AirNet Systems, Inc.
7250 Star Check Drive
Columbus, Ohio 43217
(614) 409-4900

May 12, 2008

Dear Shareholder:

     You are cordially invited to attend the special meeting of shareholders of AirNet Systems, Inc. (“AirNet”) to be held on Wednesday, June 4, 2008, at 10:00 a.m., Eastern Daylight Saving Time, at the Hilton Columbus of Easton, 3900 Chagrin Drive, Columbus, Ohio 43219. In light of the transaction described below, this is an important meeting for our shareholders, and I strongly encourage you to attend or submit a properly executed proxy.

     At the special meeting, you will be asked to vote upon a proposal to adopt an Agreement and Plan of Merger, dated as of March 31, 2008, by and among AirNet, AirNet Holdings, Inc., and AirNet Acquisition, Inc., and to approve the merger contemplated thereby. If the merger is completed, AirNet Acquisition will be merged with and into AirNet, AirNet will become a wholly-owned subsidiary of AirNet Holdings and you will be entitled to receive $2.81 in cash, without interest, for each common share of AirNet that you own. AirNet Holdings was formed by Bayside Capital, Inc. to complete the merger. Bayside Capital manages a $500 million special situations fund that invests in the debt and equity of middle market companies that can benefit from operational enhancements, improved access to capital or balance sheet realignments.

     In connection with the proposed transaction, AirNet’s board of directors carefully reviewed and considered the terms and conditions of the merger and the merger agreement. The board considered, among other things, the opinion of Brown, Gibbons, Lang & Company Securities, Inc., one of the board’s financial advisors, that, as of March 29, 2008, the $2.81 per share cash consideration to be received by AirNet’s shareholders pursuant to the merger agreement was fair to the shareholders from a financial point of view. The $2.81 per share cash consideration represents an approximately 94% premium that shareholders will receive for each common share of AirNet over the per share closing price on March 28, 2008, the last trading day prior to the date of execution of the merger agreement. The board of directors has unanimously approved the merger and the merger agreement and determined that the merger and the merger agreement are advisable, fair to and in the best interests of AirNet and its shareholders.

      Accordingly, your board of directors unanimously recommends that you vote FOR adoption of the merger agreement and approval of the merger.

     The accompanying notice of meeting and proxy statement explain the proposed merger and provide specific information concerning the special meeting. Please read these materials carefully.

     Your vote is important. AirNet cannot complete the merger and shareholders will not receive the $2.81 per share merger consideration unless the holders of at least a majority of AirNet’s outstanding common shares vote in favor of adoption of the merger agreement and approval of the merger and the other closing conditions are satisfied. As a result, your failure to vote would have the same effect as a vote against adoption of the merger agreement and approval of the merger.

     In connection with the execution of the merger agreement, AirNet Holdings purchased 1,934,137 common shares from AirNet at a price of $2.81 per share for total consideration of approximately $5.4 million. These common shares represented approximately 16.0% of the outstanding common shares of AirNet as of the record date for the special meeting, and AirNet Holdings has informed AirNet that AirNet Holdings intends to vote these common shares in favor of adoption of the merger agreement and approval of the merger.

     Please complete, sign and date the accompanying proxy card and return it in the enclosed return envelope, whether or not you plan to attend the special meeting. If you do attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

     If you have any questions or need assistance voting your common shares, please call Georgeson Inc., New York, New York, which is assisting us. Shareholders should call toll-free at (877) 484-8195; banks and brokers may call (212) 440-9800.

				Sincerely,
				Bruce D. Parker
				Chairman of the Board,
				Chief Executive Officer and President

      This transaction has not been approved or disapproved by the Securities and Exchange Commission or any state securities commission. Neither the Securities and Exchange Commission nor any state securities commission has passed upon the merits or fairness of this transaction or upon the adequacy or accuracy of the information contained in this proxy statement. Any representation to the contrary is a criminal offense.

Please Complete, Sign, Date and Return the Accompanying Proxy Card.

AirNet Systems, Inc.
7250 Star Check Drive
Columbus, Ohio 43217
(614) 409-4900

Notice of Special Meeting of Shareholders
To Be Held on Wednesday, June 4, 2008

     To the Shareholders of AirNet Systems, Inc.:

     Notice is hereby given that a special meeting of shareholders of AirNet Systems, Inc., an Ohio corporation (“AirNet”), will be held on Wednesday, June 4, 2008, at 10:00 a.m., Eastern Daylight Saving Time, at the Hilton Columbus of Easton, 3900 Chagrin Drive, Columbus, Ohio 43219, for the following purposes:

	1.		To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of March 31, 2008, by and among AirNet, AirNet Holdings, Inc., a Delaware corporation, and AirNet Acquisition, Inc., an Ohio corporation and a wholly-owned subsidiary of AirNet Holdings, and to approve the merger contemplated thereby. Subject to the terms and conditions of the merger agreement, at the effective time of the merger, (i) AirNet Acquisition will be merged with and into AirNet, which will be the surviving corporation in the merger and become a wholly-owned subsidiary of AirNet Holdings, and (ii) each common share, $.01 par value per share, of AirNet outstanding immediately prior to the effective time (other than common shares held by AirNet or AirNet Holdings or any of their respective subsidiaries or common shares with respect to which dissenters’ rights are perfected) will be automatically converted into the right to receive $2.81 in cash, without interest;
	2.		To consider and vote upon a proposal to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger; and
	3.		To transact such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

     The accompanying proxy statement describes the merger and the merger agreement, a copy of which is attached as Appendix A to the proxy statement.

     AirNet’s board of directors has fixed the close of business on May 1, 2008, as the record date for the determination of shareholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement of the special meeting.

     Shareholders who do not vote in favor of adoption of the merger agreement and approval of the merger will have the right to dissent and seek appraisal of the “fair cash value” of their common shares if they comply with the applicable procedures required by Section 1701.85 of the Ohio Revised Code. A summary of the provisions of Section 1701.85 is set forth in the accompanying proxy statement under the caption “The Merger – Rights of Dissenting Shareholders.” The entire text of Section 1701.85 is attached as Appendix C to the accompanying proxy statement.

     The proxy holders will vote the common shares represented by properly executed proxies as directed on the proxy card. If no directions are given, proxies will be voted (i) “FOR” adoption of the merger agreement and approval of the merger, (ii) “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, in order to permit further solicitation of proxies and (iii) in accordance with the discretion of the persons named as proxies on any other matters properly brought before the special meeting for a vote.

     Your vote is important, regardless of the number of common shares you hold. Please vote as soon as possible to make sure that your common shares are represented at the special meeting, whether or not you expect to attend the special meeting. To grant your proxy to vote your common shares, please complete, date and sign the accompanying proxy card and return it promptly in the enclosed return envelope. You may, of course, attend the special meeting, revoke your proxy and vote in person even if you already returned your proxy card. If you do not vote by proxy or in person, it will have the same effect as a vote against adoption of the merger agreement and approval of the merger.

				By Order of the Board of Directors,
				Bruce D. Parker
				Chairman of the Board,
				Chief Executive Officer and President

Columbus, Ohio
May 12, 2008

AirNet Systems, Inc.
7250 Star Check Drive
Columbus, Ohio 43217
(614) 409-4900

Proxy Statement
for
Special Meeting of Shareholders
to be held on Wednesday, June 4, 2008

     This proxy statement is being furnished to the shareholders of AirNet Systems, Inc., an Ohio corporation (“AirNet”), in connection with the solicitation of proxies by and on behalf of AirNet’s board of directors for use at the special meeting of the shareholders to be held on Wednesday, June 4, 2008, at the Hilton Columbus of Easton, 3900 Chagrin Drive, Columbus, Ohio 43219, commencing at 10:00 a.m., Eastern Daylight Saving Time.

     This proxy statement and the accompanying proxy card are first being sent to AirNet’s shareholders on or about May 12, 2008.

     At the special meeting, AirNet’s shareholders will be asked to consider and vote upon the following:

•

a proposal to adopt the Agreement and Plan of Merger, dated as of March 31, 2008, by and among AirNet, AirNet Holdings, Inc., a Delaware corporation (“AirNet Holdings”), and AirNet Acquisition, Inc., an Ohio corporation and a wholly-owned subsidiary of AirNet Holdings (“AirNet Acquisition”), and to approve the merger contemplated thereby. AirNet Holdings was formed by Bayside Capital, Inc. to complete the merger. Bayside Capital manages a $500 million special situations fund that invests in the debt and equity of middle market companies that can benefit from operational enhancements, improved access to capital or balance sheet realignments. In the merger:

	•		AirNet Acquisition will be merged with and into AirNet, which will be the surviving corporation and become a wholly-owned subsidiary of AirNet Holdings, and
	•		each common share, $.01 par value per share, of AirNet outstanding immediately prior to the effective time of the merger (other than common shares held by AirNet or AirNet Holdings or any of their respective subsidiaries or common shares with respect to which dissenters’ rights are perfected) will be automatically converted into the right to receive $2.81 in cash, without interest;

	•		a proposal to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger; and
	•		such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

      Your board of directors unanimously recommends that you vote “FOR” adoption of the merger agreement and approval of the merger .

