TMX group

Net Income of $39 million

HALIFAX, Nov. 9 /CNW/ - Today, Jazz Air Income Fund (TSX: JAZ.UN) ("Jazz
Air Fund") announced that commencing January 1, 2007, the Trustees of the Fund
have approved an increase in monthly cash distributions to unitholders from
the current level of $0.0729 per fund unit, equivalent to $0.875 on an
annualized basis, to $0.0838 per fund unit, equivalent to $1.00 on an
annualized basis, representing an increase of 15%. It is expected that the
first cash distribution with the 15% increase will be paid on February 15,
2007 for unitholders of record at the close of business on January 30, 2007.
The decision to increase cash distributions was made in light of Jazz Air
LP's ("Air Canada Jazz") continuing strong financial performance. It is
expected the Board of Directors of Jazz Air Holding GP Inc. and the Trustees
of the Fund will periodically review cash distributions taking into account
the current and prospective performance of Air Canada Jazz.
Today, Jazz Air Fund also announced the third quarter results of Air
Canada Jazz, with a net income of $39.1 million - an improvement of 6.1% over
the same quarter in 2005. These results were generated under a Capacity
Purchase Agreement (CPA) with Air Canada that became effective January 1,
2006. Jazz Air Fund has a 20.3% ownership interest in Jazz Air LP.

Q3 2006 HIGHLIGHTS
------------------

<<
  - Operating revenue of $369.3 million, up 34.7%.
  - EBITDAR(1) of $79.3 million, up 23.6%.
  - Operating income of $39.2 million, up 2.9%.
  - Net income of $39.1 million, up 6.1%.
  - Distributable cash(1) of $37.0 million.
  - Unit cost reductions achieved in all expense categories except fuel,
    which is a pass-through cost to Air Canada, and aircraft rent.
>>

"While our financial results again demonstrate the stability of our
business model and are ahead of plan this quarter, we are focused on
opportunities for improvement as our operational performance was challenged by
many factors," said Joseph Randell, President and Chief Executive Officer of
Air Canada Jazz. "Further, the increase in cash distributions effective
January 1, 2007 is a testament of our confidence in the strength of our
business."

Financial Performance
---------------------

For the third quarter of 2006, operating revenue was $369.3 million,
compared to $274.2 million in the same period of 2005, representing an
increase of $95.0 million or 34.7%. The increase in revenue is attributable to
a net increase of 24 aircraft operated by Jazz, a 25.3% increase in the Block
Hours flown and a $50.4 million increase in pass-through costs, including fuel
costs which are reimbursed by Air Canada on an at cost basis. For the
three-month period ended September 30, 2006, performance incentives payable by
Air Canada to Air Canada Jazz under the CPA amounted to $1.6 million or 0.7%
of Jazz's Scheduled Flights Revenue as compared to $3.4 million or 1.9% for
the same period in 2005. The decrease is the result of Jazz's lower
achievement level of performance targets set out in the CPA. Performance is
expected to recover in the last quarter of this year.
Year over year for the third quarter, other revenue increased from
$2.1 million to $2.3 million ($0.4 million of which relates to operations
covered under the CPA). Other revenue is derived from charter flights,
maintenance, repair and overhaul (MRO) operation and other sources of revenue
such as groundhandling services and flight simulator revenue. Jazz continues
to focus on developing its other revenue and believes that it is well equipped
to expand its charter operations with the fleet becoming fully operational.
In line with the growth in revenue, total operating expenses increased by
$93.9 million or 39.8% compared to the third quarter of 2005. Pass-through
fuel expense to Air Canada increased by $33.0 million or 63.2% due to an
increase of $8.6 million in the price of fuel and a $24.4 million increase in
fuel usage which results from the 25.3% increase in Block Hours flown.
Aircraft rent increased by $13.1 million or 59.5% over the third quarter
mainly due to the six CRJ-200s, three CRJ-705s and nineteen CRJ-100s that were
received in September 2005 to September 2006, which accounted for
approximately $15.4 million of the variance. The aircraft rent expenses were
offset by the termination of four Dash 8 operating aircraft leases of
$0.6 million and foreign exchange gain of $1.7 million. These cost increases,
fuel and aircraft rent, account for 49.0% of the total increase in operating
expenses for the period. Capacity, as measured by available seat miles (ASM),
increased by 46.4%. Costs per available seat mile (CASM), as measured by
operating expenses per ASM, decreased by 4.3%. Unit cost reductions were
achieved in all expense categories except fuel and aircraft rent.
For the third quarter of 2006, EBITDAR was $79.3 million compared to
$64.2 million in the third quarter 2005, an increase of $15.1 million or
23.6%. This improvement was achieved through increased capacity and cost
control. The operating income of $39.2 million represents an improvement of
$1.1 million or 2.9%. In the quarter, estimated distributable cash was
$37.0 million.
In the third quarter of 2006, non-operating expenses amounted to
$0.1 million, a decrease of $1.1 million from 2005. The cost savings are
mainly due to the restructuring of long-term debt of Air Canada Jazz after the
initial public offering of Jazz Air Fund and increased interest income from
short term investments, offset by a gain on disposal of fixed assets in the
prior period.
Net income for the third quarter was $39.1 million compared to
$36.8 million recorded in the third quarter last year, an improvement of
$2.3 million or 6.1%. As outlined above, the increase is due to the larger
fleet and effective cost control.
Air Canada Jazz's and Jazz Air Fund's unaudited interim consolidated
financial statements for the period ended September 30, 2006 and accompanying
Management's Discussion and Analysis (MD&A) are available on Air Canada Jazz's
website www.flyjazz.ca and at www.sedar.com. A copy may also be obtained on
request by contacting Air Canada Jazz's Investor Relations at:
investorsinfo(at)flyjazz.ca or (902) 873-5000.

