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Viking Launches Twin Otter Series 400 Aircraft Production Program

Company secures enough firm and option orders to proceed with “Series 400” aircraft production from customers worldwide

Victoria, British Columbia, April 9, 2007……Viking Air Limited, which last year announced that it was considering re-starting production of the 19-passenger DHC-6 Twin Otter, has today confirmed the program will proceed. The company met its required goals: sufficient firm orders, further investment in the company by its majority shareholder Westerkirk Capital, approval by the company board of directors, and the existence of a federal government program that could provide repayable financial assistance for research and development to update the Twin Otter design for operation in the 21st century.

Viking president and CEO, David Curtis said he was encouraged by the recent announcement by the federal government of the Strategic Aerospace and Defence Initiative (SADI) program. Curtis fully expects the Viking Twin Otter program will meet the requirements set out by Industry Canada, which will administer the SADI program.

Viking has also had positive discussions with Export Development Canada (EDC), a federal government crown corporation which can provide a number of financial services for purchasers of new Twin Otters. EDC has expressed a desire to work with Viking and its customers on this newly-launched program.

The company is encouraged by the strong show of confidence from both existing and new Twin Otter operators, allowing it to proceed. Negotiations with several others are also underway adding to the program’s success.

Independent market studies by Conklin & deDecker reflect a ten-year demand for over 400 new aircraft.

One of the lead orders, for five aircraft, was received from Trans Maldivian Airways (TMA). The airline currently operates 16 Twin Otters built by the original manufacturer, de Havilland Canada as seaplanes and intends to expand throughout the Maldives as tourism will cover the whole 850 kms long archipelago.

Loch Ard Otters, LLC, of Palm Beach, Florida has also stepped up for six aircraft firm plus six options. These aircraft will be offered for lease to operators worldwide.

Other launch customers include Air Seychelles for two airplanes, Air Moorea for two and Zimex Aviation of Switzerland for one. Between them, these three airlines currently operate more than 25 ‘heritage’ Twin Otters.

Deliveries of new aircraft will commence within 24 months and the anticipated production rate will ramp up to fulfill the demand as necessary, according to Curtis. Production airplanes will be built under a slightly-modified original type certificate.

The new aircraft, on wheels, with a standard 19-seat commuter interior and basic instrumentation, sells for US $3.2 million in 2006 dollars, adjusted to the consumer price index at the time of delivery. Full de-ice, float, amphibious and ski landing gear will be offered as aftermarket options. Operators will also option exterior paint as well as avionics systems.

“Today marks a significant milestone for Viking and for the Canadian aerospace industry,” Curtis said. “With today‘s announcement we become the country’s only manufacturer of certificated aircraft west of Ontario by returning to production, after almost 19 years, the world’s best-selling 19-passenger aircraft, one that is respected worldwide for its capability, reliability and safety. We are extremely proud of this moment, this decision and this airplane.”

TMA managing director, Bram Steller, believes new-production Twin Otters will allow his company to grow significantly. “Finding light, well maintained airplanes is next to impossible, and often requires major refurbishing or rebuilding,” he said. “Our current fleet is well-maintained but will benefit from the addition of new aircraft. The Twin Otter Series 400 will be perfect for our routes with more payload and more range. An additional benefit will be the standardization since all current Twin Otters on the market have all been modified out-of-standardization."

Commenting on the move to purchase the new aircraft, Air Seychelles’ chairman and chief executive, Captain David Savy, says: “We have been seeking the replacement of our Twin Otter DHC-6 Series 300 fleet for some time now and we were looking at an aircraft which could meet the peculiarities of our demanding domestic operations. We fly very short sectors, land on rugged, short airstrips and operate in a saline, humid environment. This is a very challenging environment for our technical and maintenance crews.

“The current Twin Otter Series 300 aircraft is an ideal, robust aircraft adapted to inter-island operations of Air Seychelles,” Savy added. “We faced a lot of difficulty in finding a suitable replacement to the Series 300. For some years now we have been urging the manufacturers to re-commence production. Fortunately, Viking Air has taken-up the challenge.”

Loch Ard will be Viking's preferred leasing partner, providing potential operators with an alternative to straight purchase. Loch Ard is owned and managed by a team with extensive experience in transportation asset financing and leasing.

Commenting on its order, Loch Ard Otters president Matthew Lorentzen said, "We selected Viking and the Series 400 because of the unmatched capabilities of the aircraft and the demonstrated capabilities of Viking to manufacture it."

Zimex, whose 12 existing Twin Otters form the backbone of its current fleet, have been operating for 30 years providing reliable, worldwide aircraft support to international organizations and the oil industry in desert and remote areas.

The new Series 400 aircraft, based on the original 19-seat Series 300, will have their major components built in Victoria with aircraft assembly and customer delivery in Calgary, Alberta. It will incorporate a number of improvements based on today’s available technologies. The original Pratt & Whitney Canada PT6A-27 engines will be replaced by higher output PT6A-34 engines, flat-rated for better performance in all flight regimes. PT6A-35 engines and four blade propellers will be offered as optional.

Twin Otters are flown by such diverse operators as commuter airlines, Antarctic and desert expeditions, inter-island and coastal taxis, para-droppers, airborne research firms and corporate transportation departments.

Viking acquired the type certificate and production rights to the Twin Otter from Bombardier Aerospace in early 2006.

The original de Havilland Twin Otters were built between 1965 and 1988, when 844 were delivered. More than 600 remain in active service today.

Incorporated in 1970, Viking Air Limited has established itself in the aviation community as a high-quality aerospace manufacturer and an aircraft modification, sales, leasing and repair facility.

Viking owns the Type Certificates for the de Havilland Canada DHC-1 Chipmunk, DHC-2 Beaver, DHC-2T Turbo Beaver, DHC-3 Otter, DHC-4, Caribou, DHC-5 Buffalo, DHC-6 Twin Otter and DHC-7 DASH 7 and has been providing all product support functions for the fleet since May 2005. Viking is part of Westerkirk Capital Inc., a Canadian private investment firm with substantial holdings in the hospitality, aviation and real estate sectors.

Note:
Viking Air Limited is not related to, endorsed by, part of, or working with Bombardier Inc. or any of its affiliates on this project.

Information:
Beth Shrieves, Contract Administrator – Aircraft Sales & Leasing 800-663-8444. Visit www.vikingair.com.

Media contact:
Jamie McIntyre; Romeo Oscar Communications: 514-780-8525