Insights to AAFES 


I recently attended a meeting of the Exchange Retiree Advisory Council (ERAC) at the Army& Air Force Exchnage Services ( AAFES) headquarters in Dallas, TX.  WIth all the recent discussions in the news about the Commissary and recent discussions about the Exchange, I thought I would share my notes from the meeting along with some insights about our Exchange service.

For more than 117 years, AFFES' mission has been to support the men and women of the armed forces during military operations, humanitarian missions and other endeavors around the world. Their motto: "WE GO WHERE YOU GO" epitomizes their mission to support soldiers and airmen all aorund the world

AAFES is a joint non-appropiated fund instrumentality of the Department of Defense (DOD) with an enduring two-part mission.

AAFES provides quality merchandise and services for their coustomers at competitively low prices: and second , to generate earnings which provide dividends to support morale, welfare and recreations (MWR) programs.

AAFES is led by Mr. Thomas Shull , the Director and Chief Executive Officer; Maj Gen Joseph S. Ward Jr, the Deputy Director; and Chief Master Sgt. Anthony Pearson, the senior enlisted advisor.

Oversight and governing for AAFES is excuted through an 18 member Board of Directors that includes the Air Force A-1, Army G-4, Chief Master Sergeant of the Air Force, Sergeant Major of the Army, and other senior regional military and civilian leaders from both services.

The BOD is responsible to the Secretaires of the Army and Air Force through the service Chiefs of Staff.

I provided this discussion about AAFES' chain of command so all would understand that "AAFES" is part of the military service and not a private organization doing business on our military installations

AAFES is the top employer of military spouses in the world and has hired more than 480 wounded warriors since 2010.

AAFES currently operates more than 2,800 facilities worldwide. AAFES has leverage by buying in bulk which allows them to price match or beat other retailer prices. This is now  AAFES is able set the prices for their merchandise.

The profit from goods and services sold is first used to pay all bills, the utilities and the employees.

AAFES funds 98 percent of its operating budget from the sale of goods and services. The remaining two percent of their funding comes from Apporiated Funds used primarily to support overseas operations.

A portion of the earnings is used for recapitalization and modernization of all existing facilities and to build new facilities as needed.

The largest percentage, two-thirds of the earnings is paid to MWR to support soldier, arimen and family programs.

Unlike AAFES' civilian retail counterparts who pay their profits to their shareholders, AAFES' shareholders are the soldiers, airmen, and their families.

AAFES provided more than $230 million in dividends to MWR in 2012 for quality-of-life improvements including youth services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, golf courses, play grounds, basketball and tennis courts, gyms and more.

Without MWR dividends, all of our quality of life programs on our military bases would suffer an impact, especially now with the tightening of Appropriated Fund Budgets.

During the ERAC meeting the topic of  Commissaries was discussed and the question was asked about the impact on AAFES should those facilities close.

On all military installations, the Exchange and the Commissary are generally co-located together. The two facilities complement each other and make it easier for families to complete all their shopping needs in one place.

Taking the Commissaries away would force patrons to shop elsewhere for their groceries and sever this tie with the Exchnage. Predictions indicate severing this relationship would have a dramatic impact on the Exchnage and the goods and services they provide.

AFFES will celbrate their 118th birthday this year and we can all be proud of what they continue to do to support our troops in all three components of our Army, our retireed soldiers and their families everyday.