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Press release

December 20, 2006

Southwest Airlines Selects AAR for 737 Maintenance

WOOD DALE, Ill., /PRNewswire-FirstCall/ -- AAR (NYSE: AIR) today announced that it has been selected by Southwest Airlines to perform heavy maintenance services and winglet installations for the airline's Boeing 737 aircraft. The work will be performed at AAR Aircraft Services - Indianapolis, the Company's state-of-the-art maintenance, repair and overhaul (MRO) operation located at Indianapolis International Airport.

According to the three-year agreement, AAR will operate one line of nose- to-tail heavy maintenance checks starting in January 2007. The winglet installation will include two nose-to-tail lines, each operating for 16-18 months starting in January 2007.

"Southwest has a world-class reputation for operating efficiently and providing outstanding customer service," said David P. Storch, Chairman, President and Chief Executive Officer of AAR CORP. "We're looking forward to leveraging our experience and capabilities with the Boeing 737 platform to enable Southwest to further strengthen its industry-leading position and maintain its competitive edge."

AAR offers a wide range of maintenance, repair and overhaul services, including airframe maintenance and modifications, through its aircraft maintenance facilities located in Indianapolis and Oklahoma City. Both facilities are located along Southwest Airlines' route network. For each of the past two years, every one of AAR's eligible maintenance facilities earned the FAA's Diamond Award, the highest honor in the FAA's Aviation Maintenance Technician Awards Program, which recognizes companies for excellence in technical and regulatory training.

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 www.aarcorp.com.

Southwest Airlines, the nation's largest carrier in terms of domestic passengers enplaned, currently serves 63 cities in 32 states. Based in Dallas, Southwest currently operates more than 3,100 flights a day and has more than 32,000 employees systemwide.

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
+1-630-227-2062
chris.mason@aarcorp.com

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