term growth area for the Company. Digital solutions was previously classified as part of insignificant business activities. As a result of this change, prior period segment information has been recast to conform to our current presentation in our financial statements and related notes included Item 8 of this report.
Each reportablebusiness segment has separate management teams and infrastructures that offer different products and services. We evaluate the performance of our reportablebusiness segments based on operating income (loss) and Adjusted EBITDA.
Recent Events
On December 18, 2025, the Company, through its indirect wholly owned subsidiary Air T Rex Acquisition, Inc., completed the Acquisition of all of the outstanding capital stock of Rex. The Acquisition was completed pursuant to a share purchase agreement in the context of Rex’s voluntary administration proceedings in Australia, which commenced on July 30, 2024, and the related Deed of Company Arrangement ("DOCA") process. The Acquisition represents a significant transaction for the Company and is expected to meaningfully affect the Company’s business, including expanding the Company’s operating footprint into Australia and adding a regulated regional airline operation to the Company’s portfolio. The Company expects that integrating Rex will require significant management attention and the coordination of operational oversight, safety and regulatory compliance, governance, and financial reporting processes and controls across jurisdictions, and may involve additional costs and complexity.
Rex’s results of operations have been included in the Company’s consolidated financial statements only for the period from December 18, 2025 through March 31, 2026. As a result, the Company’s operating results for the year ending March 31, 2026 reflect only a short stub period of Rex operations and do not reflect the full-period impact of the Acquisition on the Company’s operating results, cash flows, or financial condition, and period-to-period comparisons may not be indicative of the ongoing operating results of Rex or the combined Company in future periods.
The Company recognized a $111.2 million non-cash bargain purchase gain in fiscal 2026 based on the current purchase price allocation for the Rex Acquisition on December 18, 2025. The gain reflects the excess of the acquisition-date fair value of the net assets acquired over the consideration transferred and is subject to change over the measurement period. The bargain purchase gain does not represent cash generated by Rex or operating income from Rex’s business. See “Non-Operating Income (Expense)” below and Note 2 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
Unconsolidated InvestmentsInvestments.
The Company has an ownership interest in Crestone Asset Management, LLC.LLC, formerly known as Contrail Asset Management LLC, an aircraft capital joint venture called Crestone JV II LLC, formerly known as Contrail JV II LLC, Blue Crest Aviation Partners 2025-01 ("BCAP"), Bloomia Holdings, Inc. - NASDAQ: TULP ("Bloomia"), formerly known as Lendway, Inc. ("Lendway"), Cadillac Casting, Inc. ("CCI") and other smaller entities. The operations of CAMthese companies are not consolidated into the operations of the Company. See Note 9 and Note 2110 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
CAM is a full-service aviation asset manager that invests in aircraft and engines on behalf of its capital partners, with a focus on current generation narrow-body aircraft approaching the end of their working lives. CAM draws on the expertise and capabilities of interrelated aviation specialists across Air T. CJVII is the investment fund that sits alongside CAM through which CAM acquires aircraft on behalf of its investors.
BCAP launched in August 2025 as a joint venture to acquire mid-life commercial jet aircraft in lease back transactions with airlines around the world. BCAP leverages Air T's wider network of aviation services through CAM as the asset manager.
Bloomia is one of the largest producers of fresh-cut tulips in the United States, growing over 75 million stems annually for wholesale to retail stores.
CCI is an industry leader in ductile iron castings and major high-volume supplier of engineered cast metal components, primarily serving major automakers. The company makes products such as engine exhaust manifolds, steering knuckles, and other cast components, primarily for the auto industry. As a full-service foundry, its work spans from initial design and prototyping all the way through the full product lifecycle.