Recent Events
-------------

Proposed Legislation Change for Income Trusts

On October 31, 2006, federal Finance Minister Jim Flaherty announced
proposed legislation to change the tax rules governing income trusts. Jazz
continues to assess the full implications of this proposed legislation.

People

For the year-to-date ended September 30, 2006, Jazz had an average of
4,102 full time equivalent (FTE) employees compared to an average of 3,509 FTE
employees in 2005. This reflects a 16.9% increase over the same period of
2005. The increase in the number of employees is due to growth in the fleet
and capacity as measured by ASMs. Specifically, departments such as In-flight
Services, Flight Operations, and Maintenance and Engineering grew by 31.7%,
19.7% and 11.8% respectively. Management carefully monitors growth and these
employment increases are considered appropriate with capacity growth of 62.2%
as measured by ASMs year to date, resulting in a 38.8% improvement in ASMs per
employee compared to the prior year.

Wage Reviews with Teamsters Canada and Canadian Air Line Dispatchers
Association

Negotiations with Teamsters Canada, who represent approximately
740 flight attendants, began in early August 2006 and Arbitrator Michel Picher
released his wage re-opener award on October 31, 2006.
Aside from modest fixed adjustments to the scales applicable to employees
hired after July 31, 2003, Mr. Picher's award granted Teamsters-represented
employees a 1.00% wage increase effective June 1, 2006, 1.75% effective
June 1, 2007 and 1.75% effective June 1, 2008. Picher's award also resolved
the outstanding issue of profit sharing for the flight attendants represented
by Teamsters Canada, who are now eligible to receive the full profit sharing
payout.
In July, Arbitrator Michel Picher awarded the 1,660 employees represented
by the CAW a 1.00% wage increase effective July 2006, 1.75% effective July
2007 and a 1.75 % increase effective July 2008. At that time, Mr. Picher also
granted modest fixed adjustments to the scales applicable to CAW-represented
employees hired after July 31, 2003.
The Canadian Air Line Dispatchers Association (CALDA), which represents
the airline's 54 dispatchers, has been in discussion with the Company, but has
yet to conclude an agreement. Focus remains on concluding a final agreement by
year end. There are no other collective bargaining units to be reviewed.

Cost Savings Initiative

Continuous improvement through the employment of Six Sigma methodology
and cost savings remain a major focus at Air Canada Jazz. This is evidenced by
the fact that costs per ASM decreased by 11.5%, or 14.3% when fuel is
excluded, from the prior year.
Cost savings achieved year-to-date in both the controllable and pass
through categories include; but are not limited to, ensuring controlled and
efficient growth in staff levels, reductions in space at many airports as
leases are renewed and improvements in airport operations.
Although fuel is a pass through cost under the CPA, Air Canada Jazz has
also initiated an internal team to develop fuel efficiency programs. Some of
these initiatives include better fuel-tankering procedures, increased aircraft
towing instead of taxing to and from gates at major bases, and galley weight
reductions.

Quarterly Investor Conference Call / Audio Webcast
--------------------------------------------------

Air Canada Jazz will hold an analyst call at 12:30 p.m. ET on Friday,
November 10, 2006 to discuss the third quarter results of Jazz Air Fund and
Jazz Air LP. The call may be accessed by dialing 1-866-249-2157 (toll free) or
(416) 644-3427 within the Toronto area. The call will be simultaneously audio
webcast at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1639660
The conference call webcast will be archived on Air Canada Jazz's
investor relations website at www.flyjazz.ca. A playback of the call can also
be accessed until midnight ET, Friday, November 17, 2006 by dialing 1-877-
289-8525 (toll free) or (416) 640-1917 within the Toronto area and passcode
21207655(pound key).

(1) Non-GAAP Financial Measures

EBITDAR

EBITDAR (earnings before interest, taxes, depreciation, amortization and
obsolescence and aircraft rent) is a non-GAAP financial measure commonly used
in the airline industry to view operating results before aircraft rent and
ownership costs, including the impact of foreign exchange on monetary items as
these costs can vary significantly among airlines due to differences in the
way airlines finance their aircraft and asset acquisitions. EBITDAR is not a
recognized measure for financial statement presentation under GAAP, does not
have a standardized meaning and is therefore not comparable to similar
measures presented by other public entities. Readers should refer to Air
Canada Jazz's and Jazz Air Fund's Management Discussion and Analysis for a
reconciliation of EBITDAR to operating income (loss).

DISTRIBUTABLE CASH

Cash available for distributions or distributable cash is a non-GAAP
measure generally used by Canadian open-ended trusts as an indication of
financial performance. It should not been seen as a measurement of liquidity
or a substitute for comparable metrics prepared in accordance with GAAP. Cash
available for distributions may differ from similar calculations as reported
by other entities and, accordingly, may not be comparable to cash available
for distributions as reported by such entities. Readers should refer to Air
Canada Jazz's and Jazz Air Fund's Management Discussion and Analysis for a
reconciliation of distributable cash to cash provided by operating activities.

CAUTION REGARDING FORWARD-LOOKING INFORMATION
---------------------------------------------

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, 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 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, war, terrorist attacks,
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 throughout Air Canada Jazz's filings with
securities regulators in Canada and in particular those identified in the Risk
Factors section of Jazz Air Limited Partnership 2005 MD&A dated March 16,
2006.The forward-looking statements contained in this discussion represent Air
Canada Jazz's expectations as of November 9, 2006, and are subject to change
after such date. However, Air Canada 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.

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 November 1, 2006 Air Canada Jazz operated scheduled passenger service on
behalf of Air Canada with approximately 797 departures per weekday to 58
destinations in Canada and 28 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.