Jazz announces measures to combat rising fuel costs

    HALIFAX, July 3 /CNW/ - Today, Jazz Air LP ("Jazz") announced that it has
implemented a number of cost-saving initiatives and is taking additional
measures to combat rising fuel costs.
    Air Canada, Jazz's primary customer, announced on June 17, 2008, that it
would reduce network domestic and transborder capacity by 2% and 13%
respectively with the implementation of the fourth quarter 2008 and first
quarter 2009 schedules. As a result, Jazz's flying will be reduced by
approximately 5%.
    The decrease in Air Canada's need for Jazz's services necessitates a
reduction in staff of approximately 270 Jazz employees.
    "These are difficult times for our industry and the decision to reduce
our workforce was not reached lightly; it is with sadness that we'll see some
of our employees leave our company", said Joseph Randell, President and Chief
Executive Officer, Jazz. "We've grown very strong as a team and have overcome
many difficult challenges over the past number of years. Every effort is being
made to mitigate these job losses, and we hope this downturn in our industry's
cycle ends soon. We are in a period of great uncertainty and cannot predict
where the price of fuel is going. We have taken immediate action to better
match our resources with our new revenue levels. While Jazz is already a lean
organization and is in a reasonable position to manage its current challenges,
every effort is being made to reduce our costs and to prepare for what may lie
    Jazz has already established a number of fuel-saving initiatives,
recently froze all hiring and non-critical staff overtime, and instituted a
number of other cost-saving programs. Being a Six Sigma organization has made
Jazz a more efficient airline and the focus to ensure we remain competitive is
    Airlines are currently operating in a very high-cost environment
worldwide. In addition to soaring fuel prices, airlines in Canada must also
contend with federal and provincial fuel excise taxes, security fees,
NavCanada fees and airport charges that rank amongst the most expensive in the
world. It is important to recognize the severity of the situation facing the
entire aviation industry and ultimately our communities. All industry partners
should make every effort to operate as efficiently as possible without
compromising safety.


    Certain statements in this news release may contain statements which are
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 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, energy prices,
general industry, market and economic conditions, competition, insurance
issues and costs, supply issues, war, terrorist attacks, epidemic diseases,
changes in demand due to the seasonal nature of the business, the ability to
reduce operating costs and employee counts, employee relations, labour
negotiations or disputes, restructuring, pension issues, currency exchange and
interest rates, changes in laws, adverse regulatory developments or
proceedings, pending and future litigation and actions by third parties, as
well as the factors identified in the Risk Factors section of Jazz Air LP's
and Jazz Air Income Fund's restated annual MD&A dated February 19, 2008, and
interim MD&A dated May 7, 2008. The forward-looking statements contained in
this discussion represent Jazz's expectations as of July 3, 2008, 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

    Jazz is the second largest airline in Canada based on fleet size and the
number of routes operated. Jazz operates more flights and flies to more
Canadian destinations than any other Canadian carrier. Jazz forms an integral
part of Air Canada's domestic and transborder market presence and strategy.
Jazz is owned by Jazz Air Income Fund (TSX: JAZ.UN).
    Jazz is not a typical airline. The airline has a commercial agreement
with Air Canada that is the core of its business. Under the Capacity Purchase
Agreement (CPA), Air Canada currently purchases substantially all of Jazz's
fleet capacity based on predetermined rates. The CPA provides commercial
flexibility, low trip costs and connecting network traffic to Air Canada.
Also, the CPA reduces Jazz's financial and business risks, and provides a
stable foundation for day-to-day operations and future growth.

    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.

For further information:

For further information: Media Contact: Manon Stuart, (902) 873-5054
Halifax, www.flyjazz.ca

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