AeroMechanical Services’ AFIRS to Take Flight with NetJets Europe

Europe’s largest business jet operator to install AFIRS with full services on 30 aircraft

Calgary, Alberta, and Lisbon, Portugal- March 27, 2012 – AeroMechanical Services Ltd. (TSX-V: AMA) (the “Company” or “AMA”) has signed a contract with the largest business jet operator in Europe, NetJets Europe. AMA will provide the Automated Flight Information Reporting System (“AFIRSTM”) and services for 30 Hawker Beechcraft 750/800XP aircraft.

 

The Company and NetJets Europe have engaged in a collaborative in-service evaluation of the AFIRS 220, its Fuel Initiative Reporting System Tracker (“FIRSTTM”), and FLYHTStreamTM programs over the past two-and–a-half-years. During that time, a Supplemental Type Certificate (“STC”) was obtained from the European Aviation Safety Agency (“EASA”) for the AFIRS 220, applicable to the Hawker Beechcraft 987 series of business jets. The initial installations will consist of the Company’s next generation AFIRS 228B, which will be updated to the AFIRS 228U to provide compliance with Europe’s new air traffic control regulations (“Link 2000+”) for Protected Mode Controller Pilot Data Link Communication (“PM CPDLC”). The AFIRS 228U upgrade will be implemented when certification activities are completed, well before the February 2015 compliance deadline.

“NetJets Europe is the European leader in business aviation and we are proud to have met their standards and expectations through our collaborative in-service evaluation,” said Bill Tempany, President and CEO of AMA. “AMA recognizes NetJets’ commitment to safety, quality, and customer service. We look forward to serving NetJets Europe and its customers, enabling greater fleet productivity and safety.”

NetJets Europe, financially backed by Berkshire Hathaway, operates 150 aircraft.  It has selected the entire suite of AFIRS services to provide real-time data from its Hawker Beechcraft 750/800XP aircraft fleet as well as enhanced flight data monitoring (“FDM”), fuel management, and Electronic Flight Bag (“EFB”) connectivity. AMA’s FIRST program will quantify and monitor operating procedures to reduce fuel consumption and emissions, aiding NetJets Europe’s Climate Initiative, which aims to reduce NetJets Europe’s environmental impact. NetJets Europe and AMA will also work together to adapt AFIRS’ unique FLYHTStream position and data streaming capability to serve the operator’s need for enhanced troubleshooting and emergency management.

AMA will provide equipment and services to NetJets Europe over a five-year contract. The installations for Hawker Beechcraft 750/800XP will commence in April 2012 and activation will occur when AMA receives all necessary certifications. No issues are anticipated in completion of the certifications. AMA will receive initial payments totaling between $1.0M – $2.0M USD over the first few months of the contract and payments for recurring revenue services as incurred. If AMA completes installation on all contracted aircraft and receives appropriate EASA STCs, with recurring service for the full term of the agreement, gross revenue to AMA will total in excess of $6.0M USD, excluding optional upgrades and services. The exact amounts of the contract have not been disclosed at the customer’s request.

The Company has previously received a provisions-only STC for AFIRS 228 on the Hawker Beechcraft 750/800XP from EASA and a flight test was successfully conducted on January 26, 2012, in order to obtain the full activation STC. It is anticipated the Company will receive the activation approval and STC from EASA within eight weeks of the flight test.

AMA first announced an AFIRS 220 installation on a NetJets Europe’s aircraft on September 9, 2009. It was the Company’s first business jet installation.

FLYHT's Director of Product Development, Steve Harke, with NetJets' aircraft and the AFIRS 228

This disclosure as it relates to this agreement is subject to the following disclaimer:

When a contract is initially signed, the intended number of aircraft, pricing, and potential installation schedules are agreed to by the parties. The actual installation schedules as well as the number and types of aircraft are often revised throughout the term of the agreement as the operator realigns its fleet of aircraft with its business requirements. Delays in installations can and do occur which can affect the total value of the contracts such that the revenues noted above may not be fully achieved. Fulfillment of the contract terms may also be affected if there are any changes to government statutes, regulations or rules of the applicable governing bodies. The contract terms and values disclosed herein are based on the original information available to AMA upon execution of the contract and are subject to change. For the actual revenue earned, please see AMA’s financial statements including its revenue recognition policy disclosed within the notes to the Audited Annual Financial Statements.

About AeroMechanical Services

AeroMechanical Services Ltd., under the brand name FLYHTTM, provides proprietary technological products and services designed to reduce costs and improve efficiencies in the airline industry. The Company has patented and commercialized three products and associated services currently marketed to airlines, manufacturers and maintenance organizations around the world. Its premier technology, AFIRS™ UpTime™, allows airlines to monitor and manage aircraft operations anywhere, anytime, in real time. If an aircraft encounters an emergency, AMA’s triggered data streaming mode, FLYHTStream™, automatically streams vital data, normally secured in the black box, to designated sites on the ground in real time. The company has been publicly traded on the TSX Venture Exchange since 2003 under the trading symbol AMA.

The AFIRS 228U is a safety services version of the AFIRS 228S that includes a second hardware module that provides Protected Mode-Controller-Pilot Data Link Communication (“PM-CPDLC”) required underEurope’s Link 2000+ regulation.

AFIRS, UpTime, FLYHT, FLYHTStream, FIRST, and aeroQ are trademarks of AeroMechanical Services Ltd.

About NetJets Europe

NetJets Europe was founded in 1996 and today is the largest business jet company in Europe. As the only pan-European operator with its own fleet, NetJets Europe through NetJets Transportes Aéreos (NTA) is uniquely capable of delivering a consistent, world-class service with an unparalleled commitment to safety and security. NTA was the first business jet operator to be awarded the IOSA certificate, the highest safety accreditation in the world. NetJets Europe employs a total workforce of more than 1,500 and has over 150 aircraft. NetJets Europe is the marketing agent of NetJets Transportes Aéreos S.A., an EU air carrier. www.netjetseurope.com

Contact Information

AeroMechanical Services Ltd.
Thomas R. French, CGA
VP Finance and CFO
403-291-7427
tfrench@flyht.com

www.flyht.com

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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