Pemco Aeroplex Selected for Lockheed Martin Aircraft Maintenance Team.

GREENVILLE, S.C. & BIRMINGHAM, Ala. -- Lockheed Martin Aircraft and Logistics Centers (LMALC) has selected Pemco Aeroplex, a subsidiary of Pemco Aviation Group (NASDAQ:PAGI), as a partner to pursue and execute military aircraft maintenance contracts. The first award for this team is a new contract with the US Air Force to perform C-130 Unscheduled Depot Level Maintenance (UDLM).

The UDLM contract with the Warner Robins Air Logistics Center is valued at $45 million over five years and encompasses any repairs that are required outside of the scheduled depot maintenance visits.

Other participants in this C-130 UDLM award include L-3 Spar Aerospace of Edmonton, Alberta; Crestview Aerospace and Aerospace Integration Corporation, both of Crestview, Florida.

"This contract award demonstrates the strength of the team assembled," said David Posek, President of Lockheed Martin Aircraft & Logistics Center. "We look forward to working with our team members to provide an unsurpassed level of C-130 support to the United States Air Force."

Looking to the future, Duncan Koerbel, LMALC's Vice President and General Manager, Aircraft Maintenance & Modifications, commented, "We are pursuing many other programs by combining partners' strengths with those of LMALC to create a formidable team. Toward that end, we have signed a separate agreement with Pemco Aeroplex which establishes a business relationship that will allow the companies to leverage each other's strengths to jointly pursue and execute airframe maintenance and modification programs for military aircraft. This agreement is currently focused on aircraft maintenance programs now under way at the companies' facilities in Greenville and Birmingham. We anticipate expanding the cooperation to a variety of other programs including new pursuits."

"We are entering into a very important working relationship with Lockheed Martin - a relationship benefiting both parties," said Ron Aramini, President and CEO of Pemco Aviation Group. "The LMALC / Pemco team has unparalleled facility capacity and military maintenance experience. Between the two companies we have over 2 million square feet of hangar space capable of housing more than 80 aircraft simultaneously. Combined, we have tremendous engineering capabilities, systems experience, technical expertise, quality, flexibility and cost-competitiveness. We believe this agreement is truly beneficial for Lockheed Martin, Pemco, and most importantly, the customer. We look forward to expanding our relationship with LMALC and building on our UDLM award."

Headquartered in Bethesda, Md., Lockheed Martin employs about 130,000 people worldwide and is principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services.

Pemco Aviation Group, Inc., with executive offices in Birmingham, Alabama, and facilities in Alabama, Florida, and California, performs maintenance and modification of aircraft for the U.S. Government and foreign and domestic commercial customers. The company also provides aircraft parts and support and engineering services and full service overhaul and repair for a wide range of aircraft. Pemco Aviation Group also develops and manufactures aircraft cargo systems, rocket vehicles and control systems, and precision components for the aviation industry.

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: negative effects arising from the Company's previously announced investigation and restatement; 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; regulatory changes that adversely affect the Company's business; loss of key personnel; and other risks detailed form time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2003. 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.