The date of this proxy statement is May 12, 2008

Table of Contents

Summary Term Sheet			1
Recent Developments			8
Questions and Answers About The Merger			9
Cautionary Statement Regarding Forward-Looking Statements			14
The Special Meeting			16
Date, Place and Time			16
Purpose of the Special Meeting			16
Record Date; Quorum			16
Voting and Revocation of Proxies			16
Vote Required; Board Recommendation			17
Cost of Solicitation of Proxies			18
Other Matters			18
The Merger			19
The Parties			19
AirNet			19
AirNet Holdings			20
AirNet Acquisition			20
Bayside Capital			20
Effect of the Merger			20
Background of the Merger			21
AirNet’s Reasons for the Merger; Recommendation of the Board of Directors			29
Opinion of Financial Advisor			32
Overview			32
Valuation Analyses			35
AirNet’s Relationship with BGL			43
Interests of Certain Persons in the Merger			45
Interests of Bruce D. Parker			45
Cash-Out of Outstanding Options			45
Indemnification			46
Certain Material U.S. Federal Income Tax Consequences			46
Accounting Treatment			48
Existing Relationships with Bayside Capital, AirNet Holdings or AirNet Acquisition			49
Rights of Dissenting Shareholders			49
Proposal 1 – The Merger Agreement			51
Structure of the Merger			51
Closing of the Merger			52

SUMMARY TERM SHEET

      This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the merger more fully and for a complete description of the legal terms of the merger and the merger agreement, you should carefully read this entire proxy statement, including the appendices. We have included page references in this summary to direct you to a more complete description of topics discussed in this proxy statement. The merger agreement is attached as Appendix A to this proxy statement. We encourage you to read the merger agreement in its entirety because it is the legal document that governs the merger.

The Parties (page 19)

AirNet Systems, Inc.
7250 Star Check Drive
Columbus, Ohio 43217
(614) 409-4900

     AirNet is a specialty air carrier for time-sensitive deliveries, operating between most major U.S. cities each working day. AirNet is a leading transporter of cancelled checks and related information for the U.S. banking industry. AirNet also provides specialized, high-priority delivery services to customers, primarily those involved in medical testing laboratories, radioactive pharmaceuticals, medical equipment, controlled sensitive media and mission critical parts industries.

     In addition to regularly scheduled delivery services through its air and ground transportation network, AirNet offers on-demand cargo charter delivery services for both bank services and express services customers. AirNet also provides ground pick-up and delivery services throughout the nation seven days per week, primarily through a network of third-party vendors.

AirNet Holdings, Inc.
AirNet Acquisition, Inc.
Bayside Capital, Inc.
1001 Brickell Bay Drive
26 ^th Floor
Miami, Florida 33131
(305) 379-8686

     AirNet Acquisition, Inc., an Ohio corporation, is a wholly-owned subsidiary of AirNet Holdings, Inc., a Delaware corporation. Both AirNet Acquisition and AirNet Holdings are newly-created entities formed solely for the purpose of effecting the merger, and neither has engaged in any other business activity. AirNet Holdings was formed by Bayside Capital, Inc. (“Bayside Capital”), which manages a $500 million special situations fund that invests in the debt and equity of middle market companies that can benefit from operational enhancements,

improved access to capital or balance sheet realignments. With the ability to provide capital through a broad array of securities, Bayside Capital has the experience and resources to help companies quickly resume growth initiatives and improve their strategic position.

Effect of the Merger (page 20)

     AirNet Acquisition will merge with and into AirNet. You will receive $2.81 in cash, without interest, for each common share of AirNet that you own. AirNet will be the surviving corporation in the merger and become a wholly-owned subsidiary of AirNet Holdings.

The Special Meeting (page 16)

     The special meeting will be held on Wednesday, June 4, 2008, at 10:00 a.m., Eastern Daylight Saving Time, at the Hilton Columbus of Easton, 3900 Chagrin Drive, Columbus, Ohio 43219. At the special meeting, shareholders will vote upon a proposal to adopt the merger agreement and approve the merger. The merger agreement provides for the merger of AirNet Acquisition with and into AirNet. You may vote on the proposal to adopt the merger agreement and approve the merger by completing, signing, dating and returning the accompanying proxy card or by attending the special meeting and voting in person.

Record Date; Quorum (page 16)

     You are entitled to vote at the special meeting (either by proxy or in person) if you owned common shares of AirNet at the close of business on May 1, 2008, the record date for the special meeting. On the record date, there were 12,113,808 common shares of AirNet outstanding. You are entitled to one vote on each matter submitted for shareholder approval at the special meeting for each common share that you owned on the record date.

Purchase of Common Shares by AirNet Holdings (page 53)

     In connection with the execution of the merger agreement, AirNet Holdings acquired 1,934,137 common shares of AirNet at $2.81 per share for aggregate consideration of approximately $5.4 million, which amount was paid to AirNet on the date of the merger agreement. These common shares represented approximately 16.0% of AirNet’s outstanding common shares following their acquisition and represented approximately 16.0% of AirNet’s outstanding common shares as of the record date. AirNet Holdings and AirNet also entered into a registration rights agreement that provides AirNet Holdings with a single demand registration right to cause AirNet to register with the Securities and Exchange Commission (the “SEC”) the sale of at least a majority of the common shares AirNet Holdings acquired from AirNet and unlimited piggyback registration rights to register for sale the common shares acquired by AirNet Holdings from AirNet in the event that AirNet otherwise files a registration statement for the sale of common shares with the SEC.

Vote Required (page 17)

     Proposal 1, adoption of the merger agreement and approval of the merger, requires the affirmative vote of the holders of at least a majority of the outstanding common shares of AirNet as of the record date. As a result, an abstention or a failure to vote would have the same effect as

a vote against the adoption of the merger agreement and approval of the merger. AirNet Holdings has the right to vote the 1,934,137 common shares, representing approximately 16.0% of the outstanding common shares as of the record date, that it acquired at the time of the execution of the merger agreement, and has informed AirNet that AirNet Holdings will vote its common shares in favor of adoption of the merger agreement and approval of the merger. If the holders of at least a majority of the outstanding common shares of AirNet as of the record date either do not vote in favor of adoption of the merger agreement and approval of the merger, abstain from voting or fail to vote, then AirNet will be required to pay to AirNet Acquisition a termination fee in cash equal to $1,400,000 plus reimbursement of reasonable, out-of-pocket expenses incurred by AirNet Holdings or AirNet Acquisition in connection with the merger agreement (so long as AirNet Holdings voted its common shares in favor of adoption of the merger agreement and approval of the merger).

     Proposal 2, approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies, requires the affirmative vote of the holders of at least a majority of AirNet’s common shares present and entitled to vote at the special meeting. An abstention will not count as a vote cast on Proposal 2 but will count for the purpose of determining whether a quorum is present. However, if you “ABSTAIN” from voting on Proposal 2, then it will have the same effect as a vote “AGAINST” Proposal 2.

Recommendation to Shareholders (page 17)

     Your board of directors has unanimously approved the merger and the merger agreement, believes the merger and the merger agreement are advisable, fair to and in the best interests of AirNet and its shareholders and recommends that you vote “FOR” Proposal 1, adoption of the merger agreement and approval of the merger, and “FOR” Proposal 2, approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger.

Opinion of Financial Advisor (page 32 and Annex B)

     In deciding to approve the merger and the merger agreement, AirNet’s board of directors considered, among other factors discussed below under the caption “The Merger – AirNet’s Reasons for the Merger; Recommendation of the Board of Directors,” the opinion of Brown, Gibbons, Lang & Company Securities, Inc. (“BGL”), one of the board’s financial advisors, that, as of March 29, 2008, the date the board of directors considered and approved the merger and the merger agreement, the $2.81 per share cash consideration to be paid in the merger was fair to AirNet’s shareholders from a financial point of view. The opinion of BGL is attached as Appendix B to this proxy statement. We encourage you to read the opinion.

Rights of Dissenting Shareholders (page 49)

     Under Ohio law, if you do not vote for adoption of the merger agreement and approval of the merger, you will have the right to dissent from the merger and demand the “fair cash value” of your AirNet common shares. This right is generally known as “dissenters’ rights.” To perfect your dissenters’ rights, you must strictly follow all of the requirements of Section 1701.85 of the

Ohio Revised Code, the Ohio law governing dissenters’ rights. A copy of Section 1701.85 is attached as Appendix C to this proxy statement.

Interests of Certain Persons in the Merger (page 45)

     Executive officers and directors of AirNet have interests in the merger that are different from, or in addition to, the interests of other shareholders. These interests include:

	•		AirNet’s non-employee directors hold a small number of in-the-money, vested and unvested options to purchase common shares of AirNet. Under the merger agreement, each outstanding option (whether or not then exercisable) will be canceled at the effective time of the merger, and the holder of the option will receive a cash payment equal to the excess, if any, of $2.81 over the exercise price per common share subject to the option, multiplied by the number of common shares subject to the unexercised portion of the option. The total amount payable to AirNet’s non-employee directors pursuant to the cancellation of their in-the-money, vested and unvested options to purchase common shares of AirNet is less than $23,000 in the aggregate;
	•		under the merger agreement, the surviving corporation will indemnify, advance expenses to and hold harmless each present and former officer and director of AirNet with respect to acts and omissions occurring on or prior to the effective time of the merger to the fullest extent permitted by law throughout the period of all applicable statutes of limitation and will continue in place AirNet’s current directors’ and officers’ liability insurance for three years, up to a limit of annual insurance premiums no greater than 200% of the current premiums; and
	•		under the employment agreement between AirNet and Bruce D. Parker, AirNet’s chairman of the board, chief executive officer and president, upon the closing of the merger (which constitutes a “change of control” event under the employment agreement), Mr. Parker will be entitled to receive a lump sum payment of $360,000, which represents his annual base salary, plus any bonus accrued through the closing date, which amount AirNet estimates would be approximately $180,000 if the merger closed on June 30, 2008.

