Avcorp started proceedings over Termination for Convenience

VANCOUVER, May 3 /CNW/ - Avcorp Industries Inc. (the Company) announces that it has filed a "Motion to Institute Proceedings" in Quebec Superior Court today.

Avcorp is seeking compensation in excess of $18,000,000 for unrecovered costs incurred in accordance with the termination for convenience provisions of a contract for the CRJ700 program.

The contract with Avcorp was terminated by Bombardier in 2007.

Mark van Rooij, CEO of Avcorp, stated: 'It is with much regret that we had to take this step to serve the best interest of the Company and its stakeholders. In the discussions we conducted with Bombardier over the last few months we were not able to reach an acceptable settlement. We are confident that we will receive a fair decision through this process.'

About Avcorp

Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including Boeing, Bombardier, and Cessna. With more than 50 years of experience, 473 skilled employees and 354,000 square feet of facilities, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower-cost, light-weight, strong, reliable structures. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).

MARK VAN ROOIJ

CHIEF EXECUTIVE OFFICER

Forward-Looking Statements

Certain statements in this release and other oral and written statements made by the Company from time to time are forward-looking statements, including those that discuss forecasted revenues and financing requirements. These forward-looking statements based on management's projections of customer orders and operating needs, and are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: (a) the extent to which the Company is able to achieve savings from its restructuring plans; (b) uncertainty in estimating the amount and timing of restructuring charges and related costs; (c) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (d) the occurrence of work stoppages and strikes at key facilities of the Company or the Company's customers or suppliers; (e) government funding and program approvals affecting products being developed or sold under government programs; (f) cost and delivery performance under various program and development contracts; (g) the adequacy of cost estimates for various customer care programs including servicing warranties; (h) the ability to control costs and successful implementation of various cost reduction programs; (i) the timing of certifications of new aircraft products; (j) the occurrence of further downturns in customer markets to which the Company products are sold or supplied or where the Company offers financing; (k) changes in aircraft delivery schedules or cancellation of orders; (l) the Company's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (m) the availability and cost of insurance; (n) the Company's ability to maintain portfolio credit quality; (o) the Company's access to debt financing at competitive rates; and (p) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies.

For further information: Sandi DiPrimo, Investor Relations Contact, [phone]