News
Discovery Air Inc. announces results ended Oct. 31, 2009

Dec. 15, 2009 –



For several quarters our management team has
demonstrated their ability to manage the business with precision in challenging
conditions. I am pleased to report that our trend of improved year-over-year
EBITDA margin, cash flow, and liquidity has continued this quarter despite
significant revenue challenges.

Having optimized our operating expense levels
and strengthened our cash flow position, our management team is now focused on
increasing revenue, even in current conditions. Our efforts over the past year
have positioned us to drive forward the Corporation's over-arching objective of
achieving meaningful long-term improvement in earnings per share. Over the next
several quarters our management team will leverage our sound business position
by focusing on sales and business development, and by focusing on an
appropriate capital structure to allow us to achieve our over-arching
objective.


Financial Highlights


Weak market conditions continued
to affect Discovery Air Inc. ("Discovery
Air" or "Corporation") with revenues for both the third quarter and year-to-date
being 20% lower than the prior year comparatives. The lower
revenues reflect the impact of a significant  slowdown in resource
sector activity as well as weak forest fire activity in some of the
major fire related markets the Corporation services. Discovery Air
also recorded lower Government Services segment revenues in the
current quarter, compared to the prior year largely due to a shift
in customer scheduling priorities which contributed to lower
segment flight hours and revenues year over year. Despite the
quarterly year over year decline in revenues, year-to-date Government
Services segment revenues exceed the prior year comparative by $6.0
million or 16%. This increase partially offset the lower
revenues from some of the markets serviced by the Northern Services
segment.

EBITDA for the quarter and
year-to-date of $9.9 million and $29.4 million was 5% and
9% lower, respectively, than the prior year. While much lower revenue
levels for the current quarter and year-to-date had
a negative impact on consolidated EBITDA, the full impact of lower revenues
was partially offset by significant cost reductions undertaken to
align operating expenses with the expectation for lower
revenue levels this fiscal year.

Adjusted EBITDA, which adjusts
for the non-recurring corporate office relocation charge, was
$10.1 million and $31.0 million for the quarter and year-to-date
respectively, representing a year over year decrease of 4% for both
periods.

 Net earnings for the quarter and
year-to-date were $1.7 million and $4.6 million,
respectively, reflecting a year over year decrease in net earnings of $0.9
million and $4.2 million. The net earnings reflect lower levels of
operating profit, increased cost of debt financing, and a one
time charged related to the relocation of the corporate head office
from London, Ontario to Yellowknife. To date, Discovery Air has
incurred $1.6 million of expenses related to the head office relocation.

Discovery Air continued to
maintain a stable financial position. As at October 31, 2009,
Discovery Air's balance sheet recorded unrestricted cash of
$6.7 million and it also had $14.3 million of unused borrowing
capacity on its line of credit available to fund its operations.

The table below summarizes selected financial
information for the three months and nine months ended October 31, 2009 as well
as the comparative periods:


References to "EBITDA" are to net earnings before interest, financing transaction costs,
income taxes, depreciation and amortization (except for amortization
of rotable and overhauled components which are treated as operating
expenses), goodwill and intangible asset impairment charge, and
non-controlling interest. "EBITDAR" is EBITDA  before aircraft lease
cost. "Adjusted EBITDA" is EBITDA before corporate office charge.
"Adjusted EBITDAR" is EBITDAR before corporate office charge.
"Adjusted earnings" is net earnings before charges arising from
impairment of goodwill and intangible assets, relocation of corporate
office and related income tax recovery.

"Adjusted EBITDA
margin" is Adjusted EBITDA expressed as a percentage of revenues.

The Corporation's interim financial statements
and Management's Discussion and Analysis for the quarter ended October 31, 2009
have been filed concurrently and are available on Discovery Air's website at www.discoveryair.com
and on SEDAR at www.sedar.com.
The reader is encouraged to review the interim financial statements and
Management's Discussion and Analysis for more complete disclosure on Discovery
Air's financial condition and results of operations.