Canadian Helicopters Group Inc. (TSX: CHL.A, CHL.B) (“the Company”), the largest helicopter transportation services company operating in Canada, today announced its financial and operating results for the first quarter ended March 31, 2011. These results are the first presented by Canadian Helicopters following its conversion to a dividend-paying corporation on December 31, 2010 and the adoption, on January 1, 2011, of International Financial Reporting Standards (“IFRS”). Results for the prior year period have been restated, for comparability.

The Company generated revenue of $46.9 million, representing an increase of $18.4 million, or 64.6%, over revenue of $28.5 million in the first quarter of 2010. Visual Flight Rules (VFR) revenue increased $16.6 million primarily due to revenues from medium and heavy aircraft contracted in Afghanistan. Instrument Flight Rules (IFR) revenue decreased slightly by $0.3 million primarily resulting from reduced emergency medical services revenue, partially offset by a slight increase in customer activity in the oil and gas industry. Ancillary revenue, including the CFTS contract, grew $2.1 million, mainly due to the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters. Revenue-flying hours increased 19.9% to 10,252 hours.

EBITDA for the first quarter of 2011 reached $8.9 million, up from $0.8 million a year earlier. This increase mainly reflects higher revenue and a more favourable mix resulting from increased activity in Afghanistan where revenues reflect the significantly higher level of effort to accomplish the work.

As a result, adjusted net income amounted to $4.8 million, or $0.37 per share, versus a loss of $0.2 million, or $0.01 per unit in 2010. Adjusted net income excludes certain significant impacts from classifying the Fund Units and Exchangeable Class B LP Units as financial liabilities before the Fund’s conversion into an incorporated entity on December 31, 2010. These significant impacts, mostly of a non-cash nature, reduced net income by $20.1 million in the first quarter of 2010.

Reflecting higher net income, cash flows related to operating activities before net changes in non-cash working capital balances reached $7.8 million in the first quarter of 2011, up from $0.3 million in the corresponding period a year earlier.

“Canadian Helicopters performed strongly in the first quarter, as contracted aircraft in Afghanistan and acquisitions in the repair and maintenance sector offset the seasonal slowdown in domestic activity,” said Don Wall, President and Chief Executive Officer of Canadian Helicopters. “Our ongoing operations in Afghanistan continue to achieve activity levels consistent with our expectations. This greater year-over-year business flow had a direct positive influence on the absorption of fixed costs, which contributed to a significant increase in operating profitability and reduced the impact of soft domestic Q1 activity.”

As at March 31, 2011, Canadian Helicopters’ financial position remained strong with cash and cash equivalents of $35.4 million and unused credit facility. The Company had $40.0 million available under its revolving operating credit facility, while combined cash and credit facility amounted to $75.4 million.

RECENT EVENT
Subsequent to the end of the first quarter, on April 12, 2011, Canadian Helicopters announced it had entered into an agreement to acquire the assets of Helicopters (N.Z.) Limited (“HNZ”) for approximately C$128 million. HNZ is New Zealand’s largest and most diverse helicopter owner and operator with 11 bases and 33 aircraft in support of operations in New Zealand, Australia, Laos and Cambodia. For the 12-month period ended December 31, 2010, HNZ had revenues of approximately C$62 million and EBITDA of nearly C$21 million. HNZ’s operations are largely counter-seasonal to Canadian Helicopters domestic operations.

The transaction is expected to close in the third quarter of 2011 and will be funded with a combination of cash on hand and bank debt. As a result there will be no dilutive effects on existing shareholders. To finance the transaction, CHL has secured commitments for a revolving credit facility totaling C$125 million. This new credit facility will replace CHL’s existing revolving credit facility.

OUTLOOK
“The acquisition of HNZ is transformational. It represents a major step forward in the evolution of Canadian Helicopters into a global provider of transportation services. The many similarities between our two organizations should facilitate the integration, as HNZ has excellent people, a very strong brand and is well recognized for providing safe operations, even in challenging environments. Meanwhile, our operations in Afghanistan should continue to generate significant revenue in the year ahead. In the domestic market, momentum continues to gradually build in the natural resources sector and Canadian Helicopters remains well positioned to benefit from increased activity. Even considering the HNZ acquisition, our financial position will remain solid, which should allow Canadian Helicopters to remain proactive in search of investment opportunities to further extend its range,” concluded Mr. Wall.

CONFERENCE CALL
Canadian Helicopters will hold a conference call to discuss these results on June 10, 2011 at 2:00 PM (ET). Interested parties can join the call by dialing 416-644-3425 (Toronto) or 1-877-974-0445 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access code 4445589 followed by #. This tape recording will be available until June 17, 2011.

ABOUT CANADIAN HELICOPTERS GROUP INC.
Through Canadian Helicopters Limited, Canadian Helicopters Group Inc. is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. From over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including infrastructure maintenance, utilities, oil and gas, mining, forestry, construction, and emergency medical services. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.

FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements relating to the future performance of the Company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise unless being required by applicable laws.

DEFINITION OF NON-IFRS MEASURES: EBITDA, ADJUSTED NET INCOME AND ADJUSTED EPS
References to “EBITDA” are to earnings (loss) before net financing charges (income), income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment, share of net income (loss) of an associate, distributions to Unitholders and holders of Exchangeable Class B LP Units and change in fair value of Units and Exchangeable Class B LP Units as disclosed in the Summary of Selected Consolidated Financial Information. Since EBITDA is a metric used by many investors to compare issuers on the basis of the ability to generate cash from operations, management believes that in addition to net earnings or loss, EBITDA is a useful supplementary measure.

Adjusted net income and adjusted Earnings per Unit information [“Adjusted EPS”] are provided by management to improve the comparability information between 2011 and 2010.  Adjusted EPS is calculated by dividing the net income as disclosed in the statement of comprehensive income, adjusted to add back any distributions to Unitholders and holders of Exchangeable Class B LP Units and to exclude the effect of any change in fair value of Units and Exchangeable Class B LP Units during the 2010 comparative periods, by the weighted average number of Units and Exchangeable Class B LP Units in issue during these periods, regardless whether these units were classified as equity or financial liabilities.

EBITDA, Adjusted net income and Adjusted EPS are not earnings measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Therefore, EBITDA, Adjusted net income and Adjusted EPS may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA, Adjusted net income and Adjusted EPS should not be construed as an alternative to net earnings (loss) determined in accordance with IFRS as indicators of the Company’s performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.

Note to readers: Complete consolidated unaudited interim financial statements and Management’s Discussion & Analysis of Operating Results and Financial Position are available on Canadian Helicopters’ website at www.canadianhelicopters.com and on SEDAR at www.sedar.com.