Certain Material U.S. Federal Income Tax Consequences (page 46)

     The merger will be a taxable transaction for U.S. federal income tax purposes to U.S. holders of AirNet common shares. For U.S. federal income tax purposes, you will recognize gain or loss in an amount equal to the difference between the cash you receive and your tax basis in your common shares that you exchange for cash. In addition, you may be subject to taxes under applicable state, local and other tax laws. We urge you to consult your own tax advisor to understand fully how the merger will affect you.

No Solicitation by AirNet (page 59)

     Under the merger agreement, AirNet was required to terminate any existing activities, discussions or negotiations concerning any acquisition transaction involving AirNet. In addition, AirNet may not encourage, solicit or initiate any acquisition proposals. AirNet’s board of directors may, however, consider an unsolicited acquisition proposal, and AirNet may enter into a binding agreement with respect to an unsolicited acquisition proposal that is deemed by the board of directors, upon consultation with outside legal counsel and an independent financial advisor, to be superior to the merger. In the event that AirNet were to enter into a binding agreement that the board of directors deems to be superior to the merger, AirNet will be required to pay AirNet Acquisition a termination fee in cash equal to $1,400,000, plus reimbursement of reasonable, out-of-pocket expenses incurred by AirNet Holdings or AirNet Acquisition in connection with the merger agreement.

Conditions to the Closing of the Merger (page 62)

     Before the parties may complete the merger, they must satisfy or waive (to the extent permitted by law) a number of conditions. These include that:

	•		AirNet’s shareholders adopt the merger agreement and approve the merger at the special meeting;
	•		no law that restrains, enjoins or otherwise prohibits consummation of the merger shall have been entered or enacted and continue to be in effect;
	•		any approvals required by the Federal Aviation Administration shall have been obtained; and
	•		the parties materially comply with their respective representations, warranties and covenants in the merger agreement.

     In addition, before AirNet Holdings and AirNet Acquisition are required to complete the merger, a number of additional conditions must be satisfied or waived (to the extent permitted by law). These include that:

	•		since the date of the merger agreement, no facts, circumstances, events, changes or developments have occurred which have had, or would reasonably be likely to have, a material adverse effect on AirNet;
	•		the board of directors of AirNet has not changed its recommendation in favor of the merger or approved or recommended any acquisition proposal other than the merger, or failed to reconfirm its recommendation in favor of the merger in response to a request by AirNet Holdings or AirNet Acquisition to do so; and
	•		there are no pending or threatened lawsuits that have a reasonable likelihood of success and that: (i) seek to restrain or prohibit the merger; (ii) seek to obtain a material amount of damages from AirNet, AirNet Holdings or AirNet Acquisition;

(iii) seek to prohibit or limit AirNet’s ownership of a material portion of its assets or operation of a material portion of its business (or would so prohibit or limit AirNet Holdings); (iv) seek to compel AirNet or AirNet Holdings to dispose of or hold separate a material portion of their business or assets as a result of the merger; (v) seek to prohibit AirNet Holdings from effectively controlling in any material respect AirNet’s business; or (vi) otherwise would have a material adverse effect on AirNet.

Termination of the Merger Agreement (page 64)

     The parties may agree jointly to terminate the merger agreement at any time. In addition, either AirNet or AirNet Holdings may terminate the merger agreement if:

	•		AirNet’s shareholders do not adopt the merger agreement and approve the merger at the special meeting; or
	•		any judgment, order, injunction or decree permanently restraining, enjoining or prohibiting the merger becomes final and cannot be appealed or any judgment, order, injunction or decree permanently or temporarily restraining, enjoining or prohibiting the merger is entered and has not been dismissed or otherwise vacated within 45 days of its original entry date.

     AirNet may also terminate the merger agreement if:

	•		the closing of the merger has not occurred by August 31, 2008, so long as AirNet’s failure to perform its obligations under the merger agreement did not in any manner proximately cause the failure to close by that date;
	•		AirNet Holdings or AirNet Acquisition materially breaches any of its representations, warranties or covenants in the merger agreement and does not cure the breach within 30 days after AirNet provides them notice of the breach; or
	•		AirNet receives an unsolicited acquisition proposal that the board of directors deems is a superior proposal, and AirNet Holdings does not make an offer that is deemed by the board of directors of AirNet to be at least as favorable to AirNet’s shareholders from a financial point of view as the superior proposal.

     AirNet Holdings may also terminate the merger agreement if:

	•		the closing of the merger has not occurred by July 31, 2008, so long as AirNet Holdings’ failure to perform its obligations under the merger agreement did not in any manner proximately cause the failure to close by that date;
	•		AirNet materially breaches any of its representations, warranties or covenants in the merger agreement and does not cure the breach within 30 days after AirNet Holdings provides AirNet notice of the breach;

	•		AirNet’s board of directors changes its recommendation in favor of the merger or publicly proposes to do so, or fails to recommend or reconfirm its recommendation of, or withdraws or adversely modifies its recommendation in favor of, the merger;
	•		AirNet materially breaches the non-solicitation provisions of the merger agreement or delivers a notice that AirNet intends to accept or recommend the acceptance of a superior proposal; or
	•		AirNet’s transaction expenses exceed an agreed upon budget for such expenses.

Termination Fee (page 66)

     AirNet must pay AirNet Acquisition a $1,400,000 termination fee, plus all documented, reasonable out-of-pocket expenses that AirNet Holdings and AirNet Acquisition incur in connection with the merger, if any of the following occur:

	•		(i) AirNet receives a bona fide acquisition proposal (or any person publicly announces an intention to do so) after March 31, 2008 but prior to termination of the merger agreement, (ii) the merger agreement is terminated by AirNet Holdings after July 31, 2008 or by AirNet after August 31, 2008, and (iii) within nine months of the termination date, AirNet enters into a letter of intent, memorandum of understanding, merger agreement or other similar agreement with respect to the acquisition of a majority of AirNet’s assets or capital stock or recommends or otherwise does not oppose such an acquisition;
	•		the merger agreement is terminated by AirNet Holdings because: (i) AirNet materially breached any or its representations, warranties or covenants in the merger agreement and did not cure the breach within 30 days after AirNet Holdings provided AirNet notice of the breach, (ii) AirNet’s board of directors changed its recommendation in favor of the merger or publicly proposed to do so, or failed to recommend or reconfirm its recommendation of, or withdrew or adversely modified its recommendation in favor of, the merger, (iii) AirNet materially breached the non-solicitation provisions of the merger agreement or delivered a notice that it intends to accept or recommend the acceptance of a superior proposal or (iv) AirNet’s transaction expenses exceeded an agreed upon budget for such expenses;
	•		the merger agreement is terminated by AirNet or AirNet Holdings because AirNet’s shareholders did not adopt the merger agreement and approve the merger at the special meeting (so long as all of the common shares held by AirNet Holdings were voted in favor of the merger); or
	•		the merger agreement is terminated by AirNet or AirNet Holdings because any judgment, order, injunction or decree permanently restraining, enjoining or prohibiting the merger became final and could not be appealed or any judgment, order, injunction or decree permanently or temporarily restraining, enjoining or prohibiting the merger was entered and was not dismissed or otherwise vacated within 45 days of its original entry date.

RECENT DEVELOPMENTS

     On April 29, 2008, a lawsuit was filed in the Court of Common Pleas of Franklin County, Ohio, against AirNet, AirNet’s directors, Bayside Capital, AirNet Holdings and AirNet Acquisition. The suit seeks expedited discovery and asks the court to schedule a hearing on a yet to be filed motion for a preliminary injunction to enjoin the merger. The plaintiff appears to be alleging that the defendants have breached a “duty of candor” by omitting certain information from the preliminary proxy statement filed with the SEC on April 16, 2008.

     The plaintiff alleges that the defendants failed to disclose, among other things, the results of BGL’s discounted cash flow analysis (which was between $1.77 and $5.35 per share) or the liquidation valuation analysis based on management projections (which was between $1.13 and $3.52 per share).

     In addition, the plaintiff alleges that the defendants failed to disclose in the proxy statement the allegedly “positive financial results” set forth in AirNet’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (the “2007 Form 10-K”), which was filed with the SEC on March 31, 2008. The 2007 Form 10-K reports that AirNet’s income from continuing operations before interest and income taxes for 2007 was $5.8 million, including the effect of $2.2 million of non-cash asset impairment charges, compared to a $10.1 million loss from continuing operations before interest and income taxes for 2006, including the effect of $24.6 million in non-cash asset impairment charges. Net of the non-cash impairment charges, AirNet’s income from continuing operations before interest and income taxes declined from $14.5 million in 2006 to $8.0 million in 2007, which AirNet believes is reflective of the continued declines in bank services revenues as a result of the decline in cancelled check volumes, as described in both the 2007 Form 10-K and this proxy statement.

     The plaintiff lastly alleges that AirNet enacted unreasonable deal protection devices by selling 16% of AirNet’s equity at $2.81 per share to AirNet Holdings and agreeing to pay AirNet Holdings, in certain circumstances, a termination fee of $1,400,000, plus reasonable out-of-pocket expenses, all of which are described in this proxy statement.

     AirNet and the other defendants believe that the plaintiff’s claims are entirely without merit and intend to vigorously defend against the plaintiff’s claims.

