In a simulation, Mike is in a jet fighting St. John in Airwolf, defeating him in the test. It's all in preparation for an upcoming mission to extract a double agent and Mike look-a-like named Klaus Hertzfeld from behind the Iron Curtain. The crew goes over the plan at St. John's apartment, but it's cut short, since Klaus's arrival to rendezvous at a French airshow was moved up.
At the airshow, Mike is making himself up to look like Klaus. Outside, Captain Klaus Hertzfeld arrives, soon followed by Dr. Victor Hessler. Suspecting that Klaus is a double agent, he's brought along Klaus's wife, Katharina, whom he's holding hostage to prevent Klaus from defecting. Klaus is taken to the locker room, where he makes the switch with Mike.
Outside, Katharina can immediately tell that Mike is an imposter, but he keeps her quiet as to not give him away. St. John watches them closely as they're driven to the tarmac, where Mike boards a jet fighter and takes off. Klaus gives Jason a tape containing information about a Company mole, and both he and Jo go to a tent where Airwolf is hidden to view the construction of missiles and who their mole is, while Mike distracts everyone with his aerobatics. There is a trio of terrorists, Strauss, Elan, and Achmed, also watching and waiting to grab who they think is Klaus when he lands.
Mike begins to have problems in the jet fighter, going into a dive and unable to recover. They have Klaus give an emergency assist, guiding Mike to the stabilizer switch to regain flight. After Mike lands, the terrorists make their move and pull up next to him, forcing him and Katharina into their van. They take off from the airshow with Hessler chasing them.
Jo and Klaus steal a car to go after them, while Jason and St. John take to the air in Airwolf. Tracking Mike's helmet, which has a hidden microphone, they're able to pick them up on Airwolf's scanners. Katharina nearly blows Mike's cover, then Elan discovers the microphone and throws the helmet out the window. She then knocks Mike and Katharina unconscious. With Hessler gaining on them, Elan throws a grenade, sending his car up in a fireball.
Later, the terrorists pull into a wooded area and switch cars, leaving a bomb inside the van. They drive further down the road and hide Mike and Katharina in a farmhouse. Jo and Klaus find the van, and are thrown to the ground and knocked unconscious when it explodes. They later wake up and get back on the trail.
A man named Omar, leader of the terrorists, arrives at the farmhouse in a Hughes chopper. Thinking Mike is Klaus, he uses Katharina to force him to agree to train his men how to fly fighters like the one he flew in the airshow. St. John and Jason locate the farmhouse just as Jo and Klaus pull up there. As Omar has everyone board the chopper, they see Jo and Klaus approaching and a gunfight ensues. Klaus is shot in the arm.
St. John flies in with Airwolf and fires chain guns to distract them. Mike and Katharina hide in the farmhouse, with Achmed following. Jo shoots and kills Elan. As Omar takes off in his chopper, Mike is preparing to help Jo shoot it down when Achmed swats his gun away. They fight over the gun and roll out of sight, with the gun going off. St. John and Jason catch up to Omar's chopper, which gets behind them, shooting relentlessly. As Jo cautiously approaches the farmhouse, Mike reveals himself as the victor after fighting over the gun. St. John does a U-turn and gets behind the chopper. He fires a missile, blowing up the copter and sending it falling into a fireball.
Everything safe, Klaus and Katharina reunite and embrace, as well as Jo and Mike. Back at St. John's apartment, they're happy to hear that Klaus and Katharina were granted refugee status, thanks to Jason. They have a toast to the occasion, but due to the poor quality of champagne, they opt for a beer instead.