$25 Million Over-allotment Option Excercised By Initial Purchasers Of Convertible Notes

AAR CORP. (NYSE: AIR) today announced that the initial purchasers of the convertible senior notes issued on February 11, 2008 (the “Notes”) have exercised in full their over-allotment option to purchase an additional $25 million in aggregate principal amount of Notes. The additional Notes will be allocated evenly between the two tranches of Notes, resulting in a total of $137.5 million aggregate principal amount of 1.625% convertible senior notes due 2014 and $112.5 million aggregate principal amount of 2.25% convertible senior notes due 2016. The Company expects to complete the sale of the additional Notes on February 19, 2008.

As with the initial $225 million of Notes, the additional $25 million of Notes are subject to separate convertible note hedge transactions between the Company and an affiliate of one of the initial purchasers of the Notes. Separately, the Company will enter into additional warrant transactions with an affiliate of one of the initial purchasers of the Notes. These convertible note hedge and warrant transactions are intended to reduce potential dilution to the Company’s common stock upon potential future conversion of the Notes and generally have the effect on the Company of increasing the conversion price of the Notes to approximately $48.83 per share, representing a 75.0% premium based on the last reported sale price of $27.90 per share on February 5, 2008.

The Notes have not been registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable securities laws. This news release does not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.