WOOD DALE, ILLINOIS (January 9, 2008) - AAR CORP. (NYSE: AIR) announced today that on February 12, 2008 (the "Redemption Date"), it will redeem in full the Company's 2.875% Convertible Senior Notes due February 1, 2024 (the "Notes"). The aggregate principal amount of the Notes outstanding is approximately $16.36 million.

On the Redemption Date, the Notes will be redeemed at a redemption price of 100.958% of the principal amount thereof, plus accrued and unpaid interest to the Redemption Date.

Alternatively, on or prior to 5:00 p.m., Eastern Time, on February 11, 2008, holders may elect to convert their Notes into shares of the Company's Common Stock at a conversion price of approximately $18.59 per share of Common Stock (which is equal to a conversion rate of approximately 53.7924 shares of common stock per $1,000 principal amount of Notes). Cash will be paid in lieu of fractional shares. The last reported sale price of the Company's Common Stock on the on the New York Stock Exchange, as of January 8, 2008, was $31.25 per share.

Any Notes not converted on or before 5:00 p.m. on February 11, 2008, will be automatically redeemed on February 12, 2008, after which interest will cease to accrue.

A Notice of Redemption is being mailed to all registered holders of the Notes. Copies of the Notice of Redemption may be obtained from the paying and redemption agent, U.S. Bank National Association by calling Mr. Richard Prokosch at 651-495-3918.

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

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, 2007 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 publicly release the result of any revisions that may be made to 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.