The Company also has ownership interests in Lendway and CCI. The operations of these companies are not consolidated into the operations of the Company. See Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
The Company additionally has ownership interests in other smaller entities that are not consolidated into the operations of the Company and included in the disclosure in Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
•The risk that the number of aircraft operated for FedEx will beis reduced;
•The impact of any terrorist activities or armed conflict on United StatesU.S. soil or abroad;
•The risk that we may not successfully integrate Rex (including financial reporting, systems, and personnel), which could adversely affect our results and reporting;
•The risk that Rex’s revenues and operating costs may be volatile or unpredictable and that we may be unable to offset cost increases or revenue decreases through pricing, surcharges, cost reductions, or other measures, which could adversely affect our results;
•The risk that Rex may be unable to return aircraft to service on anticipated timelines, to retain regulated route contracts and protected airport slots, or to maintain compliance with the Rex Regional Commitments under the Commonwealth Facilities;
•The risk that the bargain purchase gain recognized in connection with the Rex acquisition may increase scrutiny by investors, regulators, creditors, or other parties regarding the valuation assumptions and accounting judgments used in determining the purchase price allocation and bargain purchase gain;
•The risk that Rex’s operations are subject to extensive regulation and oversight and that compliance failures or adverse regulatory actions could materially harm our business and results;
•The risk that the Rex transaction structure, including the Australian DOCA/administration process, could result in unexpected liabilities, claims, or delays that could materially harm our results and liquidity;
We also wish to caution investors that other factors might in the future prove to be important in affecting our results of operations. New factors emerge from time to time. It is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. We are underundertake no obligation, and we expressly disclaim any obligation,obligation to update publicly or alterrevise any forward-looking statements, whether as a result of new information, future events or otherwise.
Operating Revenue
Consolidated revenue increased by $35.2 million (12%) to $327.1 million for the fiscal year ended March 31, 2026 compared to the prior fiscal year. Growth was driven by the inclusion of approximately one quarter of operations of Rex following its acquisition on December 18, 2025, strong demand in ground support equipment, and gains across overnight air cargo and digital solutions, partially offset by a decline in our commercial aircraft, engines and parts segment revenue, reflecting the adjustment of Contrail's trading activity from an elevated prior-year baseline.
Consolidated revenue increased by $5.0 million (2%) to $291.9 million for the fiscal year ended March 31, 2025 compared to the prior fiscal year. Following is a table detailing revenue for the Company's four segments and Corporate and other (after elimination of intercompany transactions), in thousands:
Revenues from the overnight air cargo segment increased by $8.5 million (7%) compared to the prior fiscal year, principally attributable to higher labor revenues, increase in admin fees and higher FedEx pass through revenues due to higher billable hours for maintenance. Pass-through costs under the dry-lease agreements with FedEx totaled $39.9 million and $36.4 million for the years ended March 31, 2025 and 2024, respectively.
The ground support equipment segment contributed approximately $38.9 million and $37.2 million to the Company’s revenues for the fiscal years ended March 31, 2025 and 2024, respectively, representing a $1.7 million (5%) increase in the current fiscal year. The increase was primarily driven by an increase in spare part sales and support services provided to customers while deicer sales increased slightly. At March 31, 2025, the ground support equipment segment’s order backlog was $14.3 million compared to $12.6 million at March 31, 2024.
The commercial aircraft, engines and parts segment contributed $118.2 million of revenues in fiscal year ended March 31, 2025 compared to $125.5 million in the prior fiscal year which is a decrease of $7.3 million (6%). The decrease was primarily driven by a lower supply of whole assets available to purchase for tear-down or resale in an increasingly competitive market, further exacerbated by aircraft operators keeping older aircraft in operation for longer than they have in the past.
The digital solutions segment contributed $7.3 million of revenues in the fiscal year ended March 31, 2025 compared to $5.8 million in the prior fiscal year which is an increase of $1.5 million (26%). The increase is primarily due to increased software subscriptions driven by continued acquisition of new and recurring customers.
FollowingThe is afollowing table detailingdetails operating income (loss)revenue for theour Company'sfive foursegments, segments and Corporate and other, netgross of intercompany during Fiscal 2025 and Fiscal 2024 (in thousands):
Consolidated operating income for the fiscal year ended March 31, 2025 was $1.9 million compared to consolidated operating income of $1.3 million in the prior fiscal year.