     On May 12, 2008, AirNet reported its first quarter 2008 financial results and filed a Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 (the “2008 Q1 Form 10-Q”). In the 2008 Q1 Form 10-Q, AirNet reported total net revenues of $38.2 million for the three months ended March 31, 2008, compared to $41.5 million for the same period in 2007, a decline of approximately 8%. AirNet also reported that income from operations before income taxes decreased to $1.0 million for the first quarter in 2008 from $2.0 million in the prior year first quarter. In addition, AirNet recognized an income tax benefit of approximately $8.3 million in the first quarter of 2008 primarily as a result of a discretionary income tax method change approved by the Internal Revenue Service on March 11, 2008, as reported in the 2007 Form 10-K. As a result, AirNet reported that net income for the first quarter of 2008 was $9.3 million, or $0.90 per diluted common share, compared to net income of $1.9 million, or $0.18 per diluted common share, for the prior year period.

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q:		What is the proposed transaction?
A:		AirNet Holdings will acquire AirNet by merging AirNet Acquisition, a wholly-owned subsidiary of AirNet Holdings, into AirNet. AirNet will continue as the surviving corporation in the merger and become a wholly-owned subsidiary of AirNet Holdings. AirNet will no longer be publicly held, and its common shares will no longer be traded on the American Stock Exchange (“AMEX”). In connection with the execution of the merger agreement, AirNet Holdings acquired 1,934,137 common shares of AirNet at $2.81 per share for aggregate consideration of approximately $5.4 million, which amount was paid to AirNet on the date of the merger agreement. These common shares represented approximately 16.0% of AirNet’s outstanding common shares following their acquisition and represented approximately 16.0% of AirNet’s outstanding common shares as of the record date.
Q:		What will I receive for my common shares after the merger is completed?
A:		You will be entitled to receive $2.81 in cash, without interest, for each common share that you own at the effective time of the merger.
Q:		Why did the board of directors approve the merger and the merger agreement?
A:		The board of directors considered a number of factors in approving the merger and the merger agreement, including:

	•		the approximately 94% premium that shareholders will receive for each common share of AirNet over the per share closing price on March 28, 2008, the last trading day prior to the date of execution of the merger agreement, as well as the approximately 80% and 67% premiums compared to the one week and one month average trading price of the common shares before the date of execution of the merger agreement, respectively;
	•		historical market prices of AirNet’s common shares;
	•		AirNet’s business and earnings prospects and short-term and long-term business risks, including the anticipated continued decline in AirNet’s revenues from its bank customers and the risks associated with transforming AirNet’s business from a bank network services business to an express cargo business focused on the growth of the dedicated charter segment;
	•		the opinion of BGL as to the fairness of the $2.81 per share merger consideration from a financial point of view to the shareholders of AirNet, and the related analyses presented by BGL;
	•		the terms and conditions of the merger agreement, including the right of the board of directors to terminate the merger agreement in the exercise of its fiduciary duties in

			connection with receipt of an acquisition proposal deemed to be superior to that offered by AirNet Holdings;
	•		AirNet Holdings’ stated intentions with respect to AirNet’s business, including its stated intentions regarding AirNet’s employees; and
	•		various other factors, as described under the caption “The Merger – AirNet’s Reasons for the Merger; Recommendation of the Board of Directors.”

Q:		Who can vote at the special meeting?
A:		Holders of common shares of AirNet at the close of business on May 1, 2008, the record date, may vote at the special meeting.
Q:		What is the difference between holding common shares as a shareholder of record and as a beneficial owner?
A:		Most of our shareholders hold their common shares through a broker, trustee or other nominee (such as a bank) rather than directly in their own name. As summarized below, there are some distinctions between common shares owned of record and those owned beneficially.

	•		Shareholder of Record . If your common shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered to be the shareholder of record with respect to those common shares and these proxy materials are being sent directly to you. As the shareholder of record, you have the right to grant your proxy directly to the proxy holders named in the accompanying proxy card or to vote in person at the special meeting. A proxy card accompanies this proxy statement for you to use.
	•		Beneficial Owner . If your common shares are held in a brokerage account, by a trustee or by another nominee (such as a bank), you are considered the beneficial owner of common shares held in “street name,” and these proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you have the right to direct your broker, trustee or other nominee how to vote and are also invited to attend the special meeting. Because a beneficial owner is not the shareholder of record, you may not vote your common shares in person at the special meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your common shares, giving you the right to vote the common shares at the special meeting. Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in directing the broker, trustee or nominee how to vote your common shares, and you should carefully review those instructions and contact your broker, trustee or nominee if you have any questions.

Q:		What votes are required to adopt the proposals?
A:		To be adopted, the holders of at least a majority of the outstanding common shares of AirNet as of the record date must vote “FOR” Proposal 1, adoption of the merger

		agreement and approval of the merger. In connection with the execution of the merger agreement, AirNet Holdings acquired 1,934,137 common shares of AirNet at $2.81 per share for aggregate consideration of approximately $5.4 million, which amount was paid to AirNet on the date of the merger agreement. These common shares represented approximately 16.0% of AirNet’s outstanding common shares as of the record date, and AirNet Holdings has informed AirNet that AirNet Holdings intends to vote its common shares “FOR” adoption of the merger agreement and approval of the merger. See the discussion under the caption “Security Ownership of Certain Beneficial Owners and Management.”
		The adoption of Proposal 2, the approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies, requires the affirmative vote of the holders of at least a majority of AirNet’s common shares present in person or by properly executed proxy and entitled to vote at the special meeting.
Q:		What do I need to do now?
A:		After carefully reading and considering the information in this proxy statement, please mail your signed and completed proxy card in the enclosed return envelope as soon as possible so that your common shares can be voted at the special meeting.
Q:		How are votes counted?
A:		For Proposal 1, the adoption of the merger agreement and approval of the merger, you may vote “FOR,” “AGAINST” or “ABSTAIN.” The holders of at least a majority of the outstanding common shares of AirNet as of the record date must vote “FOR” Proposal 1 in order for Proposal 1 to be approved. An abstention will not count as a vote cast on Proposal 1, but will count for the purpose of determining whether a quorum is present. As a result, if you “ABSTAIN” from voting on Proposal 1, it has the same effect as a vote “AGAINST” the adoption of the merger agreement and approval of the merger.
		For Proposal 2, the approval of the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Proposal 2 requires the affirmative vote of the holders of at least a majority of our common shares present, in person or by properly executed proxy, and entitled to vote at the special meeting. An abstention will not count as a vote cast on Proposal 2, but will count for the purpose of determining whether a quorum is present. However, if you “ABSTAIN” from voting on Proposal 2, it has the same effect as a vote “AGAINST” Proposal 2, since the required vote is based on the number of common shares present in person or by properly executed proxy and entitled to vote at the special meeting.
		If you sign and return your proxy card but do not indicate how you want to vote, your proxy will be voted (i) “FOR” Proposal 1, adoption of the merger agreement and approval of the merger, (ii) “FOR” Proposal 2, approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit

		additional proxies, and (iii) in accordance with the discretion of the persons named as proxies as to any other matters properly brought before the special meeting for a vote.
Q:		Can I change my vote after I have mailed my signed proxy card?
A:		Yes. You can change your vote at any time before your proxy is voted at the special meeting. You can do this in one of three ways. First, you can attend the special meeting and vote in person. Your attendance alone will not, however, revoke your proxy. Second, you can complete and submit a new proxy card. Third, you can send a written notice to the secretary of AirNet stating that you would like to revoke your proxy. If you have instructed a broker, trustee or other nominee to vote your common shares, you must follow the directions received from your broker, trustee or nominee to change those instructions.
Q:		If my broker holds my common shares in “street name,” will my broker vote my common shares for me?
A:		Yes, but only if you provide specific instructions to your broker on how to vote. You should follow the directions provided by your broker regarding how to instruct your broker to vote your common shares. Unless you follow the instructions, your common shares will not be voted. If your broker does not vote your common shares because you fail to provide voting instructions, the effect will be a vote “AGAINST” Proposal 1 because adoption of Proposal 1 requires the affirmative vote of a majority of our outstanding common shares as of the record date. A broker non-vote will not count as a vote on Proposal 2 and will not affect the outcome of the vote.
Q:		Should I send in my share certificates now?
A:		No. After the merger is completed, you will receive written instructions for delivering your share certificates in exchange for the cash payment.
Q:		Do I have the right to dissent and seek appraisal of the “fair cash value” of my common shares if the merger is completed?
A:		Yes. If you wish to exercise your dissenters’ rights, you must not vote in favor of adoption of the merger agreement and approval of the merger, and you must strictly follow all of the other requirements of Section 1701.85 of the Ohio Revised Code, the Ohio law governing dissenters’ rights. If you comply with these requirements, you will have the right to receive the “fair cash value” of your common shares, as determined under Section 1701.85, instead of the $2.81 per share as provided in the merger agreement. The amount you will receive if you exercise your dissenters’ rights may be equal to, more than or less than $2.81 per share. See the discussion under the caption “The Merger – Rights of Dissenting Shareholders.”
Q:		Will I owe taxes as a result of the merger?
A:		In general, you will recognize gain or loss for U.S. federal income tax purposes to the extent of the difference between the cash you receive and your tax basis in the common

		shares that you exchange for cash. The cash you receive also may be subject to taxes under applicable state, local and other tax laws. See the discussion under the caption “The Merger – Certain Material U.S. Federal Income Tax Consequences.”
Q:		When is the merger expected to be completed?
A:		We are working toward completing the merger as quickly as possible. If the shareholders adopt the merger agreement and approve the merger at the special meeting and the other conditions to the merger are satisfied, we expect to complete the merger shortly after the special meeting.
Q:		Who will bear the cost of the solicitation?
A:		The expense of soliciting proxies for the special meeting on behalf of the AirNet board of directors will be borne by AirNet. We have retained Georgeson Inc., New York, New York, a proxy solicitation firm, to aid in the solicitation of proxies for the special meeting at a cost of approximately $8,500, plus reimbursement of out-of-pocket fees and expenses. In addition, we may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of common shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by certain of our directors, officers and employees, personally or by telephone, facsimile or other means of communication. No additional compensation will be paid to our directors, officers or employees for such services.
Q:		Who can help answer my questions?
A:		If you have additional questions about the special meeting or the merger, including the procedures for voting your common shares, or if you would like additional copies, without charge, of this proxy statement, you should contact our proxy solicitor, Georgeson Inc., toll-free at (877) 484-8195 (banks and brokers may call (212) 440-9800). If your broker holds your common shares, you may also call your broker for additional information.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This proxy statement contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995) relating to AirNet that are based upon management’s current plans and expectations. These forward-looking statements include, among others:

