Chorus Aviation Inc. Announces Strong First Quarter 2012

Net income per share of $0.21
Consistent quarterly profitability since 2006

Chorus Aviation Inc. ("Chorus") (TSX: CHR.B CHR.A CHR.DB) today announced its first quarter 2012 earnings, with a net income of $26.4 million or $0.21 per share, and adjusted net income¹ of $23.0 million or $0.19 per share.

Q1 2012 HIGHLIGHTS

• Operating revenue of $437.1 million.
• Free Cash Flow¹ of $32.9 million, or $0.27 per share.
• Operating income of $29.9 million.
• Net income of $26.4 million, or $0.21 per share.
• Adjusted net income¹ of $23.0 million, or $0.19 per share.

"The first quarter performance was strong due to a mild winter and a two million dollar improvement in performance incentives, as well as our second season of Thomas Cook Canada flying all of which contributed to an eighty percent increase in net income - a great way to start the year," said Joseph Randell, President and Chief Executive Officer, Chorus. "Our employees continue to deliver a solid and safe operation; however, we remain mindful of the industry's challenges and continue to prepare accordingly."

Financial Performance -First Quarter 2012 Compared to First Quarter 2011

Operating revenue decreased from $443.0 million to $437.1 million, representing a decrease of $5.9 million or 1.3%.  The decrease in operating revenue was primarily due to a $13.7 million or 7.2% decrease in pass-through costs from $190.3 million to $176.6 million, which included $12.7 million related to fuel. Passenger revenue, excluding pass-through costs, increased by $7.2 million or 2.9% primarily as a result of a higher US dollar exchange rate, a $2.0 million increase in incentives earned under the Capacity Purchase Agreement (CPA) with Air Canada, and rate increases made pursuant to the CPA. Other revenue increased by $0.6 million.

Total operating expenses decreased from $421.4 million to $407.1 million, a decrease of $14.3 million or 3.4%.  Controllable costs decreased by $0.6 million, or 0.3%. Aircraft maintenance expense decreased by $4.2 million as a result of a decrease in engine maintenance activity due to the return of CRJ aircraft of $4.5 million; offset by the effect of the increase in the US-dollar exchange rate on certain material purchases of $0.3 million.  Other expenses decreased by $2.0 million primarily due to decreased general overhead expenses and professional fees.

Salaries, wages and benefits increased by $3.7 million due to the increased number of full time equivalent employees required for the Q400 operation, wage and scale increases under new collective agreements, increased pension expense resulting from a revised actuarial valuation, and increased incentive compensation expense.

Non-operating expenses decreased $2.2 million.  This change was mainly attributable to a foreign exchange gain of $3.7 million (of which $3.4 million was related to an unrealized foreign exchange gain on long-term debt and finance leases) arising as a result of the change in value of the Canadian dollar relative to the US dollar; offset by increased interest expense related to the Q400 aircraft financing.

EBITDA¹ was $42.9 million compared to $31.3 million in 2011, an increase of $11.6 million or 37.0%.  Free Cash Flow was $32.9 million, an increase of $7.8 million or 31.1% from $25.1 million.

Operating income of $29.9 million for the three months ended March 31, 2012, was up $8.3 million or 38.8% over first quarter 2011 from $21.6 million. The increase in operating income was due to the combined effect of the Chorus Leasing companies, a $2.0 million increase in performance incentives and the Thomas Cook Canada operation. Net income for the first quarter of 2012 was $26.4 million or $0.21 per share.

Chorus Aviation Inc.'s unaudited interim condensed consolidated financial statements for the three months ended March 31, 2012, and accompanying Management's Discussion and Analysis (MD&A) are available at www.chorusaviation.ca and at www.sedar.com.  A copy may also be obtained on request by contacting Investor Relations at:  This email address is being protected from spambots. You need JavaScript enabled to view it. or (902) 873-5094.

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 12:00 p.m. ET on Tuesday, May 15, 2012 to discuss the first quarter results.  The call may be accessed by dialing 1-888-231-8191.  The call will be simultaneously audio webcast via: www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3814140 or in the Investor Relations section at www.chorusaviation.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 Chorus's Investor Relations website at www.chorusaviation.ca.  A playback of the call can also be accessed until midnight ET, May 22, 2012, by dialing (416) 849-0833 or toll-free 1- 855-859-2056, and passcode 70847710# (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 expenses.  Management believes EBITDA assists investors in comparing Chorus' 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 of cash flows which form part of the financial statements.

FREE CASH FLOW
Pre-conversion distributable cash was a key performance indicator used by management to evaluate the ongoing performance of Jazz Air Income Fund.  Distributable cash is not a measure which is commonly utilized in respect of a public corporation. Management believes, however, that it is a term with which its shareholders are familiar and has provided Free Cash Flow as a proxy for previously reported distributable income.  Free Cash Flow is calculated in the same manner as distributable cash. Free Cash Flow is defined as EBITDA less non-operating expenses, Maintenance Capital Expenditures to sustain the operation, and adjusted for any unrealized foreign exchange gain or loss on long-term debt and finance leases and any unusual non-operating one-time items.  Other capital expenditures incurred to facilitate growth of the business are excluded from this calculation.

ADJUSTED NET INCOME
Adjusted net income and adjusted earnings per share are calculated by adjusting net income by the amount of any unrealized foreign exchange gains and losses on long-term debt and finance leases.  During the first quarter of 2012, Chorus recorded $3.4 million gain in unrealized foreign exchange on long-term debt and finance leases.  This adjustment more clearly reflects earnings from an operating perspective.

Caution regarding forward-looking information

This news release should be read in conjunction with Chorus' unaudited interim condensed consolidated financial statements for the three months ended March 31, 2012 and MD&A dated May 14, 2012, filed with Canadian Securities regulatory authorities (available at www.sedar.com).

Certain statements in this news release may contain statements which are forward-looking. 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 Chorus' 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, leverage and restructure covenants in future indebtedness, dilution of Chorus shareholders, uncertainty of dividend payments, managing growth, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties. The forward-looking statements contained in this discussion represent Chorus' expectations as of May 14, 2012, and are subject to change after such date. However, Chorus disclaims 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.

About Chorus Aviation Inc.

Chorus Aviation Inc. ("Chorus") was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Aviation LP, Chorus Leasing I Inc., Chorus Leasing II Inc., and Chorus Leasing III Inc. (the leasing companies own the Q400 aircraft) and 7503695 Canada Inc. (which holds Chorus' investment in Latin American Regional Aviation Holdings Corp., which in turn holds a 75% indirect equity interest in South American regional carrier, Pluna).

Chorus is traded on the Toronto Stock Exchange under the trading symbols of CHR.A, CHR.B and CHR.DB.

For more information, visit www.chorusaviation.ca

About Jazz Aviation LP

Jazz Aviation LP has a strong history in Canadian aviation with its roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation Inc. and continues to generate some of the strongest operational and financial results in the North American aviation industry.

There are two airline divisions operated by Jazz Aviation LP:  Air Canada Express and Jazz.

Air Canada Express:  Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. Jazz currently operates scheduled passenger service on behalf of Air Canada with over 790 departures per weekday to 83 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft.

Jazz:  Under the Jazz brand, the airline offers charters throughout North America with a dedicated fleet of five Bombardier aircraft for corporate clients, governments, special interest groups and individuals seeking more convenience.  Jazz also has the ability to offer airline operators services such as ground handling, dispatching, flight load planning, training and consulting.

For more information, visit www.flyjazz.ca.