Operating income for the overnight air cargo segment decreased by $0.5 million in the current fiscal year, due primarily to increased loss provisioning for bad debt and additional taxes related to conducting business in Puerto Rico.
Operating loss for the ground support equipment segment was $1.2 million compared to operating loss of $1.6 million in the prior fiscal year. The decrease in operating loss was primarily attributable to reduced headcount, partially offset by increased warranty expense in the current year.
Operating income of the commercial aircraft, engines and parts segment was $7.1 million compared to operating income of $4.2 million in the prior year. The increase was primarily attributable to increased sales of component packages with a higher gross profit, which offset the decrease in revenue noted above.
Operating loss for the digital solutions segment increased by $0.4 million year over year, attributable to increased personnel needed to continue to scale operations.
The table below provides Adjusted EBITDA for the Company's four segments and Corporate and other for the fiscal year ended March 31, 2025 and 2024 (in thousands):
ConsolidatedRevenues Adjustedfrom EBITDAthe overnight air cargo segment for the fiscal year ended March 31, 20252026 wasincreased $7.4by million, an increase of $1.2$3.8 million (3%) compared to the prior fiscal year.
The increase was driven by WASI and Royal. Royal was a new acquisition in May 2025, driving an additional $1.5 million in revenue with no prior-year comparable. WASI experienced an increase in revenue of $2.8 million, driven by increases in labor revenue from expanded third-party maintenance activity and project-based revenue. Revenues at MAC and CSA remained relatively consistent with the prior year.
The commercial aircraft, engines and parts segment contributed $89.9 million of revenues in the fiscal year ended March 31, 2026 compared to $119.4 million in the prior fiscal year, which is a decrease of $29.5 million (25%).
The decrease was largely attributable to a $38.8 million decrease in component sales at Contrail. The prior year reflected an elevated level of trading activity not expected to recur at that level in the foreseeable future.
The decrease in revenue at Contrail was partially offset by activity at the other companies in this segment. Most notably, Worthington increased by $7.8 million, or 23%, to $41.0 million, reflecting MRO volume growth and expansion in Australia. Revenue at LGSS increased by $1.2 million, or 36%, to $4.6 million, driven by a brokered landing gear sale and incremental lease revenue. Jet Yard Companies won new major projects and additional off-site teardown projects.
The ground support equipment segment contributed approximately $47.2 million and $38.9 million to the Company’s revenues for the fiscal years ended March 31, 2026 and 2025, respectively, representing an $8.2 million (21%) increase in the current fiscal year. Revenue growth reflected new and expanded deicing contracts and catering equipment sales. These increases were partially offset by lower overhaul revenue.
At March 31, 2026, the ground support equipment segment’s order backlog was $0.6 million compared to $14.3 million at March 31, 2025, driven by the timing of the annual USAF, which was placed in May 2026 of the current fiscal year.
The digital solutions segment contributed $9.1 million of revenues in the fiscal year ended March 31, 2026 compared to $7.3 million in the prior fiscal year, an increase of $1.8 million (25%).
Revenue at WorldACD increased $1.8 million, or 29%, to $8.2 million, reflecting growth in data analytics and airspace management engagements.
Revenue at Ambry Hill Technology, LLC remained flat at $0.9 million with annual recurring revenue at $1.1 million at March 31, 2026.
Regional airline revenues were $55.3 million, representing the contribution of Rex for the period from its acquisition date of December 18, 2025 through March 31, 2026. There is no prior-year comparable. Revenue consisted of passenger revenue, ancillary fees, freight and charter, and government subsidy income.