	•		statements concerning the prospects for completing the merger and the possible or assumed future results of operations of AirNet set forth under the captions “The Merger – Background of the Merger,” “The Merger – AirNet’s Reasons for the Merger; Recommendation of the Board of Directors” and “The Merger – Opinion of Financial Advisor,” including any forecasts and projections referred to therein;
	•		any statements preceded or followed by, or that include, the words “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects” or similar expressions; and
	•		other statements contained in this proxy statement regarding matters that are not historical facts.

     Because these forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. The factors that could cause actual results to differ materially include, among others:

	•		the failure to satisfy any of the closing conditions in the merger agreement, including the failure of AirNet’s shareholders to adopt the merger agreement and approve the merger;
	•		the failure to obtain any required regulatory approvals of the merger on the proposed terms and schedule;
	•		uncertainty surrounding the merger making it more difficult to maintain relationships with AirNet’s customers and team members;
	•		potential regulatory changes by the Federal Aviation Administration, the Department of Transportation and the Transportation Security Administration, which could increase the regulation of AirNet’s business, or the Federal Reserve, which could change the competitive environment of transporting cancelled checks;
	•		changes in the way the Federal Aviation Administration is funded which could increase AirNet’s operating costs;
	•		changes in check processing and shipment patterns of bank customers;
	•		changes in check processing and shipment patterns of the Federal Reserve System’s Check Relay Network;
	•		the continued acceleration in the migration of AirNet’s bank services customers to electronic alternatives to the physical movement of cancelled checks;
	•		AirNet’s ability to reduce its cost structure to match declining revenues and operating expenses;

	•		disruptions to the Internet or AirNet’s technology infrastructure, including those impacting AirNet’s computer systems and corporate website;
	•		the impact of intense competition on AirNet’s ability to maintain or increase its prices for express services (including fuel surcharges in response to rising fuel costs);
	•		the impact of prolonged weakness in the U.S. economy on time-critical shipment volumes;
	•		significant changes in the volume of shipments transported on AirNet’s air transportation network, customer demand for AirNet’s various services or the prices it obtains for its services;
	•		the acceptance by AirNet’s weekday bank services customers of AirNet’s pricing structure;
	•		pilot shortages which could result in increased operating costs, a reduction in AirNet’s flight schedule or require subcontracting of certain routes;
	•		disruptions to operations due to adverse weather conditions, air traffic control-related constraints or aircraft accidents;
	•		potential changes in locally and federally mandated security requirements;
	•		increases in aviation fuel costs not fully offset by AirNet’s fuel surcharge program;
	•		acts of war and terrorist activities;
	•		technological advances and increases in the use of electronic funds transfers;
	•		the availability and cost of financing required for operations;
	•		other economic, competitive and domestic and foreign governmental factors affecting AirNet’s markets, prices and other facets of its operations; and
	•		other risks detailed from time to time in the reports that AirNet files with the SEC.

     Except for ongoing obligations to disclose material information as required by the federal securities laws, AirNet undertakes no obligation to release publicly any revisions or updates to any forward-looking statements to reflect actual results or events, changes in assumptions or changes in factors affecting such forward-looking statements.

THE SPECIAL MEETING

Date, Place and Time

     This proxy statement is being furnished to AirNet’s shareholders in connection with the solicitation of proxies by and on behalf of AirNet’s board of directors for use at the special meeting to be held on Wednesday, June 4, 2008, at the Hilton Columbus of Easton, 3900 Chagrin Drive, Columbus, Ohio 43219, commencing at 10:00 a.m., Eastern Daylight Saving Time.

Purpose of the Special Meeting

     At the special meeting, we will ask you to (i) adopt the Agreement and Plan of Merger dated as of March 31, 2008, by and among AirNet, AirNet Holdings and AirNet Acquisition and approve the merger contemplated thereby and (ii) approve the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger. In addition, you will be asked to transact any other business that is properly brought before the special meeting. We are not currently aware of any additional business that may come before the special meeting. A copy of the merger agreement is attached as Appendix A to this proxy statement.

Record Date; Quorum

     Only holders of record of common shares of AirNet at the close of business on May 1, 2008, the record date, are entitled to notice of, and to vote at, the special meeting. On the record date, there were 12,113,808 common shares of AirNet outstanding, held by approximately 785 holders of record.

     Each common share outstanding on the record date entitles the holder to one vote on each matter submitted for shareholder approval at the special meeting. The presence, in person or by properly executed proxy, at the special meeting of the holders of at least majority of the outstanding common shares entitled to vote at the special meeting will constitute a quorum for the transaction of business.

Voting and Revocation of Proxies

     A form of proxy card for use by shareholders at the special meeting accompanies this proxy statement. All properly executed proxy cards that are received prior to or at the special meeting and not revoked will be voted at the special meeting in accordance with the instructions contained in the proxy cards. If a shareholder executes and returns a proxy card and does not specify otherwise, the common shares represented by the proxy card will be voted “FOR” Proposal 1, adoption of the merger agreement and approval of the merger, and “FOR” Proposal 2, approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger. In such event, the holder of those common shares will not have the right to dissent from the merger and demand payment of the “fair cash value” of the holder’s common shares.

     A properly executed proxy card marked “ABSTAIN” will be included for purposes of determining whether there is a quorum at the special meeting. However, a proxy card marked “ABSTAIN” will not be voted at the special meeting. Because the affirmative vote of the holders of at least a majority of the outstanding common shares is required to adopt the merger agreement and approve the merger, a proxy card marked “ABSTAIN” will have the same effect as a vote “AGAINST” Proposal 1, adoption of the merger agreement and approval of the merger. Because the affirmative vote of the holders of at least a majority of AirNet’s common shares present in person or by properly executed proxy and entitled to vote at the special meeting is required to adopt Proposal 2, approval of the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger, a proxy card marked “ABSTAIN” will have the same effect as a vote “AGAINST” Proposal 2.

     Under AMEX rules, brokers who hold common shares in street name for clients typically have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, absent specific instructions from the beneficial owner of the common shares, brokers are not allowed to exercise their voting discretion with respect to non-routine matters, such as adoption of the merger agreement and approval of the merger. Proxies submitted without a vote by the brokers on these matters are referred to as “broker non-votes.” Broker non-votes will be included for purposes of determining whether there is a quorum at the special meeting. However, because the affirmative vote of the holders of at least a majority of the outstanding common shares as of the record date is required to adopt the merger agreement and approve the merger, broker non-votes will have the same effect as a vote “AGAINST” Proposal 1, adoption of the merger agreement and approval of the merger. A broker non-vote will not count as a vote on Proposal 2 and will not affect the outcome of the vote.

     A shareholder who has executed and returned a proxy card may revoke the proxy at any time before it is voted at the special meeting by executing and returning a proxy card bearing a later date, filing a written notice of revocation with the secretary of AirNet stating that the proxy is revoked or attending the special meeting and voting in person. Simply attending the special meeting without voting will not revoke a proxy. If your common shares are held in street name by a bank, broker or other nominee, you must follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.

Vote Required; Board Recommendation

     Under Ohio law and AirNet’s amended and restated articles of incorporation, the holders of at least a majority of the outstanding common shares of AirNet as of the record date must vote “FOR” Proposal 1, adoption of the merger agreement and approval of the merger. Therefore, the affirmative vote of the holders of at least 6,056,904 common shares will be necessary to adopt the merger agreement and approve the merger. In connection with the execution of the merger agreement, AirNet Holdings acquired 1,934,137 common shares of AirNet at $2.81 per share for aggregate consideration of approximately $5.4 million, which amount was paid to AirNet on the date of the merger agreement. These common shares represented approximately 16.0% of AirNet’s outstanding common shares as of the record date, and AirNet Holdings has informed AirNet that AirNet Holdings intends to vote its common shares “FOR” adoption of the merger

agreement and approval of the merger. See the discussion under the caption “Security Ownership of Certain Beneficial Owners and Management.” As a result of this arrangement, the affirmative vote of holders of an additional 4,122,767 common shares is required to adopt the merger agreement and approve the merger.

      Your board of directors unanimously recommends that you vote “FOR” Proposal 1, adoption of the merger agreement and approval of the merger.

