Re Agreement with Skywest Airlines and Virgin B...

Via the rns service of the London Stock Exchange AVAP

                                                                    Singapore the 10th of January 2011

                                              AVATION PLC
                                           (the "'Company')

                                Fleet of Aircraft for Virgin Blue Group

Avation PLC is pleased to announce that it has entered into an agreement with Skywest Airlines Pty Ltd
and  Virgin  Blue Airlines Pty Ltd to provide a fleet of up to 18 new aircraft which will  operate  in
Australia.

Each  aircraft  will be operated by Skywest under wet lease to Virgin Blue for a fixed period  of  ten
years.   The  two  airlines and the Company are making arrangements to take delivery of  new  aircraft
during 2011 and 2012.

The  aircraft  will  be owned by, and leased by, Avation PLC on 10 year operating  leases  with  other
commercial  terms  as typically entered into by the Company and its lessee customers.   The  Directors
believe  that  given  the quality of the lessee, the fixed term and the fact  the  aircraft  are  new,
Avation  PLC  is  well  placed  to  utilise Government-backed Export  Credit  Agency  Financing  ("ECA
Financing").  Avation PLC intends to make an application for ECA Financing forthwith. Further  details
will be announced as and when they are known.

The full text of the Virgin Blue and Skywest Ltd announcement is repeated below in this market
release.

               The Directors take responsibility for the contents of this announcement.

                                              ---ENDS---
For further information, please contact

AVATION PLC:                                                    [phone]
Jeff Chatfield, Chairman

Company Stockbroker                                             020 7220 1690
WH Ireland Limited

ADVISOR:                                                        020 7628 1128
Dr Frank Lucas, Loeb Aron & Company                             

MEDIA:                                                          020 7562 3350
Laura Stevens/Natalie Quinn
Bishopsgate Communications
[e-mail]

Full text of the Virgin Blue : Skywest Ltd announcement follows:

VIRGIN BLUE AND SKYWEST SIGN 10 YEAR STRATEGIC ALLIANCE TO CREATE REGIONAL NETWORK

SYDNEY  10  JANUARY,  2011: Virgin Blue Group and Skywest airlines today signed a  10  year  strategic
alliance  to service regional Australia with Skywest operating up to 18 new Virgin Blue branded  turbo
prop aircraft to a number of existing and new destinations around Australia.

The  agreement  will  see  Virgin Blue and Skywest codeshare on a number of sectors  of  each  other's
domestic  networks  and  allows Virgin Blue and Skywest customers to earn and redeem  Velocity  reward
points on each other's networks.

Virgin  Blue Group of Airlines Chief Executive Officer and Managing Director John Borghetti said:  "By
partnering  with the preeminent regional airline in Australia, Virgin Blue is investing in building  a
substantial network in regional Australia and strengthening its domestic network.  This alliance  will
significantly benefit regional Australia as well as being a win-win for Skywest and Virgin Blue.

"The  combined strength of our networks, along with the additional capacity we will deliver  with  new
aircraft, will provide travellers with more frequent flights, better schedules and competitive  fares.
The partnership will see Virgin Blue expand its reach throughout regional Australia and will allow  us
to access untapped opportunities in regional Australian markets, in particular the booming fly-in fly-
out resource sector market.

"The  first aircraft will arrive mid 2011 with four Virgin Blue branded aircraft in operation  by  the
end  of  the year.  These modern aircraft will have excellent fuel efficiencies, allowing us  to  keep
airfares low for our customers."

The  announcement today completes the third phase of the Virgin Blue Group's network review which aims
to strengthen the domestic network, increase profitability and provide more choice for customers.

Skywest  Chairman Jeff Chatfield said: "In addition to providing Skywest with access to Virgin  Blue's
extensive  network, this major strategic initiative provides us with the opportunity to  significantly
grow  our  corporate  travel  offer  for  resource sector and charter  clients  across  Australia  and
internationally.

"The  leasing arrangement means that Skywest will not be exposed to the capital investment  of  owning
the aircraft and will be a service provider and code-share partner."
The new aircraft fleet will be leased from specialist leasing company Avation PLC (LSE: AVAP), with an
initial term of ten years.

Skywest  is  also  planning  to use a new fleet of the same aircraft on coastal  networks  in  Western
Australia, having been recently preferred by the Western Australian Government for a 5 year  exclusive
license on certain coastal ports of Western Australia to and from Perth.

Details of the network and flight schedule will be announced in coming months.
                                                 ends

About Skywest
Skywest  has  been  operating in Australia for more than 46 years and is one of  Australia's  largest,
oldest  and most successful regional airlines. Each year they fly more than 350,000 passengers  across
Western  Australia,  the  Northern Territory, Melbourne and Bali, covering 18 commercial  destinations
alongside 6 mining centres. Skywest provides a link for regional communities, tourists and businesses.

The  airline  predominantly  caters  for regional Australians, international  and  domestic  tourists,
corporate travellers and fly-in-fly-out mining staff.

Skywest  Ltd's  securities are quoted in London (AIM:SKYW) and on the Australian  Securities  Exchange
(ASX:SXR)

About Virgin Blue Group

Australia-based  Virgin  Blue  Group  of Airlines includes Virgin Blue  and  short-haul  international
airlines  Pacific  Blue and Polynesian Blue - the joint venture with the Samoan  Government.  It  also
includes  long-haul international carrier V Australia. The four airlines operate a fleet of 88  Boeing
737-NGs,  Boeing  777  and Embraer E-Jet aircraft to 31 Australian and 17 international  destinations.
Virgin Blue Group has recently announced alliances with Etihad Airways and Air New Zealand.

Avation plc