• Third quarter sales of $451 million, up 50% year-over-year
• Diluted earnings per share from continuing operations of $0.45, up 61% year-over-year
• Commercial market sales growth of 44%
• Third quarter cash flow from operations of $30.1 million

WOOD DALE, ILLINOIS (March 15, 2011) — AAR (NYSE: AIR) today reported third quarter fiscal year 2011 consolidated sales of $451.0 million and income from continuing operations of $18.3 million, or $0.45 per diluted share. For the third quarter of the prior fiscal year, the Company reported sales of $300.8 million and income from continuing operations of $10.5 million, or $0.28 per diluted share. Prior year third quarter results included a $0.10 per diluted share unfavorable impact from a customer bankruptcy.

Sales to commercial customers increased 44% compared with the third quarter of fiscal year 2010, and included 53% sales growth in the Maintenance, Repair and Overhaul segment and 39% sales growth in the Aviation Supply Chain segment. The robust sales growth to the commercial market was due to improved conditions for the airlines and the Company’s success in winning new business.

Sales to government and defense customers increased 56% year-over-year due to sales at the Company’s Airlift business, which was acquired in the fourth quarter of the last fiscal year, and growth in program business at the Company’s defense logistics business.

“We are pleased to report another quarter of solid sales and earnings growth. We had exceptional organic sales growth to commercial customers, far outpacing the overall growth rate in the airline market. We are executing on our strategy of becoming more integral to our customers’ operations by providing more technical expertise and engineering content. This strategy has enabled us to deepen our current customer relationships and to capture new customers,“ said David P. Storch, Chairman and Chief Executive Officer of AAR CORP.

Commenting on performance in the government and defense markets, Storch continued, “Our defense logistics business experienced solid growth during the period and we again had a meaningful contribution from AAR Airlift. Our mobility products business continues to exhibit strength, albeit at levels below the prior year. Even as defense budgets are under pressure, we currently believe our businesses are well positioned in areas that will continue to receive strong funding support.”

The consolidated gross profit margin in the third quarter was 17.2%, and selling, general and administrative expenses as a percentage of sales were 9.4%. SG&A expenses included $2.2 million of unusual expenses, principally related to the relocation of AAR Airlift. The Company expects to incur approximately $2.0 million of additional AAR Airlift relocation expenses in the fourth quarter as the move is finalized. The consolidated operating margin was 7.8% of sales, and was unfavorably impacted by 50 basis points as a result of the above expenses.

Net interest expense increased $1.2 million year-over-year, principally due to increased borrowings to support AAR Airlift, and to a lesser extent, to non-cash interest expense on the Company’s outstanding convertible notes. The Company generated $30.1 million in cash flow from operations during the third quarter. Capital expenditures were $22.4 million, of which $17 million was to support recent contract awards at AAR Airlift.

As previously announced, during the third quarter, the Company concluded that it will exit its Amsterdam component repair facility, and is evaluating a number of strategic alternatives. Operating results for this unit are now being reported as a discontinued operation.

AAR is a leading provider of products and value-added services to the worldwide aerospace and government/defense industry. With facilities and sales locations around the world, AAR uses its close-to-the-customer business model to serve aviation and government/defense customers through four operating segments: Aviation Supply Chain; Government and Defense Services; Maintenance, Repair and Overhaul; and Structures and Systems. More information can be found at www.aarcorp.com.

AAR will hold its quarterly conference call at 7:30 a.m. CDT on March 16, 2011. The conference call can be accessed by calling 866-804-3547 from inside the U.S. or 703-639-1328 from outside the U.S. A replay of the call will be available by calling 888-266-2081 from inside the U.S. or 703-925-2533 from outside the U.S. (access code 1517813) from 11:30 a.m. CDT on March 16, 2011 until 11:59 p.m. CDT on March 23, 2011.

AAR - Named one of the Most Trustworthy Companies for 2010 by Forbes magazine.

This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on beliefs of Company management, as well as assumptions and estimates based on information currently available to the Company, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, including those factors discussed under Item 1A, entitled “Risk Factors”, included in the Company’s May 31, 2010 Form 10-K. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. For additional information, see the comments included in AAR’s filings with the Securities and Exchange Commission.