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Cargojet Income Fund Announces Second Quarter Results

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MISSISSAUGA - Cargojet Income Fund (TSX: CJT.UN) (the "Fund"), Canada's leading provider of time-sensitive overnight air cargo service, today announced its results for the second quarter ended June 30, 2005.

The Fund, which commenced operation upon completion of its initial public offering on June 9, 2005, provided financial information for its 22-day period as a public entity and for the combined three month period and six months ended June 30, 2005.

For the 22-day period as a public entity, revenue was $6.8 million and EBITDA was $1.1 million. A distribution of $0.0672 per unit was declared payable July 15 to unitholders of record on June 30, 2005.

"Our revenue during the second quarter increased by 10 per cent on a year over year basis and our results benefited from 80 new accounts we have secured in the first six months of 2005," said Ajay Virmani, President and Chief Executive Officer. "Recently we announced a new route into Western Canada and the signing of amended agreements with existing major customers which we expect will add additional annual revenues to existing long-term customer contracts. These announcements build on the momentum we've generated since becoming an income fund and help to keep us on track to meet our performance targets for the remainder of 2005."

Revenue of $28.1 million in the second quarter was up $4.3 million from the same period in 2004, reflecting increases in overnight cargo and ACMI (aircraft, crew, maintenance and insurance lease arrangements) cargo of $2.2 million and $2.6 million respectively, and a decrease of $0.5 million in ACMI passenger revenues. Six-month revenue of $55.5 million was an increase of $9.3 million or 20.2 per cent from 2004.

Direct expenses for the three months ended June 30, 2005, were $21.7 million, an increase of $3.2 million or 17 per cent from the second quarter last year. An increase in fuel expenses of $2.0 million was passed along to customers as a fuel surcharge. Increases in navigation and landing fees and crew costs were a direct result of increased hours required to fly and service new ACMI customers. Six-month direct expenses were $42.7 million, an increase of $6.9 million or 19.1 per cent from the comparative period last year.

SG&A expenses for the combined second quarter were $3.9 million, an increase of $0.8 million or 26.6 per cent from the $3.1 million of the second quarter of 2004. The increase is attributable to volume rebates to customers, advertising and sales promotions and annual salary increases for employees. SG&A for the six months ended June 30 were $7.1 million, an increase of $1.1 million or 17.8 per cent from the first six months of 2004.

EBITDA was $2.6 million for the three months ended June 30, 2005, up $0.18 million or 7.4 per cent from the previous year. The improvement in EBITDA is attributed to an increase in ACMI revenues that was offset marginally by an increase in general and administration expenses. Six-month EBITDA of $6.75 million represented an increase of $2.12 million or 45.9 percent from the $4.63 million for the comparative period last year.

Non-GAAP Measures

EBITDA and distributable cash are non-GAAP financial measures, but management believes they are useful in measuring the Fund's performance. Readers are cautioned that these measures should not be construed as alternatives to net income or loss or other comparable measures determined in accordance with GAAP as an indicator of the Fund's performance or as a measure of the Fund's liquidity and cash flow. The Fund's method of calculating non-GAAP measures may differ from the methods used by other issuers and accordingly, the Fund's non-GAAP measures may not be comparable to similarly titled measures used by other issuers.

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