Operating Income (Loss)
Consolidated segment operating results decreased by $13.1 million from $1.9 million of income in the prior fiscal year to a loss of $11.2 million for the year ended fiscal year ended March 31, 2026. The decline was driven principally by the initial consolidation of Rex, which contributed an operating loss of $14.2 million for the period from December 18, 2025 through March 31, 2026, and a $4.0 million increase in Corporate and Other operating losses. These were partially offset by a $5.3 million increase in GGS operating income and an increase of $1.6 million in operating income at WASI.
Adjusted EBITDA for the overnight air cargo segment decreased by $0.3 million in the current fiscal year, due primarily to lower segment operating income as described above.
Adjusted EBITDA loss for the ground support equipment segment decreased by $0.2 million in the current fiscal year, primarily due to higher sales as described above.
Adjusted EBITDA of the commercial aircraft, engines and parts segment was $9.8 million, an increase of $3.7 million from the prior fiscal year. The increase was primarily driven by higher profit margins on sales as described above.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Adjusted EBITDA”
New heading “Non-operating (Expense) Income”
Removed heading “Operating Expenses”
Removed heading “General and administrative”
Removed heading “Operating Revenue”
Removed heading “Operating Expenses”
Removed heading “General and Administrative”
Removed heading “Non-Operating Income (Expense)”
Removed heading “Provision for Income Taxes”
Largest changes
“As mentioned in Note 13 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, On November 24, 2025, ATA 22.1 entered into a $6.0 million term loan with Alerus. The loan proceeds were used to repay amounts due on the $3.5 million term loan from Bridgewater Bank. The new term loan is due on or before November 24, 2032 and has an interest rate of the greater of 5.00% or 1-month SOFR plus 1.90%. …”see in full comparison
“As mentioned in Note 13 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, On December 15, 2025, the Company and its wholly-owned subsidiary ATA 25.1, entered into a Note Purchase Agreement (the “Agreement”) with two Institutional Investors (the "Investors"). Pursuant to the Agreement, ATA 25.1 issued to the Investors a 11.5% Senior Secured Note due December 15, 2031 in the aggregate principal amount of $40.0 million (the “Investor Note”). …”see in full comparison
“As mentioned in Note 13 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, On November 24, 2025, Contrail entered into a Master Loan Agreement and Supplement No. 1 to Master Loan Agreement (collectively the “Master Loan Agreement”) with Alerus. The agreement provides for a $15.0 million revolving loan facility that is evidenced by a Promissory Note Revolving Note dated November 24, 2025 in the principal amount of $15.0 million. The funds are to be used for the purchases of engines and working capital needs. …”see in full comparison
“As mentioned in Note 13 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, on December 17, 2025, Rex and the Commonwealth entered into (i) an amendment and restatement of the Commonwealth Facility Agreement originally dated November 11, 2024 (the “Perpetual Facility Agreement”), and (ii) a new facility agreement (the “New Facility Agreement” and, together with the Perpetual Facility Agreement, the “Commonwealth Facilities”). …”see in full comparison
“The New Facility Agreement bears interest at 12.0% per annum (which rate shall increase by 2.00% per annum if the Rex Companies fail to maintain compliance with certain “Rex Regional Commitments” regarding flight service levels and route profitability). The interest rate applicable to the New Facility Agreement is subject to adjustment from time to time in accordance with the Intercreditor Deed to match the interest rate applicable to the New Cap Note Facility. …”see in full comparison
“As mentioned in Note 13 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, on September 3, 2025, the Alerus Loan Parties under the Revolving Credit Agreement with Alerus entered into Amendment No. 5 to Credit Agreement, the Amended and Restated Revolving Credit Note, and the Amended and Restated Term Note A. Pursuant to Amendment No. 5 to Credit Agreement, the Overline Note provisions and note were eliminated. …”see in full comparison
Full comparison: every changed paragraph (129)
This section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations" (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The MD&A provides a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition during the period from the most recent fiscal year-end, March 31, 2025,2026, to and including DecemberJune 31,30, 20252026 and (ii) results of operations during the current fiscalquarterly period(s) as compared to the corresponding period(s) of the preceding fiscal year.