     The affirmative vote of the holders of at least a majority of the common shares present in person or by properly executed proxy and entitled to vote at the special meeting is required for approval of Proposal 2, the adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger.

      Your board of directors unanimously recommends that you vote “FOR” Proposal 2, adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger.

Cost of Solicitation of Proxies

     AirNet will bear the costs of the solicitation of proxies for the special meeting on behalf of AirNet’s board of directors. In addition to solicitation of proxies by mail, the directors, officers and employees of AirNet may, without receiving any additional compensation, solicit proxies by personal interview, telephone, facsimile or other means of communication. Arrangements will also be made with brokerage firms, banks and other custodians, nominees and fiduciaries who are record holders of common shares for the forwarding of solicitation materials to the beneficial owners of such common shares. AirNet will reimburse these brokers, banks, custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in connection therewith.

     We have retained Georgeson Inc., New York, New York, to aid in the solicitation of proxies for the special meeting. Georgeson Inc. will receive a base fee of $8,500, plus reimbursement of out-of-pocket fees and expenses for its proxy solicitation services.

Other Matters

     AirNet’s board of directors is not aware of any matters to be presented at the special meeting, other than Proposal 1, adoption of the merger agreement and approval of the merger, and Proposal 2, adjournment or postponement of the special meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient affirmative votes at the time of the special meeting to adopt the merger agreement and approve the merger, as set forth in the notice of special meeting of shareholders attached to this proxy statement. If any other matters are properly presented at the special meeting, the persons named as proxies in the accompanying proxy card will have discretionary authority to vote the common shares represented by duly executed proxies on those matters in accordance with their discretion and judgment.

      You should not send any certificates representing common shares with your proxy card. If the merger is completed, the procedure for the exchange of certificates representing common shares will be as set forth in this proxy statement. See the discussion under the caption “Proposal 1 – The Merger Agreement – Exchange of Share Certificates.”

THE MERGER

The Parties

      AirNet . AirNet Systems, Inc., an Ohio corporation, is a specialty air carrier for time-sensitive deliveries, operating between most major U.S. cities each working day. AirNet is a leading transporter of cancelled checks and related information for the U.S. banking industry. AirNet also provides specialized, high-priority delivery services to customers, primarily those involved in medical testing laboratories, radioactive pharmaceuticals, medical equipment, controlled sensitive media and mission critical parts industries.

     In addition to regularly scheduled delivery services through its air and ground transportation network, AirNet offers on-demand cargo charter delivery services for both bank services and express services customers. AirNet also provides ground pick-up and delivery services throughout the nation seven days per week, primarily through a network of third-party vendors.

     AirNet’s air and ground network provides highly reliable, time-critical delivery services to its customers. Later pick-up and earlier delivery times than those offered by other national carriers is one of the primary differentiating characteristics of AirNet’s time-critical delivery network. AirNet’s flight schedule is designed to provide delivery times between midnight and 8:00 a.m., providing earlier delivery times than those generally available through other national carriers. AirNet uses a number of proprietary customer service and management information systems to sort, dispatch, track and control the flow of packages throughout AirNet’s delivery system. AirNet provides customer service 24 hours per day, seven days a week to assist customers with shipment orders, inquiries, supply requests and proof of delivery documentation.

     AirNet plans to continue providing transportation services to the banking industry, but expects that its bank services revenues will continue to decline at an accelerating rate in future periods as a result of the increasing use by bank services customers of image products and other electronic alternatives to the physical movement of cancelled checks. During 2008, as a result of decreased demand for air transportation services, AirNet has continued to receive a number of service cancellations from its banking customers. These cancellations, which take effect at various times during 2008, do not impact AirNet’s banking revenues on a full year basis for the year they take effect. The full financial effect of such service cancellations is not realized until reporting periods that commence on or after the effective date of the cancellations. The net cancellations which are effective at various dates throughout 2008 represented approximately $14.8 million of revenues on an annual basis, including approximately $3.0 million of fuel surcharge revenues. The 2008 service cancellations, when combined with the reduction in AirNet’s air transportation network, will result in a significant further decline in AirNet’s bank services revenues during the remainder of 2008 and thereafter.

     AirNet’s principal executive offices are located at 7250 Star Check Drive, Columbus, Ohio 43217; the telephone number is (614) 409-4900.

      AirNet Holdings . AirNet Holdings, Inc. is a Delaware corporation formed by Bayside Capital on March 25, 2008, solely for the purpose of effecting the merger and, in connection with the execution of the merger agreement, purchasing 1,934,137 common shares of AirNet. Bayside Opportunity Fund, L.P. (“Bayside Opportunity Fund”), which is managed by Bayside Capital, provided the funding necessary to complete the acquisition of such common shares by AirNet Holdings. AirNet Holdings has not engaged in any business activity other than in connection with the merger. The principal executive offices of AirNet Holdings are located at 1001 Brickell Bay Drive, Miami, Florida 33131; the telephone number is (305) 379-8686.

      AirNet Acquisition . AirNet Acquisition, Inc. is an Ohio corporation formed by Bayside Capital on March 26, 2008, solely for the purpose of effecting the merger. AirNet Acquisition has not engaged in any business activity other than in connection with the merger. AirNet Acquisition is a wholly-owned subsidiary of AirNet Holdings. The principal executive offices of AirNet Acquisition are located at 1001 Brickell Bay Drive, Miami, Florida 33131; the telephone number is (305) 379-8686.

      Bayside Capital . Bayside Capital, Inc., a Delaware corporation, manages Bayside Opportunity Fund, a $500 million special situations fund that invests in the debt and equity of middle market companies that can benefit from operational enhancements, improved access to capital or balance sheet realignments. With the ability to provide capital through a broad array of securities, Bayside Capital has the experience and resources to help companies quickly resume growth initiatives and improve their strategic position. Bayside Capital is an affiliate of H.I.G. Capital, LLC (“H.I.G. Capital”), a leading private equity investment firm specializing in acquisitions and recapitalizations of middle market businesses. Based in Miami, and with offices in Atlanta, Boston, and San Francisco in the U.S., as well as affiliate offices in London, Hamburg and Paris in Europe, H.I.G. Capital specializes in providing capital to small and medium-sized companies with attractive growth potential. Since its founding, H.I.G. Capital has completed over 75 transactions and currently manages a portfolio of over 50 companies with combined revenues of over $5 billion. Bayside Capital’s principal executive offices are located at 1001 Brickell Bay Drive, Miami, Florida 33131; the telephone number is (305) 379-8686.

Effect of the Merger

     At the effective time of the merger, AirNet Acquisition will be merged with and into AirNet, which will be the surviving corporation in the merger and will become a wholly-owned subsidiary of AirNet Holdings. Each common share of AirNet outstanding immediately prior to the effective time (other than common shares held by AirNet or AirNet Holdings or any of their respective subsidiaries or common shares with respect to which dissenters’ rights are perfected) will be automatically converted into the right to receive $2.81 in cash, without interest. Following the effective time of the merger, AirNet will no longer be publicly held and its common shares will no longer be traded on AMEX.

Background of the Merger

     In January 2005, upon the approval of the board of directors, AirNet engaged BGL to serve as AirNet’s exclusive financial advisor and investment banker to review, develop and evaluate various strategic alternatives to enhance shareholder value, including the possible sale of AirNet. AirNet’s board also established a Special Committee, consisting solely of independent directors, to oversee a marketing process, which resulted in a number of indications of interest with respect to the sale of AirNet and culminated in the execution of a letter of intent for the sale of AirNet on October 25, 2005, at a price of $4.55 per share. On December 16, 2005, AirNet announced that it had been unable to reach a definitive merger agreement with the private equity investment firm that entered into the letter of intent and that the exclusivity period under such letter of intent had been allowed to expire.

     Following the termination of the letter of intent, in December 2005, AirNet’s board dissolved the Special Committee and appointed a Strategy Committee to work with management on the ongoing business strategy and alternatives for the company to enhance shareholder value. The Strategy Committee, together with the full board, determined that AirNet’s business strategy would include operating its businesses with emphasis on cash flows from operations while seeking other de-leveraging opportunities. The board elected to continue its engagement of BGL as its financial advisor on a month-to-month basis at the rate of $50,000 per month plus expenses in connection with the development and evaluation of various strategies and opportunities to enhance shareholder value and de-leverage the business.

     In September 2006, AirNet sold its Jetride passenger charter business to Pinnacle Air, LLC, a private investor group based in northwest Arkansas, for approximately $41 million and thereafter concluded its month-to-month engagement with BGL. In connection with the sale of Jetride, BGL received a success fee of approximately $622,000. As a result of that transaction, AirNet significantly reduced its leverage and focused its strategy on its airline operations. On February 27, 2007, the board dissolved the Strategy Committee following the appointment of Bruce D. Parker as chairman of the board and his assumption of the position of chief executive officer of AirNet on December 28, 2006.

     Between December 2005 and August 2007, AirNet and BGL received periodic inquiries from various parties, including some who had participated in the 2005 marketing process, regarding AirNet’s interest in a potential sale transaction. AirNet entered into discussions with one potential strategic partner between November 2006 and April 2007. These discussions never reached the stage of a signed letter of intent and the discussions terminated in mid-April 2007.

