Discovery Air announces closing of $30 million public offering of convertible debentures and early redemption of existing convertible debentures

/NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES/

YELLOWKNIFE, NT, May 12 /CNW/ - Discovery Air Inc. ("Discovery Air") has completed its previously announced offering (the "Offering") of 8.375% convertible unsecured subordinated debentures (the "Convertible Debentures") to raise gross proceeds of $30 million. The net proceeds of the Offering of approximately $28.3 million, together with additional working capital from Discovery Air, will be used to redeem all of the existing 8.75% convertible unsecured subordinated debentures (the "Existing Debentures") of Discovery Air. To facilitate the redemption of the Existing Debentures, the net proceeds from the sale of the Convertible Debentures has been deposited into escrow. The Convertible Debentures were sold by a syndicate of underwriters led by GMP Securities L.P. and included Canaccord Genuity Corp., National Bank Financial Inc., Cormark Securities Inc. and PI Financial Corp. The Convertible Debentures will begin trading today on the Toronto Stock Exchange under the symbol "DA.DB.A".

Simultaneously with the closing of the Offering, Discovery Air has provided notice to Computershare Trust Company of Canada ("Computershare"), the trustee for the Existing Debentures, that it will redeem all of the Existing Debentures as of June 16, 2011.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

ABOUT DISCOVERY AIR AND ITS SUBSIDIARIES

Founded in 2004, Discovery Air is a specialty aviation services company operating across Canada and in select locations internationally. With over 130 aircraft, it is one of the largest air operators in Canada, employing more than 600 flight crew, maintainers and support staff to deliver a variety of air transport, maintenance and logistics solutions to a wide range of government, airline and business customers. Discovery Air's subsidiaries include: Top Aces, which delivers airborne training and special mission services to the Canadian military; Hicks & Lawrence, a supplier of airborne fire management services to the Ontario government and charter services to government agencies and corporate customers; Discovery Air Technical Services, which provides a range of aircraft maintenance, repair, overhaul, modification, engineering and certification services; Great Slave Helicopters, the second-largest VFR helicopter operator in the country; Air Tindi, the largest fixed-wing aircraft charter provider based in Northern Canada; Discovery Mining Services, which supplies all-weather exploration camps as well as expediting and logistics support services; and Discovery Air Innovations, the innovations arm of Discovery Air that identifies and captures large, new market opportunities.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Discovery Air's public communications may include written or oral forward-looking statements (as defined in applicable securities laws) regarding the future performance of the company and/or its subsidiaries. Forward-looking statements by definition are based on assumptions and are as a result subject to risks and uncertainties, including those identified in the Management's Discussion and Analysis section of Discovery Air's financial statements for the fiscal year ended January 31, 2011, available at www.sedar.com. As a result of such risks and uncertainties, actual results may differ materially from those discussed in forward-looking statements, and readers should not place undue reliance on such statements. Forward-looking statements represent expectations as of the date they are made, and Discovery Air disclaims any intention or obligation to update or revise any forward-looking statements it may make, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

Discovery Air's Class A common voting shares and the Existing Debentures currently trade on the Toronto Stock Exchange (Symbols "DA.A" and "DA.DB" respectively).


SOURCE Discovery Air Inc.

For further information:

Investor Relations
Sheila Venman
Investor Relations
sheilavenman@discoveryair.com
Toll Free (866) 903 3247

Rolf S. Dawson
Vice President, Corporate Finance & Administration
rolf.dawson@discoveryair.com
867-873-5350, Ext. 304


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