WOOD DALE, Ill.,/PRNewswire-FirstCall/ -- AAR (NYSE: AIR) today announced that its Allen Asset Management division has signed a three-year agreement to provide supply chain services for Chautauqua Airlines. Chautauqua Airlines is a regional airline that operates flights under its major airline partner brands, consisting of AmericanConnection, Delta Connection, United Express and US Airways Express.

As part of a complete end-to-end supply chain management program, AAR will provide asset planning and repairs and will maintain rotable and expendable inventories at three line stations to support the introduction and operation of 24 CRJ 200 regional jets. Work on the program is currently underway in support of Chautauqua's schedule to begin commercial service for its newest partner, Continental Airlines with the CRJ 200 aircraft in January, 2007.

"The AAR program is designed to assist Chautauqua as it seeks to operate more efficiently while minimizing the expense of maintaining and operating their new CRJ 200 fleet," said David P. Storch, Chairman, President and CEO of AAR. "We look forward to becoming a strategic partner and integral part of Chautauqua's supply chain operations."

As the worldwide fleet of regional jets continues to grow and mature, the maintenance and support requirements are expected to increase. AAR is well positioned to meet these requirements with a broad range of services, including logistics; component repair; overhaul of landing gear, wheels and brakes; nose-to-tail aircraft maintenance and cost-effective engineering modifications.

Chautauqua Airlines is owned by Republic Airways Holdings, which is based in Indianapolis and also owns Republic Airlines and Shuttle America. These airlines offer scheduled passenger service on over 1,000 flights daily to 92 cities in 37 states, Canada, Mexico and the U.S. Virgin Islands through airline services agreements with four major U.S. airlines. The airlines currently employ over 3,500 aviation professionals and operate 171 regional jet aircraft.

AAR's Allen Asset Management division integrates AAR's supply, repair, distribution, information technology, and logistics services into complete end-to-end supply chain management programs that help customers reduce their investment in surplus inventory and minimize operational expenses.

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 1A, entitled "Risk Factors", 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:
Chris Mason
Director of Corporate Communications of AAR
+1-630-227-2062
chris.mason@aarcorp.com