Bermuda Aviation Services Ltd. (BAS), Chairman's Report and Management Letter 2007

Hamilton, Bermuda, July 2, 2007 - In an announcement made to the Bermuda Stock Exchange (BSX) Michael Darling, Chairman of Bermuda Aviation Services Ltd. (BAS), today announced, "Fiscal year 2007 was another extremely successful one for Bermuda Aviation Services Ltd. (BAS) The Company continues to improve on those things most important to our customers; products and service, whilst driving growth and earnings to deliver value to our shareholders.

Our focus on performance produced our fourth consecutive year of increased revenue and net earnings. Whilst operating earnings were down 22% to 3.3 million, net earnings improved 19% to 3.4 Million. Revenue for the period was up 5% to 37 million.

We enjoyed results that strengthened our balance sheet, enabled us to return higher dividends to our shareholders and allowed us to invest in our future through further acquisitions providing momentum for significant growth in 2008. In February we announced the acquisition of a majority shareholding in Otis Bermuda Ltd. Otis is the world's leader in elevator technology and holds the largest share of installed units not just in Bermuda but worldwide. In March BAS acquired 100% of the shares of Computer Cabling Solutions Ltd. (CCS Ltd) a leading provider of cabling, telephony and network infrastructure in Bermuda. Not only do both businesses complement our facilities management operations, but they also meet our strict criteria for acquisitions. Both companies have a solid customer base and present excellent opportunities for growth.

Growth requires the right competencies, and a key component of future success is the assurance of good leadership. In this regard the board was pleased to approve the appointment of Ken Joaquin to the post of Group Chief Executive Officer. His appointment took effect on October 1, 2006. Ken will assume the role of Group president and chief executive officer on January 1, 2008 when Gene Bean our present group president steps up to the role of Executive Director where he will primarily concentrate on the company's strategic initiatives whilst maintaining oversight and responsibility for the company's affairs. We are also pleased to have Raymond Packwood take on an expanded Chief Financial Officer role after wearing several hats and managing several of or subsidiaries. In April Richard Savard who formerly headed Bas-Serco assumed the role of Group Chief Operating Officer responsible for internal development, safety management to accommodate future growth. This team will also establish the company's operational and financial goals. This breadth of experience and expertise will be the catalyst for our future success.

Looking ahead I see BAS well positioned across every line of business. Our strong management, reliable service and sound growth strategy are the fundamentals that brought us to where we are today and on what we will build our future.

In closing your board of directors wishes to acknowledge the hard work and dedication put forth by the men and women in our various operations. They are truly the underlying strength of our success.

Michael Darling

Chairman

2007 Management Letter

We enter this year with an expanded portfolio of excellent businesses and with the greatest financial strength in the history of the company.  Although we incurred some debt in the acquisitions of CCS Ltd. we see much future benefit in the addition of this company and Otis Bermuda Ltd. Both companies come with a highly skilled workforce, name brand presence, a proven record of performance and excellent leadership. The two acquisitions afford us further opportunity to build on our facilities management businesses and in time bring single solutions for a good portion of our clients.

There were many events to highlight from this year's performance, not least of which were record earnings, record revenues, greater assets and improved shareholders' equity. Revenue and income in each subsidiary were ahead of last year. Whilst performance across the entire group was either good or excellent with no particular company or division giving us any cause for concern, we intend to, over the next eighteen months, to standardize processes and look for both financial and operational efficiencies across the various businesses. All contracts, expenditures and processes will be scrutinized to take advantage of our size and reach.

In our management letter of 2006 we set several goals for the three ensuing years. All  related to increasing shareholder value. I am pleased to report that we are well on our way to meeting or exceeding our objectives. Earnings per share for this fiscal year were up 19%; return on revenue is ahead 14%, cash flow is strong and having continued to execute our growth plan effectively the company could not be more stable.

This year, in addition to giving you our shareholder a commitment to strive for further financial improvement, we also commit to the employees of BAS the opportunity for advancement and upward mobility. To this end the company has established two scholarship plans to assist both employees with further education needs. The award programme will be open only to employees or dependent children of employees (excluding Directors).  The values will be $10,000 per year for overseas education for the "Bermuda Aviation Services Limited Chairman's Education Award", and $5,000 per year for an Associate's Degree at the Bermuda College designated as the "Bermuda Aviation Services Limited President's Education Award."

There is one item of litigation that BAS has tried to settle amicably with the Government of Bermuda. To date this has not been possible. It concerns our Private Jet operation where it is our position that the company has the exclusive right to operate the concession till the year 2014. The tender documents issued in 1997 clearly state that the successful proponent has such a right. The Government has put forward that we do not, and has accepted another proposal that will allow a second operator. We are confident of our position.

Despite this distraction 2008 looks extremely bright. Earnings and revenues are expected to rise by more than 20% and our cash position will improve quickly as we aggressively reduce our debt. We are extremely proud to have Rob Loxton and his CCS Ltd team join our family and equally proud and pleased to have Ms. Candy Foggo lead our Otis group. Both are proven executives who will contribute immensely to our planning and performance. That appreciation of course extends to the present management team, our employees, customers and shareholders whose contribution and support were an integral part of our excellent performance.

This will be my last management letter as I'll step down from the day to day operations of BAS in December. I am extremely grateful to have had the opportunity to lead such a great company and particularly proud to have been a part of its diversification and growth. I look forward to further contribution in my new strategic role supporting the new leadership.

Sincerely,

Eugene Bean

Group President