•The risk that the number of aircraft operated for FedEx iswill be reduced;
•The risk that Global Ground Support ("GGS") customers will defer or reduce significant orders for deicing equipment;
•The risk that we may not successfully integrate Regional Express Holdings Pty Ltd ("Rex") (including financial reporting, systems, and personnel), which could adversely affect our results and reporting;
•The risk that Rex may be unable to return aircraft to service on anticipated timelines, to retain regulated route contracts and protected airport slots, or to maintain compliance with the Rex Regional Commitments under the Commonwealth Facilities;
•The risk that the bargain purchase gain recognized in connection with the Rex acquisition may increase scrutiny by investors, regulators, creditors, or other parties regarding the valuation assumptions and accounting judgments used in determining the purchase price allocation and bargain purchase gain;
•The risk that the preliminary purchase price allocation for the Rex acquisition, including the determination and measurement of any bargain purchase gain and related tax treatment, may be revised as valuations and other inputs are finalized during the measurement period, which revisions could materially change our reported results of operations and financial position from period to period;
We also wish to caution investors that other factors might in the future prove to be important in affecting our results of operations. New factors emerge from time to time.time; Itit is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 1 of Part 1 of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended March 31, 20252026 (including the information presented therein under Risk Factors), as well as other publicly available information.
We currently operate in foursix core industry segments:
•Regional airline, which provides scheduled regional passenger, freight and charter airline services and pilot training in Australia, operating a fleet of Saab 340 aircraft serving regional communities and connecting passengers to major metropolitan centers;
•Ground support equipment (formerly known as Ground equipment sales), which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers;
•Commercial aircraft, engines and parts (formerly known as Commercialcommercial jet engines and parts), which manages and leases aviation assets; supplies surplus and after marketaftermarket commercial jet engine components; provides commercial aircraft disassembly/part-out services; commercial aircraft parts sales; procurement services and overhaul and repair services to airlines and;
•Ground support equipment, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers;
•Digital solutions, which develops and provides digital aviation and other business services to customers within the aviation industry to generate recurring subscription revenues.revenues; and
•Aviation leasing and asset management, which originates and structures asset acquisitions and related financings and provides lease administration, technical and risk management, and remarketing services for aircraft and engines on lease to airline customers globally.
•Regional airline, which provides scheduled regional passenger and cargo airline services in Australia, operating a fleet of aircraft serving regional communities and connecting passengers to major metropolitan centers.
Effective as of the third quarter of fiscal year 2026, the Company introduced a new reportable segment named, "Regional Airline". This new segment includes all reportable activity as it relates to the company's acquisition of Rex, as discussed in Note 2.
Effective as of the fourth quarter of fiscal year 2025, we renamed our ground equipment sales segment to ground support equipment and renamed our commercial jet engines and parts segment to commercial aircraft, engines and parts to better align the descriptions of the segments with their activities.
Additionally, we elected to separately disclose the digital solutions segment to better align our financial statement presentation with a key anticipated long-term growth area for the Company. Digital solutions was previously classified as part of insignificant business activities. As a result of this change, prior period segment information has been recast to conform to our current presentation in our financial statements and related notes.
Recent Events
On December 18, 2025, the Company, through Air T Rex, LLC, completed the Acquisition of substantially all of the assets and operations of Rex. The Acquisition was completed pursuant to an asset purchase agreement in the context of Rex’s voluntary administration proceedings in Australia, which commenced on July 30, 2024, and the related DOCA process. The Acquisition represents a significant transaction for the Company and is expected to meaningfully affect the Company’s business, including expanding the Company’s operating footprint into Australia and adding a regulated regional airline operation to the Company’s portfolio. The Company expects that integrating Rex will require significant management attention and the coordination of operational oversight, safety and regulatory compliance, governance, and financial reporting processes and controls across jurisdictions, and may involve additional costs and complexity.
