A traditional packaged Air handling unit (AHU) with a perpendicular rotary heat exchanger (rotor) design uses excessive fan energy to overcome the pressure drop of the rotary heat exchanger when the full recovery effect of the heat exchanger is not required. The present invention relates to an Air Handling Unit (AHU) comprising at least one rotary heat exchanger (6) tilted at an angle, one or more air inlets (2), air outlets (3), air filters (5), fan enclosures (4), and one or more centrifugal plenum fans (8) producing an air flow through the AHU. The AHU further includes one or more bypass channels (7), with bypass dampers (10) being placed on one or both sides of the rotary heat exchanger (6), said bypass dampers (10) when arranged in an open, partially closed or completely closed position directs the airflow produced by the centrifugal plenum fans (8) to pass through either the bypass channel (7), or the rotary heat exchanger (6), or both. This combination provides an improved fan energy consumption over existing designs with rotary heat exchangers without extending the cross sectional dimensions of the AHU.