PAGI Pemco Aviation Grp. (MM)

Pemco Aviation Group ("Pemco") (NASDAQ:PAGI) announced today that it has received notice from the United States Air Force ("USAF") that it will amend the Request for Proposal ("RFP") for the performance of Programmed Depot Maintenance ("PDM") on KC-135 aircraft starting in FY08 (the "Program") to provide additional time for current and new bidders to respond to the solicitation. The solicitation, which opens on July 12, 2006, will provide a period of 60 days to submit proposals on the Program. The change will allow Pemco either to bid on the work as a prime contractor or to partner with another firm. Pemco is currently teamed with Boeing to provide KC-135 maintenance and modification work through FY07. That contract remains in place and there are options for the USAF to extend it into 2008. Ron Aramini, President and Chief Executive Officer, stated, "Pemco is very pleased to have an opportunity to bid on future KC-135 PDM work. We have provided the most dependable quality and lowest cost, plus competitive turn-times for the KC-135 program, and we will continue to do so. We are very encouraged by this opportunity and look forward to keeping this program at Pemco where it has been the core of our 35-year successful history with military aircraft." Michael Tennenbaum, Chairman of Pemco's Board of Directors added, "The KC-135 work is crucial to the profitable operation of Pemco's Birmingham, Alabama facility which employs, directly and indirectly, about 1,000 people. The tanker is also a vital part of our country's airpower capabilities which are a centerpiece of current military operations. We strongly believe that keeping an industrial capacity to maintain large numbers of KC-135's is prudent national defense policy." 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.