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Press release

August 31, 2006

AAR Finalizes $140M Senior, Unsecured Bank Facility

WOOD DALE, Ill., /PRNewswire-FirstCall/ -- AAR (NYSE: AIR) today announced that the Company has closed on a senior, unsecured revolving credit facility. The facility has an initial limit of $140 million and can be increased to $175 million under certain circumstances. The new agreement has a term of four years and an interest rate fluctuating between LIBOR plus 125 and 200 basis points based on certain financial measurements. LaSalle Bank N. A. is the lead bank in the syndicate of banks making this credit line available to AAR. This new financing replaces the Company's $30 million secured revolving credit facility, which has been cancelled, and its $50 million accounts receivable securitization facility, which will be cancelled over the next 90 days.

"Our improved financial performance and outlook have allowed us to simplify our capital structure, replacing multiple secured credit facilities with one unsecured facility that has more attractive terms and pricing," said Timothy J. Romenesko, Vice President and Chief Financial Officer of AAR. "The new facility provides us with even greater financial flexibility and availability of funds to grow our business and position the Company for the future."

AAR is a leading provider of products and value-added services to the worldwide aviation/aerospace industry. With facilities and sales locations around the world, AAR uses its close-to-the-customer business model to serve airline and defense customers through four operating segments: Aviation Supply Chain; Maintenance, Repair and Overhaul; Structures and Systems and Aircraft Sales and Leasing. More information can be found at http://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 7, entitled "Factors Which May Affect Future Results", included in the Company's May 31, 2006 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.

SOURCE AAR CORP.

CONTACT: Timothy J. Romenesko, Vice President, Chief Financial Officer of AAR, +1-630-227-2090, tromenesko@aarcorp.com

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