Because the Acquisition closed on December 18, 2025, Rex’s results of operations have been included in the Company’s consolidated financial statements only for the period from December 18, 2025 through December 31, 2025. As a result, the Company’s operating results for the quarter ended December 31, 2025 reflect only a short stub period of Rex operations and do not reflect the full-period impact of the Acquisition on the Company’s operating results, cash flows, or financial condition, and period-to-period comparisons may not be indicative of the ongoing operating results of Rex or the combined company in future periods.
First Quarter Fiscal 2027 Compared to First Quarter Fiscal 2026
Third Quarter Fiscal 2026 Compared to Third Quarter Fiscal 2025
ConsolidatedReportable segment revenue for the three-month period ended DecemberJune 31,30, 20252026 decreasedincreased by $6.7$44.6 million (8.7%63%) compared to the same quarter in the prior fiscal year.
Following is a table detailing revenue by segment,revenue, net of intercompany eliminations during the three months ended DecemberJune 31,30, 20252026 compared to the same quarter in the prior fiscal year (in thousands):
Regional airline revenues for the three-month period ended June 30, 2026 were $55.9 million, representing a full quarter of Rex operations, which was acquired on December 18, 2025. There is no prior-year comparable. Revenue consisted of passenger revenue, ancillary fees, freight and charter, and government subsidy income.
Revenues at MAC and CSA for the three-month period ended June 30, 2026 were relatively flat compared to the first quarter of the prior fiscal year, while WASI grew revenue approximately 14%, to $3.2 million on higher third-party parts and labor revenue, and Royal (acquired May 15, 2025, and therefore lacking a full prior-year comparable quarter) contributed incremental revenue.
Contrail reported lower revenues for the three-month period ended June 30, 2026 as its leasing revenue fell from $1.8 million to less than $0.1 million, a decline attributable to two aircraft previously on lease that were sold in July 2025 and therefore contributed lease income in the prior-year quarter but not the current quarter. Contrail also showed lower component sales, continuing the post-fiscal-2026 normalization discussed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2026. AirCo attributed the shortfall in its revenue to delays in its materials program and low narrow body parts inventory, and Worthington attributed part of its shortfall to a slower-than-anticipated growth in its MRO exchange program alongside softness in third-party repair work and a slow start for its new product line. Jet Yard saw increased revenue driven by large service projects and offsite teardown work.
Revenues from the overnight air cargo segment for the three-month period ended December 31, 2025 decreased by an immaterial amount (0%) compared to the third quarter of the prior fiscal year.
The ground support equipment segmentsegment, consisting of Global Ground Support ("GGS"), contributed approximately $12.8$3.7 million and $11.8$15.1 million to the Company’s revenues for the three-month periodperiods ended DecemberJune 31,30, 20252026 and 20242025, respectively, representing aan $0.9$11.4 million (8%76%) increasedecrease in the current fiscal year quarter. The increasedecrease was primarily attributabledue to highertwo salesfactors: (1) the timing of high-liftan cateringannual equipment.U.S. military order, which occurred in the first quarter of fiscal 2026, and is anticipated in the third quarter of fiscal 2027; and (2) a large one-time deicing truck order in the prior year's comparable quarter that did not recur in the current period. At DecemberJune 31,30, 2025,2026, the ground support equipment segment’s order backlog was $12.9$9.0 million compared to $6.2$7.2 million at DecemberJune 31,30, 2024.2025.
The commercial aircraft, engines and parts segment contributed $18.8 million of revenues in the quarter ended December 31, 2025 compared to $32.7 million in the comparable prior year quarter, which is a decrease of $13.9 million (42%). The decrease was largely attributable to a decline in component sales at Contrail from aging component inventory. The aging inventory resulted from lower component inventory purchases during the preceding twelve-month period due to increased competition in acquiring component inventory as a result of market-wide initiatives. The Company is working to rebuild component inventory to historic levels.
