Air T, Inc. Reports 8.7% Revenue Decline in Q3 Fiscal 2026 Amid Acquisition of Rex Express Holdings

Air T, Inc. reported a decline in financial performance for the third quarter of fiscal 2026, with total operating revenues of $71.1 million, down 8.7% from $77.9 million in the same quarter of the previous year. The decrease was primarily driven by a significant drop in revenue from the commercial aircraft, engines, and parts segment, which fell by 42% to $18.8 million, attributed to reduced component sales due to aging inventory. In contrast, the ground support equipment segment saw an 8% increase in revenue to $12.8 million, while the newly acquired regional airline segment contributed $5.2 million in revenue for the two weeks following its acquisition on December 18, 2025.

The company's operating expenses for the quarter decreased by 6% to $74.9 million, compared to $76.5 million in the prior year. This reduction was influenced by a 41% decrease in operating expenses within the commercial aircraft segment, reflecting lower component sales. However, general and administrative expenses rose by 17% to $16.7 million, largely due to acquisition-related costs and increased payroll expenses. The overall operating loss for the quarter was $3.8 million, a decline from an operating income of $1.4 million in the same quarter last year.

Air T's strategic developments included the acquisition of Rex Express Holdings Ltd., which marks the company's entry into the Australian regional airline market. This acquisition is expected to enhance Air T's operational footprint and diversify its service offerings. The integration of Rex is anticipated to require significant management resources and may introduce complexities in financial reporting and operational oversight. The company has also reported a preliminary bargain purchase gain related to this acquisition, which is subject to final valuation adjustments.

In terms of operational metrics, Air T's cash and cash equivalents increased significantly to $42.2 million as of December 31, 2025, compared to $5.9 million at the end of the previous fiscal year. The company’s working capital, excluding the deferred bargain purchase gain, rose to $89.2 million, reflecting a substantial increase in inventory and accounts receivable. The company also reported a net non-operating income of $1.9 million for the quarter, driven by increased income from equity method investments.

Looking ahead, Air T's management expressed cautious optimism regarding the integration of Rex and its potential to contribute positively to the company's financial performance. However, they acknowledged the inherent risks associated with the acquisition, including regulatory compliance and the need for effective operational integration. The company remains focused on managing its cost structure and leveraging its diversified portfolio to enhance shareholder value in the coming quarters.