Pemco Aviation Group Announces New Credit Agreement with Lenders and Sale of Pemco Engineers Subsidiary

  
    
  
  
    
      Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that it has 
      finalized the credit agreement with its lenders, Wachovia Bank and 
      Compass Bank. The new revolving credit facility will extend until August 
      31, 2007 and provides for increases if and when Pemco is awarded the new 
      KC-135 PDM contract with the United States Air Force. The existing 
      credit line expired on October 15 of this year.
    
    
      Randy Shealy, Senior Vice President and Chief Financial Officer of Pemco 
      Aviation stated, “We believe the new credit 
      line with Wachovia and Compass Banks provides Pemco with the flexibility 
      needed to operate in a very challenging and competitive environment. We 
      are pleased to have Wachovia and Compass’s 
      continuing support as partners in the future of Pemco.”
    
    
      Pemco also announced that it has completed the sale of its California 
      subsidiary, Pemco Engineers, Inc. to Global Aerospace Technology 
      Corporation. Mr. Shealy said, “The sale of 
      Pemco Engineers to Global Aerospace assures the continuing quality of 
      support products for cargo conversions. We are confident they will 
      remain on the cutting edge of new technology and provide our customers 
      with unparalleled support going forward.”
    
    
      Pemco Aviation Group, with executive offices in Birmingham, Alabama, and 
      facilities in Alabama and California, performs maintenance and 
      modification of aircraft for the U.S. Government and for foreign and 
      domestic commercial customers. The Company also provides aircraft parts 
      and support and engineering services, in addition to developing and 
      manufacturing aircraft cargo systems, rocket vehicles and control 
      systems, and precision components. For more information go to www.pemcoaviationgroup.com.
    
    
      This press release contains forward-looking statements made in 
      reliance on the safe harbor provisions of Section 27A of the Securities 
      Act of 1933, as amended, and Section 21E of the Securities Exchange Act 
      of 1934, as amended. These statements may be identified by their 
      use of words, such as "believe," "expect," "intend" and other words and 
      terms of similar meaning, in connection with any discussion of the 
      Company's prospects, financial statements, business, financial 
      condition, revenues, results of operations or liquidity. Factors 
      that could affect the Company's forward-looking statements include, 
      among other things: changes in global or domestic economic conditions; 
      the loss of one or more of the Company's major customers; the Company's 
      ability to obtain additional contracts and perform under existing 
      contracts; the outcome of pending and future litigation and the costs of 
      defending such litigation; financial difficulties experienced by the 
      Company's customers; potential environmental and other liabilities; the 
      inability of the Company to obtain additional financing; material 
      weaknesses in the Company’s internal control 
      over financial reporting; regulatory changes that adversely affect the 
      Company's business; loss of key personnel; and other risks detailed from 
      time to time in the Company's SEC reports, including its Annual Report 
      on Form 10-K for the fiscal year ended December 31, 2005. The 
      Company cautions readers not to place undue reliance on any 
      forward-looking statements, which speak only as of the date on which 
      they are made. The Company does not undertake any obligation to 
      update or revise any forward-looking statements and is not responsible 
      for changes made to this release by wire services or Internet services.
    
  
Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that it
has finalized the credit agreement with its lenders, Wachovia Bank and
Compass Bank. The new revolving credit facility will extend until
August 31, 2007 and provides for increases if and when Pemco is
awarded the new KC-135 PDM contract with the United States Air Force.
The existing credit line expired on October 15 of this year.

   Randy Shealy, Senior Vice President and Chief Financial Officer of
Pemco Aviation stated, "We believe the new credit line with Wachovia
and Compass Banks provides Pemco with the flexibility needed to
operate in a very challenging and competitive environment. We are
pleased to have Wachovia and Compass's continuing support as partners
in the future of Pemco."

   Pemco also announced that it has completed the sale of its
California subsidiary, Pemco Engineers, Inc. to Global Aerospace
Technology Corporation. Mr. Shealy said, "The sale of Pemco Engineers
to Global Aerospace assures the continuing quality of support products
for cargo conversions. We are confident they will remain on the
cutting edge of new technology and provide our customers with
unparalleled support going forward."

   Pemco Aviation Group, with executive offices in Birmingham,
Alabama, and facilities in Alabama and California, performs
maintenance and modification of aircraft for the U.S. Government and
for foreign and domestic commercial customers. The Company also
provides aircraft parts and support and engineering services, in
addition to developing and manufacturing aircraft cargo systems,
rocket vehicles and control systems, and precision components. For
more information go to www.pemcoaviationgroup.com.

   This press release contains forward-looking statements made in
reliance on the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements may be identified
by their use of words, such as "believe," "expect," "intend" and other
words and terms of similar meaning, in connection with any discussion
of the Company's prospects, financial statements, business, financial
condition, revenues, results of operations or liquidity. Factors that
could affect the Company's forward-looking statements include, among
other things: changes in global or domestic economic conditions; the
loss of one or more of the Company's major customers; the Company's
ability to obtain additional contracts and perform under existing
contracts; the outcome of pending and future litigation and the costs
of defending such litigation; financial difficulties experienced by
the Company's customers; potential environmental and other
liabilities; the inability of the Company to obtain additional
financing; material weaknesses in the Company's internal control over
financial reporting; regulatory changes that adversely affect the
Company's business; loss of key personnel; and other risks detailed
from time to time in the Company's SEC reports, including its Annual
Report on Form 10-K for the fiscal year ended December 31, 2005. The
Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date on which
they are made. The Company does not undertake any obligation to update
or revise any forward-looking statements and is not responsible for
changes made to this release by wire services or Internet services.