Jazz Air Income Fund announces increase in number of outstanding units in connection with distribution by ACE Aviation of units of Jazz Air Income Fund to its shareholders

    HALIFAX, March 2 /CNW/ - Jazz Air Income Fund (TSX: JAZ.UN) announced
today that in connection with a special distribution by ACE Aviation Holdings
Inc. (ACE) of units of Jazz Air Income Fund to its shareholders pursuant to a
statutory plan of arrangement approved in October 2006, ACE will exchange on
March 14, 2007, 25,000,000 units of Jazz Air LP for an equivalent number of
units of Jazz Air Income Fund. The exchange will be made in accordance with
the terms of the investor liquidity agreement entered into at the time of the
initial public offering of Jazz Air Income Fund. ACE has announced that the
units of Jazz Air Income Fund acquired by ACE as a result of the exchange will
be distributed to its shareholders as part of a special distribution.
    ACE will also exchange on March 14, 2007 an additional 25,000,000 units
of Jazz Air LP for 25,000,000 units of Jazz Air Income Fund in accordance with
the terms of the investor liquidity agreement.
    Further to such exchanges and after taking into account the special
distribution, Jazz Air Income Fund will have 75,638,223 units issued and
outstanding, of which 25,000,000 units will be held by ACE, and will hold a
61.6% interest in Jazz Air LP. ACE's direct interest in Jazz Air LP will be
reduced from 79.1% to 38.4% (58.8% aggregate interest).


    Certain statements in this news release may contain 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, by their nature, are based on assumptions 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, general uncertainties of the business and matters
that are not within the control of Jazz. 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. The forward-looking statements contained
herein represent Jazz's expectations as of the date they are made and are
subject to change after such date. However, Jazz 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 Jazz Air Income Fund

    Jazz Air Income Fund is an unincorporated, open-ended trust established
under the laws of the Province of Ontario, created to indirectly acquire and
hold an interest in the outstanding limited partnership units of Jazz Air LP.

    About Jazz Air LP

    Jazz Air LP (Air Canada Jazz) is the second largest airline in Canada
based on fleet size and the number of routes operated. Air Canada Jazz
operates more flights and flies to more Canadian destinations than any other
Canadian carrier. Air Canada Jazz forms an integral part of Air Canada's
domestic and transborder market presence and strategy.
    Air Canada Jazz and Air Canada are parties to a Capacity Purchase
Agreement (CPA) pursuant to which Air Canada currently purchases substantially
all of Air Canada Jazz's fleet capacity based on predetermined rates.
Air Canada Jazz provides all crews, airframe maintenance and, in some cases,
airport operations. In turn, Air Canada determines routes and controls
scheduling, ticket prices, product distribution, seat inventories, marketing
and advertising for these flights.
    Air Canada Jazz is not a typical airline. Currently, over 99% of
Air Canada Jazz's revenues are derived from the CPA. Air Canada Jazz is
isolated from most of the risks typically associated with airlines such as
fuel and navigation costs since these costs are passed through to Air Canada.
    Under the CPA with Air Canada, 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.
As of March 1, 2007, Air Canada Jazz operated scheduled passenger service on
behalf of Air Canada with approximately 819 departures per weekday to
57 destinations in Canada and 29 destinations in the United States with a
fleet of 135 aircraft.
    Air Canada Jazz is the focal point of Air Canada's regional passenger
strategy. Air Canada Jazz and Air Canada have linked their regional and
mainline networks in order to serve connecting passengers more efficiently and
to provide valuable feed traffic to Air Canada's mainline routes.