U.S. aviation support company AAR Corp has begun the sale of cargo handler Telair in a deal that could value the German business at up to 800 million euros ($988 million), three sources familiar with the matter said. European private equity firms Cinven and EQT are among those through to the second round of the process being run by U.S. bank Citi, the sources said. Second-round bids are due early next year, one of the sources said, declining to be identified because the matter is private. Telair could also appeal to rivals such as U.S. aerospace component company TransDigm, a source familiar with the process said, adding that it remains unclear which strategic players will submit final bids. New York-listed TransDigm is currently focusing on an acquisition strategy targeting components and services businesses to spread exposure across the aircraft industry's cycle, the company's website says. Annual core earnings (EBITDA) at Telair are about 80 million euros and the company could fetch up to ten times that, the sources said, cautioning that no deal was certain and the process could fall through. AAR, Citi and Cinven declined to comment. Telair, TransDigm and EQT were not immediately available for comment. Previously owned by Teleflex, Telair was sold to AAR along with Nordisk Aviation Products in 2011 for a combined $280 million. Telair designs, manufactures and supports on-board baggage and cargo systems, such as its "Sliding Carpet" device, for companies including Airbus and Boeing. Since the 2011 acquisition Telair has bought Germany's PFW Aerospace, boosting its loading-system assets. Telair's low capital expenditure and ability to free up cash quickly makes it attractive to private equity bidders, the sources said. (Reuters)