     In August 2007, AirNet engaged MergeGlobal, Inc. (“MergeGlobal”) to review strategic options in connection with AirNet’s express business and to begin developing a strategy for the transition of AirNet’s business. In late September 2007, MergeGlobal and AirNet’s management presented their initial findings on this strategy to the board. On November 28, 2007, MergeGlobal’s engagement was amended to increase the scope of work to help AirNet transform its primary business from a scheduled network-based logistics provider to a dedicated charter and express feeder provider. In connection with this amendment, AirNet agreed to grant MergeGlobal warrants to purchase 100,000 common shares at an anticipated exercise price of $.10 per share. In connection with the merger agreement, MergeGlobal’s right to these warrants

was converted into the right to receive $271,000, representing 100,000 times $2.71 (the $2.81 per share merger consideration less the $.10 anticipated exercise price), upon the consummation of the merger. As a result of the development of this revised business strategy, AirNet is implementing growth plans to expand its express, dedicated and on-demand cargo charter services for customers in niche markets requiring high control, rapid delivery and non-conforming delivery times and for large integrated express packages carriers such as DHL and United Parcel Service.

     On or about November 7, 2007, Bayside Capital, whose affiliate, H.I.G. Capital, had received marketing materials in the 2005 marketing process, began a dialogue with BGL regarding a possible acquisition of AirNet. On or about December 5, 2007, an Ohio-based private equity firm contacted AirNet directly regarding a possible acquisition of AirNet. Both inquiries were unsolicited by AirNet. AirNet entered into preliminary discussions with both parties.

     On November 27, 2007, Mr. Parker, Ray L. Druseikis, AirNet’s interim chief financial officer, and representatives of BGL had a conference call with principals of Bayside Capital regarding AirNet’s level of interest in a potential transaction, the company’s strategy and its business direction.

     On December 6, 2007, Messrs. Parker and Druseikis and Ronald A. Robins, Jr., AirNet’s primary outside counsel from Vorys, Sater, Seymour and Pease LLP (“Vorys”), met with the Ohio firm at its offices. At such meeting, the principal of the Ohio firm discussed a price range of $1.90 to $2.05 per share and asked for exclusivity to perform due diligence through January 31, 2008. AirNet declined to grant exclusivity.

     On December 11, 2007, Mr. Parker and a representative of MergeGlobal met with a potential acquisition target to explore a potential acquisition by AirNet or a combination. No discussions progressed from the initial meeting. On December 12, 2007, the board met by telephone, and Mr. Parker updated the board on discussions with Bayside Capital and the Ohio firm, as well as the discussions with the potential acquisition target. On December 17, 2007, Messrs. Parker and Druseikis and a representative of BGL met with principals from Bayside Capital at their offices in Miami, Florida regarding AirNet’s level of interest in a potential transaction, the company’s strategy and its business direction. Throughout the remainder of December 2007, AirNet had periodic discussions with Bayside Capital and the Ohio firm, both of which had executed confidentiality agreements with AirNet, and responded to due diligence requests.

     On January 3, 2008, Messrs. Parker and Robins met with principals of the Ohio firm. At the meeting, the Ohio firm presented the AirNet team with a draft letter of intent containing a proposed offer price of $2.25 per share and no financing contingency. AirNet did not agree to the terms of the proposed letter of intent but continued in discussions with the Ohio firm through the middle of January. AirNet also continued in discussions with Bayside Capital throughout this period.

     On January 4, 2008, the AirNet board held a telephonic meeting. Mr. Parker apprised the board of the status of discussions with Bayside Capital and the Ohio firm, noting that he believed that both were credible parties, that Bayside Capital was much larger and easily had sufficient equity to fund the transaction but that the Ohio firm appeared to be much closer to being prepared to enter into a definitive merger agreement. The board granted Mr. Parker the authority in principle to grant limited exclusivity to the Ohio firm (carving out the right to continue in discussions with Bayside Capital) if the offer price was increased appreciably.

     In mid-January, another interested party, a group of private investors based in Ohio and Florida, made unsolicited contact with BGL to inquire about a possible acquisition of AirNet and followed the inquiry with a written indication of interest with the expectation of an offer in the range of $3.00 to $3.50 per share, conditioned in part upon being granted immediate, full exclusivity. Mr. Parker and representatives of MergeGlobal and BGL met with these investors in Miami, Florida on January 17, 2008. AirNet concluded that the investor group was credible and had access to sufficient capital to acquire the company, but the investor group was at a very early stage in its due diligence, particularly with respect to AirNet’s revised business strategy and the scope of the declining bank revenues, and would not proceed without full exclusivity from AirNet. Given the on-going discussions with Bayside Capital and the Ohio firm, AirNet was not willing to agree to the full exclusivity condition proposed by the investor group.

     On January 16, 2008, following several days of negotiations, AirNet entered into a preliminary letter of intent with the Ohio firm that granted limited exclusivity for up to 60 days (with the ability to continue discussions with up to three unspecified other interested parties and a fiduciary out). The preliminary letter of intent did not contain an offer price per share, but the parties had discussed an offer in the range of $2.50, which AirNet did not consider sufficient to grant full exclusivity. In the preliminary letter of intent, AirNet agreed to reimburse the Ohio firm for its reasonable out-of pocket expenses incurred after January 14, 2008 up to a capped amount in limited circumstances.

     On the same day as the preliminary letter of intent was executed by AirNet, the Ohio firm delivered a letter to Mr. Parker that attached a draft of a merger agreement containing a proposed price per share of $2.75 and no financing contingency. The letter also indicated that the Ohio firm would cease its pursuit of a transaction with AirNet if the parties were unable to enter into a binding merger agreement by the close of business on January 21, 2008.

     On January 17, 2008, Messrs. Parker, Druseikis and Jeffery B. Harris, AirNet’s chief operating officer, along with representatives of MergeGlobal and BGL, met with a principal and other representatives of Bayside Capital in Miami to continue Bayside Capital’s initial due diligence review of AirNet, as permitted by the preliminary letter of intent with the Ohio firm.

     On January 18, 2008, AirNet’s board held a telephonic meeting. Mr. Parker updated the board on the discussions with Bayside Capital and with the investor group, but the primary purpose of the meeting was to address the January 16, 2008 letter from the Ohio firm. The board determined to respond to the January 16, 2008 letter with a revised draft of the merger agreement with a price per share of $3.25 that was in a form that the board would be prepared to approve and have AirNet execute within the Ohio firm’s stated deadline. Vorys revised the merger agreement and delivered it to the Ohio firm’s counsel on January 18, 2008. Mr. Robins also

spoke with the Ohio firm’s counsel to explain the revised terms, to seek to understand the structure and capitalization of the acquisition vehicle, to express the board’s willingness to enter into a transaction within the Ohio firm’s deadline at $3.25 per share and to note that both AirNet’s management and its outside counsel and financial advisors were prepared to go to extraordinary measures to be able to comply with the Ohio firm’s deadline.

     Over the weekend of January 19 and January 20, 2008, Mr. Parker had multiple discussions with the principal of the Ohio firm, and Mr. Robins had several discussions with opposing counsel. By Sunday, January 20, 2008, the principal of the Ohio firm acknowledged that the firm was not prepared to sign a definitive merger agreement by January 21, 2008 and noted that its bank was at least 10 days to two weeks from completion of its due diligence.

     Between January 21, 2008, and February 8, 2008, AirNet continued to have periodic discussions both with Bayside Capital and the Ohio firm, as each entity worked to complete its due diligence review. On January 22, 2008, the group of investors indicated by letter to BGL that they remained interested in pursuing a deal only with full exclusivity; accordingly, they determined to wait until AirNet had completed its discussions with the other parties.

     On January 23, 2008, Bayside Capital delivered a signed letter of intent proposing to acquire AirNet for $2.40 per share. Execution of the letter of intent by AirNet was conditioned upon granting Bayside Capital full exclusivity. AirNet did not respond to the letter of intent with a counteroffer.

     On January 24, 2008, AirNet entered into a supplemental agreement with MergeGlobal, which the parties had been negotiating since approximately January 10, 2008, engaging MergeGlobal to act as financial advisor to AirNet in connection with a transaction with the Ohio firm. On January 30, 2008, AirNet entered into a joint engagement letter with MergeGlobal and BGL, which letter the parties had been negotiating since approximately January 10, 2008, engaging MergeGlobal and BGL to act as joint advisors in connection with a transaction with Bayside Capital or the group of investors (or a topping bidder other than the Ohio firm) and contemplating that AirNet would engage BGL to provide a fairness opinion if so requested by AirNet’s board, which was not required to use BGL. Both the supplemental agreement with MergeGlobal and the joint engagement letter with MergeGlobal and BGL provided for a success fee of $750,000, plus 3% of aggregate consideration in excess of $25 million but less than or equal to $30 million, plus 5% of aggregate consideration in excess of $30 million. The joint engagement letter provided that BGL and MergeGlobal would split any success fee on a 50%/50% basis, except that, if BGL received a fairness opinion fee in connection with a transaction, MergeGlobal would receive an equivalent amount of the success fee up front and MergeGlobal and BGL would split the remainder of the success fee on a 50%/50% basis. On February 1, 2008, AirNet entered into an engagement letter with BGL to provide a fairness opinion if so requested by AirNet’s board. The BGL engagement letter provided an up-front retainer payment of $25,000, which would be offset against the total fairness opinion fee of $325,000 in the event that BGL was requested to deliver a fairness opinion, whether written or oral, and the parties thereafter entered into a definitive agreement.

