PAGI Pemco Aviation Grp. (MM)

Pemco Aviation Group (NASDAQ: PAGI) announced today that their Dothan, AL based subsidiary, Pemco World Air Services, has entered into a contract with East Pacific Airlines Co., Ltd. (EPA) to convert four B737-300 passenger aircraft to B737-300 full freighters. East Pacific is an all-cargo airline based in Shenzhen, China. The contract calls for two immediate conversions and two option aircraft. With capacity increasingly tight at Pemco's MRO and conversion facility in Dothan, the aircraft are being converted at STAECO/TAECO (in close cooperation with Pemco) at their facility in Jinan, Shandong Province, China. This unique collaboration between the companies allows Pemco to expand their global reach and offer their core conversion services regionally across Asia. The aircraft are already on-site, with the first conversion underway and the second conversion scheduled to begin in May. Pemco has trained STAECO/TAECO employees in production, sheet metal, engineering, quality and mechanics and the employees from each company will be working closely together to ensure the quality performance and quick turn-around for which Pemco has become known. Ron Aramini, President and CEO of Pemco Aviation Group, Inc., explained the significance, "This contract is a major expansion of our ability to win new contracts and secure new allegiances in a region that is becoming heavily dependent on cargo carriers. Additionally, our partnership with TAECO and STAECO is just the beginning of what we believe will be a long, and decidedly successful production partnership." Pemco Aviation Group, Inc., with executive offices in Birmingham, Alabama, and facilities in Alabama and California, performs maintenance and modification of aircraft for the U.S. Government and foreign and domestic commercial customers. The company also provides aircraft parts, support and engineering services and develops and manufactures aircraft cargo systems, rocket vehicles and control systems, and precision components. 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, 2005. 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.