WOOD DALE, ILLINOIS (January 1,2003) - AAR and Air Berlin announced that they have signed an agreement under which AAR Aircraft Component Services - Amsterdam will provide component management and repair for Air Berlin's fleet of twenty-seven 737-800 new generation aircraft.

One of Europe's fastest growing airlines, Air Berlin operates a fleet of 32 aircraft, carrying more that 6 million passengers annually and servicing 18 German airports and 35 tourist destinations in the Mediterranean and Northern Africa. Under the agreement, AAR will manage all warranty work and provide comprehensive maintenance, repair and overhaul support for 129 LRU's (Line Replacement Units) on the airline's 737-800.

"We are pleased that Air Berlin has selected AAR to provide total support for their fleet of 737-800's," said Jürgen Büttgenbach, Vice President Sales and Marketing for AAR Aircraft Component Services. "Our ability to provide comprehensive component oversight and support for Air Berlin's new generation fleet was a significant factor in their decision. We look forward to working with this outstanding airline."

AAR Aircraft Component Services - Amsterdam, an operating division of AAR Corp. (NYSE: AIR), services rotable components with AOG service-24 hours a day, 365 days a year at its state-of-the-art facility equipped to repair, overhaul, and maintain more than 22,000 parts. Inventory includes components for large commercial aircraft such as Boeing/McDonnell Douglas and Airbus, as well as regional aircraft such as BAe, Fokker, ATR, Embraer, Bombardier and Saab. The facility is also an authorized warranty repair station for manufacturers such as Allied Signal, Aerospatiale Canada, AMETEK, Kollsman and many others. AAR CORP. is the preeminent provider of products and value-added services to the worldwide aerospace/aviation industry. Products and services include proprietary inventory management and logistic support services, encompassing supply, repair and manufacture of spare parts and systems. Headquartered in Wood Dale, Illinois, AAR serves commercial and government aircraft fleet operators and independent service customers throughout the world.

Further information can be found at www.aarcorp.com and www.airberlin.com.