Aerojet-General Corporation and United States Air Force successfully conducted a full-scale, full-duration static test of Aerojet's Advanced Second Stage (A2S) motor. All test objectives were fully achieved. Aerojet developed the large solid propellant rocket motor on the Propulsion Application Program (PAP) under contract to the 526th ICBM Systems Group at Hill AFB, Utah. The test was conducted at simulated altitude conditions, essentially zero atmospheric pressure, by the Air Force's Arnold Engineering Development Center in Tullahoma, Tenn. The purpose was to measure true motor performance in a flight-like environment. The PAP program's primary goal is to develop a new generation of ICBM-sized motors with increased propulsion performance and lower manufacturing and operational costs. In order to meet these goals, the A2S design consists of numerous new technologies and manufacturing materials and processes including a graphite composite case fabricated with environmentally friendly materials, a low-cost movable nozzle capable of six degrees of thrust vector control, Honeywell-supplied electrical-mechanical actuators and digital controller, and high energy solid propellant developed at Aerojet's Sacramento, Calif. facility.

Alabama Aircraft Industries Inc. announced that its subsidiary, AAII-Birmingham has won its case filed on June 26, 2008 in the U.S. Court of Federal Claims against the United States Air Force and The Boeing Company which challenged the Air Force's selection of Boeing for a $1.1 billion contract to perform PDM services on KC-135 aircraft. The Court set aside the Solicitation and enjoined the Air Force from proceeding with the award to Boeing requiring that the Air Force must resolicit the procurement and take the necessary steps in a new solicitation to address explicitly the role of an ever-aging KC-135 fleet on the PDM to be performed.

Alabama Aircraft Industries Inc. (AAII) announced that it will be filing a lawsuit in the United States Court of Federal Claims challenging the United States Air Force's selection of Boeing for a $1.1 billion contract to maintain the fleet of KC-135 refueling tankers. On December 27, 2007, the Government Accountability Office (GAO) sustained in part a protest filed by AAII. The GAO found that last minute and unexplained changes in Boeing's proposed prices raised issues of price realism and proposal risk. On February 1, the GAO again ruled in AAII's favor on these issues, denying the Air Force Request for Reconsideration. Despite the GAO's December 27 and February 1 decisions, on June 13 the GAO denied AAII's request for further relief and the Air Force has decided to press forward with an award to Boeing. AAII's firm belief is that, if proposals were evaluated fully and reasonably, it would be selected due to its past contract performance, lower price and consistently higher quality in maintaining the KC-135 fleet. AAII has decided to pursue this matter in Court because the Air Force failed to take appropriate corrective action in response to the GAO's December 27 and February 1 decisions. AAII is asking the Court of Federal Claims to order the Air Force to conduct a full and proper evaluation and to ensure compliance with applicable law.