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Jazz Air Income Fund announces equity investment in South American regional airline, Pluna S.A.

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HALIFAX, Apr 26, 2010 (Canada NewsWire via COMTEX) --Second-fastest growing air travel market in the world

Jazz Air Income Fund (TSX: JAZ.UN, 'Jazz') announced today that it has agreed to invest $15 million (USD) in Latin American Regional Aviation Holding Corp. ('LARAH') in return for a 33 1/3% non-voting equity interest in the company. At the time of closing of Jazz's investment, LARAH will hold an indirect 75% equity interest in Pluna Lineas Aéreas Uruguayas S.A. ("Pluna"). The remaining 25% equity interest in Pluna is held, indirectly, by the Government of Uruguay. Jazz's $15 million USD investment, together with an additional $5 million USD which the Government of Uruguay has agreed to invest, will be used by Pluna to complete the business restructuring and to fund growth. The completion of Jazz's investment is subject to a number of closing conditions, including certain conditions relating to actions to be taken by the Government of Uruguay in connection with Jazz's investment. At closing, a Jazz representative will be appointed to the 7 member board of directors of Pluna.

Pluna is Uruguay's flagship airline and is headquartered in Montevideo. The airline is a private company and currently operates 6 CRJ 900 NextGen aircraft with 90-seat configuration to destinations in Uruguay, Argentina, Brazil, Chile and Paraguay. Pluna announced on April 14, 2010 that it has signed a follow-on firm order with Bombardier Aerospace for three additional CRJ900 NextGen regional jets and has taken options on an additional six CRJ900 NextGen aircraft. Pluna's target market, represented by a 2,500 km radius semi-circle around Montevideo, encompasses approximately 150 million people and more than 30 cities, each with a population of over 500,000 people.

"This investment provides the potential for significant returns for Jazz," said Joseph Randell, President and Chief Executive Officer, Jazz Air LP. "The South American air travel market is one of the world's fastest growing and this investment provides Jazz with an exciting opportunity to participate in that growth. We chose to invest in Pluna because we see the value and opportunity in the niche markets they serve, and we believe they have a solid business plan. The new, state-of-the-art airport terminal in Montevideo; Pluna's main hub, is a key component to the airline's future success as it provides excellent connecting passenger facilities. Further, Pluna's service extends beyond Uruguay to Argentina, Brazil, Chile and Paraguay and seeks to realize upon the growth potential in those markets. Jazz and Pluna have a common fleet type in the CRJ705/900 series regional jet, and both operate as regional carriers. We anticipate that our involvement with Pluna will produce other synergies that have the potential to create additional opportunities to generate value."

"Jazz has spent the last three years seriously considering and evaluating opportunities for diversification and growth, and we believe this transaction is another solid step in this direction," continued Mr. Randell. "Our recently announced new partnership with Thomas Cook Canada and the future addition of new Q400 NextGen turboprops that we'll fly on behalf of Air Canada, were the initial steps taken to broaden our horizons. We're confident in the Pluna team - the calibre of this group is second to none and we have great chemistry. We're also grateful for the tremendous support we've received thus far from the Government of Uruguay and other interested parties."

"We are very excited about this new partnership with Jazz," said Matias Campiani, Chief Executive Officer of Pluna. "Not only will this investment facilitate our growth plans, we believe that Jazz's operational expertise and experience will enable Pluna to realize upon synergies that will strengthen our business."

To assist our new partner with their growth plans and operations, a Jazz employee with significant operational experience is being seconded to Pluna for a minimum of one year as part of their senior management team. Cash distributions by the Jazz Air Income Fund are not affected by this development; funding for the investment is provided through general working capital.

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Investor Conference Call/Audio Webcast
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Jazz will hold an analyst call at 10:00 a.m. ET on Monday, April 26, 2010 to discuss the Pluna transaction. The call may be accessed by dialing 1.888.231.8191 or 647.427.7451 for the Toronto area. The call will be simultaneously webcast via: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3045020 or in the Investor Relations section of Jazz's website, www.flyjazz.ca. This is a listen-in only audio webcast. Media Player or Real Player is required to listen to the broadcast; please download well in advance of the call.