January 28, 2005

Contact: John Gioffre

Chief Financial Officer

3524 Airport Road

Maiden, NC 28650

FOR IMMEDIATE RELEASE

AIR T, INC. REPORTS UNAUDITED THIRD QUARTER RESULTS

MAIDEN, NC - Air T, Inc. (AirT) (NASDAQ: AIRT) today reported unaudited consolidated net earnings of $485,000 ($0.18 per share) for fiscal 2005’s third quarter ended December 31, 2004, compared to net earnings of $230,000 ($0.08 per share) for the third quarter of fiscal 2004. Consolidated revenues for fiscal 2005’s third quarter was $18,334,000 compared to $12,980,000 for the similar 2004 fiscal quarter. Nine-month, year-to-date, consolidated revenues increased $12,127,000, to $49,786,000, while net earnings increased $620,000 to current year-to-date net earnings of $1,557,000.

AirT’s fiscal 2005’s net earnings for the three- and nine-month periods ended December 31, 2004 are, respectively, comprised of $485,000 and $1,557,000 in net earnings from continuing operations, which include residual costs associated with the discontinued operation of the aviation parts and services business segment while the periods ended December 31, 2003 are, respectively, comprised of $309,000 and $1,365,000 in earnings from continuing operations, offset, respectively, by $79,000 and $428,000 in losses from discontinued operations.

The current three- and nine-month periods ended December 31, 2004 increased revenues resulted from increased ground equipment revenues. The increased net earnings were due to increased ground equipment segment earnings during the current periods and losses on the discontinued operations of the Company’s aviation parts and service segment incurred in the prior periods ended December 31, 2003. The equipment sector’s increase net earnings were partly offset by a net earnings decrease in the air cargo sector. The net earnings decrease in air cargo was due to a combination of temporarily decreased administrative fees and higher levels of current period administrative costs. The current periods reduction in administrative fees resulted from delays in its customer’s introduction of newer technology aircraft, currently undergoing conversion to cargo configuration, as older cargo aircraft are phased out of service. Administrative costs increased as additional staffing has been put in place to oversee the phase-in of the newer aircraft and route expansion.

Walter Clark, Chairman and Chief Executive Officer of AirT, stated, “Company management is pleased that increased aviation equipment orders, associated with the US Air Force’s three-year extension of its procurement contract with AirT’s Global subsidiary, has helped bolster AirT earnings this quarter. The diversification program AirT initiated in 1996 has allowed the Company to reduce risk and to take advantage of economic factors and market conditions within different segments of the aviation industry.”

AirT, through its subsidiaries, provides overnight air freight service to the express delivery industry and manufactures and services aviation and other specialized equipment. AirT is one of the largest small aircraft air cargo operators in the United States and currently operates a fleet of single and twin engine turbo-prop aircraft nightly in the eastern half of the United States and Canada, South America, Puerto Rico and the Virgin Islands.

Statements in this press release, which contain more than historical information, may be considered forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which are subject to risks and uncertainties. Actual results may differ materially from those expressed in the forward-looking statements because of important potential risks and uncertainties, including but not limited to the effects of economic, competitive and market conditions in the aviation industry, the continuing impact of terrorist activities and threats, continuation of contracts with the significant customer of the company’s air cargo segment, market acceptance of new products and services and changes in government regulations or technology. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

	Three Months Ended					Nine Months Ended
		12/31/04		12/31/03			12/31/04		12/31/03
Continuing Operations Revenues	$	18,334	$	12,980		$	49,786	$	37,659
Earnings from Continuing Operations		485		309			1,557		1,365
Loss from Discontinued Operations		-		(79	)		-		(428	)
Net Earnings	$	485	$	230		$	1,557	$	937
Net Earnings (Loss) Per Share - Diluted
Continuing Operations	$	0.18	$	0.11		$	0.58	$	0.50
Discontinued Operations		-		(0.03	)		-		(0.16	)
Total Net Earnings Per Share _Diluted	$	0.18	$	0.08		$	0.58	$	0.34
Average Common Shares Outstanding		2,694		2,748			2,700		2,731