DigitalThe digital solutions segment contributed $2.5$2.6 million of revenues in the quarter ended DecemberJune 31,30, 20252026 compared to $2.0$2.1 million in the prior year quarter, an increase of $0.5 million (25%). The increase iswas primarily due to increasedcontinued softwaregrowth subscriptionsin representeddata byanalytics monthlyand recurringairspace revenuesmanagement ofengagements $0.8in millionthis as of December 31, 2025 versus $0.7 million as of December 31, 2024.segment.
The aviation leasing and asset management segment, consisting of Crestone Air Partners and Arena, contributed revenues of $1.4 million, representing its contribution for the 21-day period from their respective consolidation and acquisition dates of June 10, 2026 through June 30, 2026. There is no prior-year revenue to report. Revenue consisted of origination, due diligence, and asset management fees.
Regional airline revenues were $5.2 million for the three months ended December 31, 2025 compared to none in the prior year period. The reported revenues represent approximately two weeks of operations from the acquisition date through December 31, 2025. The increase is attributable to the acquisition of Rex on December 18, 2025, as discussed in Note 2 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Report on Form 10-Q.
Operating Expenses
Consolidated segment operating expenses for the three-month period ended December 31, 2025 decreased by $3.9 million (6%) compared to the same quarter in the prior fiscal year.
Following is a table detailing operating expenses by segment during the three months ended December 31, 2025 compared to the same quarter in the prior fiscal year (in thousands):
The overnight air cargo segment contributed $26.0 million and $25.6 million to the Company's operating expenses for the three-month period ended December 31, 2025 and 2024, respectively, representing a $0.4 million (2%) increase in the current quarter. Operating expenses remained relatively consistent period-over-period.
The ground support equipment segment contributed approximately $9.6 million and $10.3 million to the Company's operating expenses for the three-month period ended December 31, 2025 and 2024, respectively, representing a $0.7 million (7%) decrease in the current quarter. The decrease was primarily driven by an improved product and customer mix, as well as lower non-material spending during the quarter.
The commercial aircraft, engines and parts segment contributed $14.1 million and $23.7 million to the Company's operating expenses for the three-month period ended December 31, 2025 and 2024, respectively, representing a $9.6 million (41%) decrease in the current quarter. Lower component sales in the current quarter resulted in the decrease in operating expenses.
The digital solutions segment contributed $0.8 million of operating expenses in the quarter ended December 31, 2025 compared to $0.6 million in the prior year quarter, reflecting a relatively flat year-over-year trend.
Regional airline operating expenses were $5.5 million for the three months ended December 31, 2025 compared to none in the prior year period, resulting from the acquisition of Rex on December 18, 2025, as discussed in Note 2 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Report on Form 10-Q. The reported operating expenses represent approximately two weeks of operations from the acquisition date through December 31, 2025. The operating loss during this initial period is attributable to fixed operating costs associated with maintaining flight operations, aircraft and crew, regulatory compliance requirements, and transaction-related integration expenses.
General and administrative
General and administrative expenses for the three-month period ended December 31, 2025 increased by $2.5 million (17%) compared to the first quarter of the prior fiscal year. The increase was primarily driven by acquisition-related costs incurred during the current year, as well as higher payroll and employee-related expenses.
Non-OperatingOperating Income (ExpenseLoss)
Following is a table detailing non-operatingoperating income (expenseloss) during the three months ended DecemberJune 31,30, 20252026 compared to the same quarter in the prior fiscal year (in thousands):
Consolidated operating loss for the quarter ended June 30, 2026 was $12.8 million, compared to operating income of $0.8 million in the comparable quarter of the prior year.
