PAGI Pemco Aviation Grp. (MM)

Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that its Dothan, Alabama subsidiary, Pemco World Air Services, Inc., has redelivered the first B737-400 conversion to Alaska Airlines pursuant to its previously-announced contract. This aircraft conversion represents the first-ever modification of a B737-400 aircraft from passenger to freighter in the world. Alaska Airlines has contracted to have another four aircraft converted by Pemco, and has options available to add two more aircraft to the line. "We are very proud of this achievement," said Ron Aramini, President and CEO of Pemco Aviation Group, Inc. "Pemco World Air Services has provided yet another level of excellence for our customers by not only meeting emerging market needs, but providing our customer with the proven reliability and operational excellence Pemco has become known for over the years. We are proud to provide Alaska Airlines and the cargo world with the first B737-400 freighter." "Alaska Airlines' cargo customers will significantly benefit from the additional capacity on this freighter and the other larger cargo aircraft on their way from Pemco," said Matt Yerbic, Alaska Airlines' managing director of cargo. "Pemco's focus on quality during the retrofitting process resulted in a product that will allow us to better serve the growing needs of our cargo customers throughout the state of Alaska and beyond." Pemco World Air Services has converted over 50 B737-300 aircraft to freighter and QC configurations in recent history. Together with this 737-400F delivery, Pemco's total rises to twenty models and over 300 aircraft converted in the past three decades. Pemco is well positioned in the aircraft modification and maintenance marketplace to serve its many global customers by providing some of the most reliable and high quality engineered products available in the industry. Kevin Casey, Vice President, Business Development, stated, "Eric Wildhagen, Vice President Engineering, and his team, including both Pemco and Alaska Airlines personnel, has delivered in just over 1 year what will undoubtedly prove to be one of the best narrowbody freighters ever built." 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 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: www.pemcoaviationgroup.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, 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.