APRIL 11TH, 2017

ATSG Subsidiaries to Convert Two B737-400 Aircraft For China-Based Airline

WILMINGTON, OH – April 11, 2017 – Air Transport Services Group, Inc. (NASDAQ:ATSG) announced today that its subsidiaries have acquired two Boeing 737-400 aircraft and will convert them to freighter configuration for lease to China-based Okay Airways.

ATSG West Leasing Limited, an aircraft leasing company based in Ireland and a wholly owned ATSG subsidiary, has acquired and will lease the aircraft to Okay in late 2017 for terms of seven years. PEMCO World Air Services, another wholly owned ATSG subsidiary, will convert the 737-400s to freighters this summer at PEMCO’s facilities at the Tampa International Airport.

Brad Heath, Managing Director of ATSG West Leasing, said, “We are very pleased to acquire, convert and lease these aircraft into the air express market in China. This initiative leverages the core capabilities of PEMCO, ATSG West Leasing and of our strategic partners in China.”

Okay Airways will operate the aircraft in support of its express services for e-commerce and other companies in the domestic China market. ATSG, Okay Airways, and Tianjin Dongjiang Investment holdings, a Tianjin government affiliate, are establishing a joint venture company to support the growing e-commerce market there.

Mike Andrews, PEMCO’s director of conversion programs, said, “We’re excited to be working with our affiliate ATSG West Leasing Limited and to be redelivering more PEMCO-converted aircraft into the Chinese market.”

PEMCO and its affiliates continue to lead the narrow-body freighter conversion market in China through conversions of 70 percent of China-based 737-300 and -400 freighters in service. Through its subsidiaries, including PEMCO and ATSG West Leasing Limited, ATSG provides aircraft leasing, air cargo lift, aircraft maintenance services, cargo conversion and airport ground services.

The 737-400 PEMCO-converted cargo aircraft features 11 pallet positions, up to 48,000 pounds of payload, and 4,600 cubic feet of total volume under PEMCO’s supplemental type certificate. The optimized center of gravity of PEMCO’s B737-400 freighter yields the highest possible usable payload and retains maximum best-in-class fuel efficiency for unbeatable range and operating economics. PEMCO’s 60-plus customers select the company’s passenger-to-freighter conversion services for its superior cargo door and system, superior operating functions, on-time turnaround, and a track record of 2 million hours of safe, reliable operation.