The regional airline segment, consisting of Rex, incurred an operating loss of $7.7 million for the three-month period ended June 30, 2026. There was no prior-year comparable as Rex was acquired on December 18, 2025. Depreciation and amortization attributable to Rex was $8.8 million for the quarter. Fuel expense of $11.8 million was the primary driver of the loss, with the increase driven principally by higher per-liter fuel prices rather than increased consumption. Rex does not hedge its fuel price or related Australian dollar/U.S. dollar exposure and purchases fuel at prevailing market prices, mitigating higher costs through fare adjustments, capacity management, and fuel levy arrangements with certain state governments. Higher unscheduled engine removals, together with lower engine throughput from third-party maintenance, repair and overhaul providers, also contributed to the loss by reducing the number of aircraft available for service below planned levels.
The overnight air cargo segment's operating income for the three-month period ended June 30, 2026 was $1.9 million compared to operating income of $1.5 million in the same quarter in the prior fiscal year. The increase was primarily driven by an improvement of approximately $0.4 million in FedEx Maintenance gross profit at MAC, almost entirely offset by higher pilot labor costs and flight operations overhead costs. WASI experienced a $0.3 million increase in operating income due to higher parts and labor revenue, as discussed further in the revenue discussion above.
The commercial aircraft, engines and parts segment generated an operating loss of $0.7 million in the current year quarter, compared to operating income of $0.9 million in the prior year quarter. This decrease was primarily attributable to the lower leasing and component sales revenue at Contrail noted in the revenue discussion above, together with year-to-date operating losses at AirCo and continued softness at Worthington, partially offset by improved margins at Jet Yard, where operating expenses remained relatively flat despite the increased service revenues noted above, and by LGSS's consignment income.
The ground support equipment segment incurred an operating loss of $0.2 million for the quarter ended June 30, 2026 compared to the prior year comparable quarter's operating income of $1.3 million, a decrease of $1.6 million. This decrease was primarily attributable to the lower sales noted in the revenue discussion above; however, the decline in operating income was substantially smaller than the decline in revenue because gross margin improved year-over-year, aided by favorable freight costs and manufacturing absorption.
The digital solutions segment generated operating income of $0.2 million in the current year quarter, compared to an operating loss of $0.3 million in the prior year comparable quarter. The improvement was primarily driven by two factors: revenue growth at high incremental margins and lower labor costs as AI-driven tools improved efficiency.
Aviation leasing and asset management generated an operating loss of $3.5 million in the current year quarter, representing 21 days of operations from the Arena acquisition date of June 10, 2026 through June 30, 2026 and year to date activity related to Crestone Air Partners. The operating loss reflects ongoing direct and indirect operating costs during the initial post-acquisition period following acquisition, $0.1 million of depreciation and amortization and $3.0 million of acquisition-related transaction costs.
Adjusted EBITDA
The table below provides Adjusted EBITDA, as described and reconciled on a consolidated basis to operating (loss) income as described in Non-GAAP Financial Measures below, for the three months ended June 30, 2026 and 2025 (in thousands):
Adjusted EBITDA for Rex was $1.9 million for the quarter, with no prior-year comparable. As with the operating loss discussion above, Rex's depreciation and amortization add-back of $8.8 million for the quarter is the largest reconciling item between its operating loss and its Adjusted EBITDA. Because the operating loss was driven principally by fuel expense and reduced aircraft availability rather than depreciation and amortization, most of that loss carries through to Adjusted EBITDA. In addition, Rex also incurred $0.7 million of post-acquisition integration costs during the quarter, which was added back to its Adjusted EBITDA from its operating loss.
Combined Adjusted EBITDA for the overnight air cargo businesses increased by $0.5 million (30%) to $2.1 million, consistent with the operating income improvement discussed above, driven by improved FedEx Maintenance results at MAC and higher parts/labor revenue at WASI.
Combined Adjusted EBITDA for the commercial aircraft, engines and parts businesses decreased by $1.2 million to a loss of $0.5 million, driven by the same factors discussed under operating income above: lower leasing and component sales revenue at Contrail, and year-to-date softness at AirCo and Worthington, partially offset by improvements at Jet Yard and LGSS.
AIRT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding AIRT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 103,411 | $2.7M | 0.0% | Reduced 3% |