(All amounts within this news release are stated in U.S. dollars) Northstar Aerospace Inc. (the "Company") today reported revenue totaling $36.8 million for the three months ended June 30, 2006 compared to $33.2 million in 2005, an increase of $3.6 million. For the six months ended June 30, 2006, revenue increased to $73.0 million in 2006 from $68.9 million in 2005.

Defense revenue of $22.6 million in the three months ended June 30, 2006 is consistent with 2005. Commercial revenue increased to $14.2 million in the three months ended June 30, 2006 from $10.7 million in 2005 as growth with Rolls-Royce, Honeywell and repair and overhaul services more than offset lower revenues in the General Electric Aircraft CF-34-3 program. For the six months ended June 30, 2006, defense and commercial revenues have increased by $1.9 million and $2.2 million, respectively compared to 2005.

Margin as a percentage of revenue was 22.4% in the three months ended June 30, 2006, continuing a 12-month trend of margin increases since the three months ended September 30, 2005 when margin was reported at 19%. Margin is expected to remain at least consistent with year-to-date results for the balance of the year.

Backlog increased to $210 million as of June 30, 2006 from $204 million as of December 31, 2005, partially driven by $5.5 million of orders received in June 2006 on the CH-47 program for sales direct to the U.S. government.

Net income for the three months ended June 30, 2006 was $0.9 million or $0.03 per share compared to $1.3 million or $0.04 per share for the same period in the 2005. Net income for 2006 and 2005 included $0.8 million and $0.2 million, respectively, of income related to a discontinued business. The three months ended June 30, 2006 included a $0.6 million charge for unusual items related to the Canadian operations. These expenses, primarily severance, are the completion of a restructuring plan implemented in 2005. Net income for the six months ended June 30, 2006 was $1.4 million ($0.04 per share) compared to $9.6 million ($0.33 per share) in 2005, which included a net gain of $6.7 million from unusual items.

Mark Emery, President and Chief Executive Officer stated:

"The second quarter demonstrated broad-based growth with established

customers such as the Boeing Company and Honeywell as well as on new

programs, in particular the Rolls-Royce Trent 1000.

In our Canadian operations, the transition from mature programs to new

contracts continued and we are delighted to be a supply partner to Bell

Helicopter on the highly successful new Bell 429 helicopter.

The trend of strengthening margins continued in the second quarter. While

margins may fluctuate due to the mix of programs in a particular quarter,

the positive trend should be sustained. Sales will benefit from

continuing strong demand in both defense and commercial aerospace markets

combined with Lean Manufacturing related operational improvements."

A more detailed discussion of the Company's financial results for the three and six months ended June 30, 2006 is contained in Management's Discussion and Analysis, including comments on the comparability of results between the current and prior year.

Northstar Aerospace Inc. (www.nsaero.com) is North America's leading independent manufacturer of flight critical gears and transmissions. Northstar Aerospace is a public company (TSX:NAS) with operating subsidiaries in the United States and Canada. Its principal products include helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of helicopter engines and transmissions. The Company's executive offices are located in Chicago, Illinois. Its plants are located in Chicago, Illinois; Phoenix, Arizona; Stroud, Oklahoma; and Milton and Windsor, Ontario.

Forward Looking Statements

This press release includes "forward-looking statements" that are subject to risk and uncertainty. All statements other than statements of historical facts included in this report, including, without limitation, those regarding the Company's financial position, business strategy, projected costs and plans, projected revenues, objectives of management for future operations, and certain other items discussed above may be or include forward-looking statements. There is uncertainty over the impact of terrorist activity on the North American economy and the Company's revenues and earnings for 2005 and beyond. There is also uncertainty as a result of the downturn in the commercial aerospace market, the impact of lower world wide commercial passenger air travel, air freight traffic and the impact of the level of future U.S. military expenditures. Forward-looking information contained herein is based upon a number of assumptions regarding the Canadian, U.S. and global economic environment and local and foreign government policies and actions. Actual future results of the Company may differ materially depending on a variety of factors, including production rates, timing of product deliveries, Canadian, U.S. and foreign government activities, volatility of the market for the Company's products and services, worldwide political stability, factors that result in significant and prolonged disruption to commercial air travel worldwide, worldwide political stability, domestic and international economic conditions, and other political and economic risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements"), are included in the Company's Annual Report for the Years Ended December 31, 2005 and 2004 - Management's Discussion and Analysis - Risks and Uncertainties, and in the Company's Annual Information Form filed on March 31, 2006, under the heading of Risks and Uncertainties. All information contained in this report and subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the Cautionary Statements.

The Company disclaims any intentions or obligation to update or revise any forward looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is required by law.

Non-GAAP Measures

The Company defines adjusted income before taxes, comparable basis, as income from operations before income taxes, unusual items, and non-recurring items. The Company defines EBITDA as earnings from operations before interest, income taxes, foreign exchange, depreciation and amortization, unusual items, and other non-recurring items. The Company has included information concerning EBITDA because it believes this measure is used by certain investors as a measure of continuing financial performance. EBITDA is not a measure of financial performance under GAAP. As well, this measure has no standardized meaning prescribed under GAAP and is unlikely to be comparable to similarly titled measures used by other companies. This measure should not be construed as an alternative to cash flow from operations or earnings from operations as determined in accordance with GAAP as measures of liquidity or earnings.

For a detailed reconciliation of EBITDA to income from continuing operations, please see Management's Discussion and Analysis available on the Company's website and on SEDAR.

NORTHSTAR AEROSPACE INC.

FINANCIAL HIGHLIGHTS

For the three months ended June 30, 2006

prepared in accordance with Canadian GAAP

UNAUDITED

---------

(millions of U.S. dollars except per share amounts)

Summary of Quarterly Information

Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3

2006 2006 2005 2005 2005 2005 2004 2004

Revenues $ 36.8 $ 36.3 $ 30.9 $ 37.7 $ 33.2 $ 35.8 $ 37.4 $ 33.9

Unusual

loss

(gain) 0.6 - 5.5 (0.6) - (6.7) - 0.4

Net income

(loss)

continuing

operations 0.1 0.3 (4.9) 0.4 1.1 8.0 1.9 0.9

Net income

(loss) 0.9 0.5 (4.7) 0.5 1.3 8.3 2.1 1.0

Income

(loss) per

share,

continuing

operations:

basic - 0.01 (0.17) 0.01 0.04 0.27 0.07 0.03

fully

diluted - 0.01 (0.16) 0.01 0.04 0.26 0.06 0.03

Income

(loss) per

basic 0.03 0.02 (0.16) 0.02 0.04 0.28 0.07 0.03

fully

diluted 0.03 0.02 (0.16) 0.02 0.04 0.27 0.07 0.03

Summary Balance Sheet Information

June 30, December 31,

2006 2005

Working capital, continuing operations $ 42.8 $ 36.2

Total assets $ 159.0 $ 147.5

Total debt $ 61.9 $ 53.3

Shareholders' equity $ 49.9 $ 45.5

The unaudited Consolidated Financial Statements for the Three and Six Months ended June 30, 2006 and related MD&A are available on our website at: www.nsaero.com and on SEDAR.

%SEDAR: 00002555E

For further information: Tom Connerty, Chief Financial Officer; Craig Yuen, Corporate Controller; (708) 728-2000

Source: newswire