Jazz Air Income Fund announces 2Q2010 financial results

The following are highlights of the financial performance.

 Q2 2010 FINANCIAL HIGHLIGHTS
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 - Operating revenue of $359.0 million.
 - Operating income of $18.8 million.
 - Net income of $15.6 million.
 - Distributable cash(1) of $28.8 million.
 - Payout ratio of 63.9%.
 Q2 2010 CORPORATE HIGHLIGHTS
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 - Finalized purchase agreement for Q400 NextGen aircraft.
 - Signed flight services agreement with Thomas Cook Canada Inc.
 - Completed investment in Latin American Regional Aviation Holding Corp.
 - Finished collective bargaining process with major labour groups.
 - Added one CRJ-200 aircraft to the charter fleet.

"We have made significant progress building upon our growth initiatives, and now with our new long term collective agreements in place, we have greater stability and predictability," said Joseph Randell, President and Chief Executive Officer of Jazz. "The second quarter of 2010 has been busy and productive. Jazz employees have truly gone above and beyond to reach these important milestones, and I sincerely thank them for their perseverance and dedication. We have an amazing team."

Financial Performance - Second Quarter 2010 Compared to Second Quarter 2009

Operating revenue was $359.0 million, compared to $373.6 million, representing a decrease of $14.6 million or 3.9%. The decrease in operating revenue was attributable to a lower US dollar exchange rate; a 4.9% reduction in Billable Block Hours, a 3.0% reduction in departures, and a reduction in the mark-up charged by Jazz under the CPA (which became effective on August 1, 2009), offset by rate increases made pursuant to the CPA, and an increase in pass-through costs under the CPA.

Total operating expenses decreased from $336.9 million to $332.1 million, a decrease of $4.8 million or 1.4%. Aircraft fuel costs increased by $9.3 million due to an increase of $12.2 million in the cost of fuel, offset by a $2.9 million decrease in fuel usage due to a reduction in the number of Block Hours. Aircraft maintenance expense decreased by $3.5 million as a result of: the effect of the lower US dollar exchange rate on certain material purchases of $2.1 million; and a decrease in Block Hours flown of $2.0 million; offset by other maintenance costs of $0.6 million.

Non-operating expenses amounted to $3.2 million, representing an increase of $2.4 million. This change was mainly attributable to a net increase in interest expense relating to the issuance of convertible debentures by Jazz in November 2009, a foreign exchange loss arising as a result of the change in the value of the Canadian dollar relative to the US dollar, and a reduction in gain on disposal of property and equipment.

EBITDA(1) was $34.0 million compared to $44.3 million in 2009, a decrease of $10.3 million or 23.3%. Operating income, before the amortization of the CPA asset, of $26.9 million represents a reduction of $9.8 million or 26.8%. Distributable cash was $28.8 million, down $11.8 million or 29.0% from $40.6 million.

Net income for the second quarter of 2010 was $15.6 million compared to $25.4 million in 2009, a decrease of $9.8 million or 38.6%.

Jazz Air Income Fund's unaudited interim consolidated financial statements for the period ended June 30, 2010, and accompanying Management's Discussion and Analysis (MD&A) are available on Jazz's website www.flyjazz.ca and at www.sedar.com. A copy may also be obtained on request by contacting Jazz's Investor Relations at: investorsinfo@flyjazz.ca or (902) 873-5094

Quarterly Investor Conference Call / Audio Webcast

Jazz will hold an analyst call at 9:30 a.m. ET on Wednesday, August 4, 2010 to discuss the second quarter 2010 financial results of Jazz Air Income Fund. The call may be accessed by dialing 1-888-231-8191. The call will be simultaneously audio webcast via: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3134340 or in the Investor Relations section of Jazz's website at 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.

The conference call webcast will be archived on Jazz's Investor Relations website at www.flyjazz.ca. A playback of the call can also be accessed until midnight ET, Wednesday, August 11, 2010, by dialing (416) 849-0833 or toll-free 1-800-642-1687, and passcode 86463147# (pound key).

(1)Non-GAAP Financial Measures

EBITDA

EBITDA (earnings before interest, taxes, depreciation, amortization and obsolescence) is a non-GAAP financial measure commonly used throughout all industries to view operating results before interest expense, interest income, depreciation and amortization, gains and losses on property and equipment and other non-operating income and expense. Management believes EBITDA assists investors in comparing Jazz's performance on a consistent basis without regard to depreciation and amortization, which are non-cash in nature and can vary significantly depending on accounting methods and non-operating factors such as historical cost. EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact on working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statement on cash flows.

DISTRIBUTABLE CASH

Distributable cash is a non-GAAP measure generally used by Canadian open-ended trusts as an indication of financial performance. It should not be seen as a measurement of liquidity or a substitute for comparable measurements prepared in accordance with GAAP. Distributable cash may differ from similar calculations as reported by other entities and, accordingly, may not be comparable to distributable cash as reported by such entities. Readers should refer to Jazz's and Jazz Air Fund's Management Discussion and Analysis for a reconciliation of distributable cash to cash provided by operating activities.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This news release should be read in conjunction with the Fund's audited consolidated financial statements for the period ended June 30, 2010 and MD&A dated August 3, 2010, filed with Canadian Securities regulatory authorities (available at www.sedar.com).

Certain statements in this news release may contain statements which are forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking statements, by their nature, are based on assumptions, including those described below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, risks relating to Jazz's relationship with Air Canada, risks relating to the airline industry, energy prices, general industry, market credit and economic conditions, competition, insurance issues and costs, supply issues, war, terrorist attacks, epidemic diseases, acts of God, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs and employee counts, secure financing, employee relations, labour negotiations or disputes, restructuring, pension issues, currency exchange and interest rates, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties, as well as the factors identified in the Risk Factors section of the Fund's MD&A dated August 3, 2010. The forward-looking statements contained in this discussion represent the expectations of the Fund and Jazz as of August 3, 2010, and are subject to change after such date. However, the Fund and Jazz disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.