PAGI Pemco Aviation Grp. (MM)

Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that its Dothan, Alabama subsidiary, Pemco World Air Services, has contracted with International Lease and Finance Corporation (ILFC) for three additional conversions of B737-300 aircraft from passenger to freighter configuration. The aircraft are option aircraft which were part of a modification agreement announced by the parties in September, 2006. Two of the aircraft are owned by, and one is managed by, ILFC. It is anticipated that all three aircraft will be redelivered at the facility of Pemco�s global partner, STAECO, in Jinan, Shandong Province, China to an Asian operator. Kevin Casey, Vice President, Business Development for the Commercial Services Sector, stated, �We couldn�t be more pleased by the relationship that we have developed with ILFC. They have become a very important part of Pemco�s future and we are excited to be a part of theirs. Pemco has also realized great partners in TAECO and STAECO � their work is of the highest quality and it is schedule friendly for our customers. We feel that we are truly able to support our customers in Asia in a manner worthy of their outstanding operations.� Richard Poutier, Senior Vice President, ILFC stated, �These conversions represent the second, third and fourth B737-300 passenger-to-freighter modifications that we will have performed by Pemco within a 12-month period. Given the projected growth in air cargo demand, it wouldn�t surprise me to see ILFC doing more 737 conversions over the next few years. Pemco has proven to be a reliable supplier, providing a high quality product.� Pemco Aviation Group, with executive offices in Birmingham, Alabama, and facilities in Alabama and California, performs maintenance and modification of aircraft for the U.S. Government and for foreign and domestic commercial customers. The Company also provides aircraft parts and support and engineering services, in addition to developing and manufacturing aircraft cargo systems, rocket vehicles and control systems, and precision components. For more information go to www.pemcoaviationgroup.com. ILFC is the international market leader in the leasing and remarketing of advanced technology commercial jet aircraft to airlines around the world. ILFC owns a portfolio valued at more than $ 40 billion, consisting of more than 800 jet aircraft. For more information go to www.ilfc.com. This press release contains forward-looking statements made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by their use of words, such as "believe," "expect," "intend" and other words and terms of similar meaning, in connection with any discussion of the Company's prospects, financial statements, business, financial condition, revenues, results of operations or liquidity. Factors that could affect the Company's forward-looking statements include, among other things: changes in global or domestic economic conditions; the loss of one or more of the Company's major customers; the Company's ability to obtain additional contracts and perform under existing contracts; the outcome of pending and future litigation and the costs of defending such litigation; financial difficulties experienced by the Company's customers; potential environmental and other liabilities; the inability of the Company to obtain additional financing; material weaknesses in the Company�s internal control over financial reporting; regulatory changes that adversely affect the Company's business; loss of key personnel; and other risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company does not undertake any obligation to update or revise any forward-looking statements and is not responsible for changes made to this release by wire services or Internet services.