ATSG’s PEMCO Receives FAA Approval for its Boeing 737-700 FlexCombi™ Conversion Program

Air Transport Services Group, Inc. (NASDAQ:ATSG) announced today that the U.S. Federal Aviation Administration has approved its Passenger-to-FlexCombi™ conversion program for the Boeing 737-700 Next Generation aircraft.

ATSG said the FAA issued a Supplemental Type Certification for its unique conversion design for the Boeing 737-700, offering customers two different main-deck freight and passenger configurations as well as full-freighter mode. The aircraft will be marketed as B737-700FC (FlexCombi™). PEMCO Conversions, a division of ATSG subsidiary Pemco World Air Services, Inc., developed and managed the program from its headquarters in Tampa, FL.

“To reach this moment in the development of our 737-700 passenger-to-freighter conversion program solidifies our presence as a global leader in the marketplace,” said Mike Andrews, director of conversion programs for PEMCO. “We are pleased with the performance of our Tampa cargo conversion team and continue to develop innovative products meeting increased customer demand for 737 conversions.”

The launch customer for the PEMCO B737-700FC is Bahrain-based Chisholm Enterprises, an internationally recognized provider of tailored aviation and business solutions in the Middle East. Its subsidiary Texel Air, a non-scheduled cargo airline, will operate the B737-700FC from Bahrain International Airport.

PEMCO General Manager Jeff Becker added, “Chisholm is a great partner that provides unique services in its market, so the flexibility of our 737 conversion products continues to meet Chisholm’s needs as its fleet grows.”

Now that the 737-700 conversion program has received FAA approval, PEMCO plans to seek certification from the European Aviation Safety Agency and the Civil Aviation Administration of China.

The PEMCO B737-700FC (FlexCombi™) offers three configurations: a 24-seat cabin plus a 2,640-cubic-foot cargo hold for up to 30,000 pounds of payload in six pallet positions; a 12-seat cabin plus a 3,005-cubic-foot cargo hold for up to 35,000 pounds of payload in seven pallet positions; or full-freighter mode consisting of a 3,370-cubic-foot cargo hold for up to 40,000 pounds of payload in eight pallet positions. The available positions will accommodate 88” x 125” or 88” x 108” pallets, with the seventh and eighth positions accommodating smaller pallets.

PEMCO also is developing a B737-700F full-freighter conversion program. Those freighters would feature nine pallet positions, up to 45,000 pounds of payload, and 3,844 cubic feet of total volume. The available positions will accommodate 88” x 125” or 88” x 108” pallets, with the ninth position accommodating a smaller pallet.

PEMCO is the global leader in narrow-body passenger-to-freighter aircraft conversions, having developed over 70 STCs and modified over 350 aircraft. PEMCO’s 60-plus customers select the company’s passenger-to-freighter conversions for their superior cargo door and loading systems, superior operating functions, on-time turnaround, and PEMCO’s track record of 2 million hours of safe, reliable operation.

About PEMCO Conversions

PEMCO Conversions, a division of Pemco World Air Services, Inc. serves customers from airlines to private aircraft operators. It has developed over 70 STCs and modified over 350 aircraft, and has conversion partnerships in China, Costa Rica and Canada. PEMCO’s cargo conversion program is the global leader in narrow-body passenger-to-freighter aircraft conversions. Pemco World Air Services, Inc. and Airborne Maintenance and Engineering Services, Inc., wholly-owned subsidiaries of Air Transport Services Group, Inc. (NASDAQ:ATSG) and separately certified repair stations, offer 320,000 sq. ft. of hangar space in Tampa, Florida and 315,000 sq. ft. of hangar space in Wilmington, Ohio, providing a range of services to the aviation sector including heavy maintenance, line maintenance, cargo conversions, engineering services, material sales and manufacturing. For more information, please visit PEMCOAIR.com or AIRBORNEMX.com.

About Air Transport Services Group

ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft leasing, air cargo lift, passenger ACMI and charter services, aircraft maintenance services and airport ground services. ATSG's subsidiaries include ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air International, LLC. For more information, please see www.atsginc.com.

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