DISCOVERY AIR INC. (TSX: DA.A) ANNOUNCES $4.0 MILLION IN NET EARNINGS FOR ITS
THIRD QUARTER ENDED OCTOBER 31, 2010

YELLOWKNIFE, NWT, Dec. 13 /CNW/ - "I am pleased to report that Discovery Air's revenues and earnings in the third quarter and year-to-date, continued to reflect improved results over last year," said Dave Jennings, Discovery Air's President and CEO.

Third Quarter Financial Highlights 

• Revenues were $44.4 million for the quarter ended October 31, 2010 ("Q3 2011") and $128.7 million for the nine months ended October 31, 2010 ("year-to-date 2011") compared to revenues of $34.1 million and $105.4 million for the comparative periods last year.
• EBITDA was $13.2 million for Q3 2011 and $39.5 million for year-to-date 2011 compared to $9.9 million and $29.4 million for the comparative periods last year.
• Net earnings for Q3 2011 were $4.0 million or $0.03 per share ($0.03 diluted) compared to net earnings of $1.7 million or $0.01 per share ($0.01 diluted) for the same period last year.
• Net earnings for year-to-date 2011 were $11.9 million or $0.09 per share ($0.09 diluted) compared to $4.6 million or $0.03 per share ($0.03 diluted) for the same period last year.

"On a year-to-date basis, all operations in our two segments have contributed increased revenues, EBITDA and earnings over the prior year comparatives, demonstrating our operation's continuing efforts to grow our businesses," said Jennings.  "With the recent launch of our sixth operating unit, Discovery Air Technical Services, we continue to expand our revenue streams and I look forward to its contribution to our earnings in the upcoming quarters and years."

Additional Highlights

• The Corporation's consolidated revenues for Q3 2011 were $44.4 million, bringing year-to-date 2011 revenues to $128.7 million.  This represents an increase of 30% and 22%, respectively, over prior period comparatives ("Q3 2010" and "year-to-date 2010").  The year over year increase in the Corporation's Q3 2011 revenue was largely attributable to increased demand for the Government Services segment's services, which reported an 80% increase for Q3 2011 and a 16% increase for year-to-date 2011 over prior period comparatives.  The segment benefited from increased demand for airborne training and special mission services, increased basing fees and incremental revenues from MRO services.  The increase in quarterly revenues from this segment largely offsets the first quarter's low flight demands and highlights the segment's month to month variability due to short-term shifts in priorities within a year by its customers.  The Northern Services segment reported a 10% increase in revenues for Q3 2011 and a 26% increase in revenues for year-to-date 2011 over prior period comparatives.  This segment's revenue from the resource-based sector during Q3 2011 increased by 10%, due, in part, to contributions from the segment's operations in Peru.  The segment's year-to-date 2011 revenues from the resource-based sector increased by 41%, reflecting increased activity in the mining exploration-based sector in the North, which was severely and negatively affected by the economic downturn in fiscal 2010.   
• The Corporation's EBITDA of $13.2 million for Q3 2011 and $39.5 million for year-to-date 2011 represents a year over year increase of 33% and 34%, respectively.  The increase in EBITDA in Q3 2011 was largely attributable to increased revenues in the Government Services segment, offsetting the lower EBITDA from the Northern Services segment, which realized an earlier than expected seasonal decline in the resource sector in the North.  For year-to-date 2011, EBITDA was ahead of prior year comparatives by 36% for the Northern Services segment and 20% for the Government Services segment.   

The table below summarizes selected financial information for the current and comparative quarters and year-to-date figures:

(thousands of dollars, except per share amounts)					Q3 2011		Q3 2010		Year-to-date 2011		Year-to-date 2010
					(unaudited)		(unaudited)		(unaudited)		(unaudited)
Results of operations
	Revenue				$                 44,389		$                 34,125		$                128,693		$                105,424
	Operating expenses				$                 31,221		$                 24,072		$                  89,042		$                  74,384
	Earnings before undernoted items				$                 13,168		$                 10,053		$                  39,651		$                  31,040
	Interest and financing charges				$                   3,638		$                   3,585		$                  11,607		$                  11,738
	Amortization				$                   3,587		$                   3,501		$                  10,392		$                  10,304
	Relocation of corporate office				$                         -		$                      120		$                       158		$                    1,611
	Net earnings and comprehensive income				$                   4,018		$                   1,668		$                  11,904		$                    4,551
	Basic earnings per share				$                     0.03		$                     0.01		$                      0.09		$                      0.03
	Diluted earnings per share				$                     0.03		$                     0.01		$                      0.09		$                      0.03
Financial position and liquidity
	Total assets								$                270,520		$                262,895
	Total long-term debt								$                139,773		$                140,783
	Cash provided by operations				$                 18,825		$                 22,385		$                  11,480		$                  19,643
	Working capital								$                  28,991		$                  20,735
Key non-GAAP performance measures*
	EBITDAR				$                 15,916		$                 12,125		$                  47,447		$                  35,372
	EBITDA				$                 13,168		$                   9,933		$                  39,493		$                  29,429
	EBITDA Margin				30%		29%		31%		28%

* 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.  The EBITDA margin and EBITDAR margin are EBITDA and EBITDAR as a percentage of revenue.  Management believes EBITDA and EBITDAR to be important measures as they exclude the effects of items which primarily reflect the impact of long-term investment decisions from the performance of the Corporation's day-to-day operations.  Management believes these measurements are useful to measure a company's ability to service debt and to meet other payment obligations or as a valuation measurement.

FORWARD-LOOKING STATEMENTS

Forward-looking information and statements are included in this earnings release. Please refer to the statement regarding forward-looking statements contained in the Corporation's Management's Discussion and Analysis for Q3 2011 which is incorporated herein by reference. That statement provides an explanation as to what forward-looking statements are, and the factors, uncertainties and potential events that the Corporation has specifically identified for the attention of readers. When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.

The Corporation's interim financial statements and Management's Discussion and Analysis for Q3 2011 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.

Discovery Air's Class A common shares and debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB, respectively.

For further information:

Rolf S. Dawson, Vice President Corporate Finance and Administration
[email protected]
[phone], Extension 304

Sheila Venman, Investor Relations
[email protected]
1-866-903-3247