Aviation Group, Inc. Announces Appointment of Thomas J. Smith as President and COO.

DALLAS--(BUSINESS WIRE)--Aug. 18, 1998--Aviation Group, Inc. (NASDAQ: AVGP) announced today that it has appointed Thomas J. Smith as its President and Chief Operating Officer. Smith was also appointed to the company's board of directors, and will begin his duties immediately. "We are thrilled to have Tom on our team", said Lee Sanders, Aviation Group's Chairman and CEO. "He brings decades of aviation industry operating experience to our company, and his reputation and track record is both superior and widely known".

"Joining Aviation Group is a perfect fit for me", said Tom Smith. "Lee Sanders and his team have demonstrated clearly their vision and capabilities for the industry. With access to public capital, and using their existing base as a foundation, I am sure that together we can build a major aviation service holding company within the next few years".

Smith was recently the owner of General Electrodynamics Corporation, based in Arlington, Texas. GEC is the world market-share leader in the manufacture and sale of precision scales used for weighing aircraft during their required maintenance and repair procedures, and was acquired by Aviation Group's Component Overhaul and Service Division simultaneous with his appointment.

Smith, 58 years old, has over 35 years of experience in numerous areas of the aviation, aerospace, and transportation industries. Prior to his entrepreneurial purchase and operation of GEC in 1995, Smith was President and CEO of the $425,000,000 Rail Systems Group of Morrison Knudsen Corporation. Previous positions also include the head of manufacturing operations of Fokker Aircraft in Amsterdam, Holland (revenues of $2 billion), CEO of Fairchild Aircraft (1984-1988), and President of Mooney Aircraft in Texas.

"Tom is a real find", said Sanders. "He possesses operating expertise in both the commercial aviation and general aviation arenas. As former Chairman of the General Aviation Manufacturers Association, he has incredible contacts in the general aviation field. As head of the Fokker operations, he oversaw the manufacture and delivery of hundreds of commercial jetliners to American Airlines, USAir, and many others in the late 1980's. His appointment further confirms our belief that Aviation Group is building a truly unique and exciting aviation service holding company, and future success has definitely been enhanced by his participation with us".

Aviation Group is a publicly traded holding company based in Dallas, Texas. Aviation Group operates world-class painting facilities through its Pride Aviation and Tri-Star Aircraft Services divisions in New Iberia, Louisiana and Portland, Oregon. Through its Tri-Star Airline Services division, Aviation Group provides airline ground services to a variety of passenger and freight airlines at airports located across the United States. Its Fixed Base Operations and Airport Management division, through Casper Air Service, provides fuel, parts, and light maintenance services to general, corporate, and freight aircraft customers. The Company's Component Overhaul and Service Division manufactures replacement batteries, precision aviation scales and other component parts for general and commercial airplanes. Additional information can be obtained from the Company's website at www.aviationgroup.com.

This press release contains statements that constitute forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, the Company's dependence on one customer, changes in the airline travel industry, seasonality of the Company's painting business, risk of future losses from operations, the ability to make additional business acquisitions, uninsured casualty losses, environmental regulation of airline stripping and painting operations and increased competition in the airline services industry. Other risks and uncertainties include changes in business conditions and the economy in general, changes in governmental regulations, unforeseen litigation and other risk factors identified in the Company's SEC filings under "Risk Factors." The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this press release.

    CONTACT:  Aviation Group Inc., Dallas
               Lee Sanders, 214/922-8100