     Between January 23, 2008 and January 30, 2008, Mr. Parker and representatives of MergeGlobal and BGL continued to have conversations with Bayside Capital to indicate a higher

value per share for AirNet than Bayside Capital had previously expressed a willingness to entertain. On January 30, 2008, a principal of Bayside Capital indicated to a representative of BGL in a conversation that Bayside Capital would be willing to enter into a letter of intent to acquire AirNet for $2.80 per share conditioned upon full exclusivity and noted that Bayside Capital would expect a prompt response. Between January 30, 2008, and February 8, 2008, AirNet continued to have periodic discussions with Bayside Capital and the Ohio firm regarding due diligence inquiries.

     On February 8, 2008, a principal of Bayside Capital called Mr. Parker and indicated that Bayside Capital was prepared to increase its offer to $2.95 per share conditioned upon full exclusivity for a 30 day due diligence period. The principal of Bayside Capital noted that Bayside Capital expected a response by later in the day.

     Subsequent to the call with Bayside Capital, Messrs. Parker and Robins and a representative of MergeGlobal met with the Ohio firm at its offices for a previously scheduled meeting to negotiate the Ohio firm’s $2.75 per share offer and AirNet’s $3.25 per share counteroffer. During the negotiations, the AirNet team told the principal and his partners that one of the other interested parties had indicated that it was prepared to offer a price significantly higher than the Ohio firm’s $2.75 per share offer and that AirNet needed to respond to that party by later in the day. The Ohio firm stated that its $2.75 per share offer was not subject to further negotiation and indicated that it was within days of being ready to execute a definitive agreement with AirNet.

     Mr. Parker called a principal of Bayside Capital later in the day on February 8, 2008 to say that he had scheduled a board meeting for the following day to consider Bayside Capital’s offer and that he would give Bayside Capital AirNet’s response to the $2.95 per share offer following that meeting.

     On February 9, 2008, the AirNet board met to address the offers from the Ohio firm and Bayside Capital. In connection with such consideration, the AirNet team provided the board with their perspective on not only the price terms but the status of each party’s due diligence, expected time to signing a definitive agreement, the financial wherewithal of the parties, likelihood of success and similar matters. Following a discussion, the board determined that the price differential between Bayside Capital’s $2.95 per share and the Ohio firm’s $2.75 per share was too significant to offset the belief that the Ohio firm was closer to being able to execute a definitive agreement, and, accordingly, the board authorized AirNet to commence negotiations toward a letter of intent with Bayside Capital providing for $2.95 per share, full exclusivity for 30 days and an expense reimbursement provision with an appropriate cap.

     Following the board meeting, Mr. Parker called a principal of Bayside Capital to inform him of the board’s determination. Between February 9, 2008 and February 13, 2008, AirNet and Bayside Capital, together with their outside counsel, Vorys and McDermott Will & Emery LLP (“McDermott”), negotiated the terms of the letter of intent in anticipation of an AirNet board meeting scheduled for February 13, 2008.

     On February 12, 2008, the principal of the Ohio firm contacted Mr. Parker and indicated that the Ohio firm might be willing to increase its offer. Mr. Parker scheduled a conference call

with the Ohio firm, himself, Messrs. Robins and Druseikis and MergeGlobal for the morning of February 13, 2008.

     As a result of the February 13, 2008 conference call, the Ohio firm increased its offer to $2.91 per share. The principal of the Ohio firm also represented to Mr. Parker and the AirNet team that the Ohio firm would be prepared to execute a definitive agreement, without a financing contingency, within days, and in any event in no more than a week.

     Shortly after the conference call with the Ohio firm, AirNet’s board held a telephonic meeting. At the board meeting, Messrs. Robins and Parker set forth a side-by-side comparison of the two proposed transactions, comparing price, anticipated deal terms, financing matters, time to execution, deal risk and the like. Based in significant part on the representation of the Ohio firm that it had completed its relevant due diligence and was within days of being able to execute a definitive agreement and the sense that Bayside Capital’s due diligence lagged behind by several weeks, the board, following significant discussion, determined to pursue the Ohio firm’s $2.91 per share offer that appeared closer at hand in lieu of Bayside Capital’s $2.95 per share offer that appeared more distant and authorized AirNet to negotiate with the Ohio firm to grant it heightened exclusivity and to increase its reimbursement cap.

     Following the board meeting on February 13, 2008, BGL contacted Bayside Capital to inform them of the board’s decision, and AirNet contacted the Ohio firm. Vorys also contacted the Ohio firm’s outside counsel, and they proceeded to negotiate an amendment to the original preliminary letter of intent that granted the Ohio firm full exclusivity through Friday, February 22, 2008, which became the new end date for the due diligence period, and increased the amount of the expense reimbursement cap from $250,000 to $450,000. The parties executed this amendment on February 14, 2008.

     Between February 14, 2008 and February 20, 2008, AirNet and the Ohio firm proceeded toward execution of a definitive merger agreement. AirNet scheduled a board meeting for February 20, 2008 to approve the merger agreement with the Ohio firm.

     On the morning of February 20, 2008, the principal of the Ohio firm, along with its counsel, contacted Mr. Robins and stated that the Ohio firm did not believe that AirNet was worth more than $2.81 per share to them, based in part upon the results of an aircraft appraisal performed by the firm’s bank.

     At the meeting of the AirNet board of directors at Vorys’ offices on February 20, 2008, Messrs. Robins and Parker updated the board on the discussions with the Ohio firm. The board discussed the appropriate response to the Ohio firm. BGL and MergeGlobal assessed the potential of reengaging in discussions with Bayside Capital. Following discussion, the board determined that it was appropriate to give the Ohio firm through the exclusivity period of February 22, 2008 to reconfirm its $2.91 per share offer and to execute a definitive merger agreement at such price. The board indicated that, if the Ohio firm needed a couple of extra days to execute a definitive merger agreement at the agreed upon price of $2.91 per share, then it would be willing to consider an extension of the exclusivity period. If, however, the Ohio firm was unwilling to reconfirm the agreed upon terms, then the board authorized Mr. Parker to contact Bayside Capital as soon as practicable after the expiration of the exclusivity period and

seek to reengage in discussions at the $2.95 per share price or at a slightly reduced price to reflect the fact that Bayside Capital had been spurned in favor of the Ohio firm.

     At the board’s direction, Mr. Robins contacted the principal of the Ohio firm following the board meeting to inform him that AirNet stood ready, willing and able to execute a definitive merger agreement with the Ohio firm at the $2.91 price and that the board would allow the firm the full exclusivity period to execute a definitive merger agreement at such price (and, if necessary, would consider a brief extension). Mr. Robins also informed the principal that if the Ohio firm was not willing to execute a definitive merger agreement at the $2.91 per share price, then the AirNet board would be willing to continue in discussions with the Ohio firm, unless and until AirNet granted exclusivity to another party, but that any such discussions would not be subject to exclusivity or any expense reimbursement obligation.

     The Ohio firm did not reconfirm its $2.91 per share offer or enter into a definitive merger agreement by midnight on February 22, 2008. The Ohio firm never agreed to increase its offer above the $2.81 per share. Accordingly, on the morning of February 23, 2008, Mr. Parker contacted a principal of Bayside Capital and arranged to have breakfast with him in Miami, Florida, on February 24, 2008. At such breakfast, the principal of Bayside Capital indicated that Bayside Capital might be willing to reengage in discussions at a lower price than Bayside Capital’s previous $2.95 per share offer.

     On February 25, 2008, a principal of Bayside Capital notified Mr. Parker that Bayside Capital would reengage in discussions but only at an offer price of $2.60 per share. Between February 25 and February 27, 2008, principals of Bayside Capital and BGL had a couple of discussions, in which the BGL principal indicated that he did not believe AirNet would accept a deal at $2.60 per share but that the board might be persuaded to do a deal in the $2.80s range.

     On February 27, 2008, Mr. Robins returned a phone call from the principal of the Ohio firm. The principal expressed his continued interest in pursuing a transaction and requested certain due diligence information, which was provided to him.

     At a regularly scheduled board meeting in Miami on February 28 and February 29, 2008, Mr. Parker apprised the board of the discussions with Bayside Capital, and Mr. Robins recounted the conversation with the principal of the Ohio firm. In addition, Mr. Parker noted that he had received an unsolicited inquiry that morning from a deal broker, who wanted to discuss a possible roll-up transaction involving two other aviation-related businesses. Mr. Parker noted that the discussions were at a very preliminary stage and that, given the status of negotiations with the existing interested parties, he believed it would be prudent to resolve such negotiations prior to pursuing any further discussions with the deal broker. Following discussion, and based on the collective perception of MergeGlobal, BGL and Mr. Parker that Bayside Capital was unlikely to increase its offer of $2.60 per share much above $2.80, if it agreed to an increase at all, the board authorized Mr. Parker to pursue an offer from Bayside Capital at $2.83 per share. Mr. Parker subsequently revised the previous letter of intent from Bayside Capital to reflect the $2.83 per share price and faxed an executed copy to Bayside Capital.

     On March 3, 2008, a principal of Bayside Capital informed Mr. Parker that Bayside Capital was increasing its offer to $2.80 per share from its previous $2.60 per share offer,

conditioned upon full exclusivity for 30 days and a flat $400,000 break-up fee in the event that AirNet breached the exclusivity provisions or entered into a letter of intent, memorandum of understanding, definitive agreement or similar arrangement during the 30-day exclusivity period. A principal of Bayside Capital delivered a signed letter of intent to such effect to Mr. Parker. Over the course of that day and the following day, a principal of Bayside Capital and Mr. Parker had additional conversations, and Mr. Parker requested that Bayside Capital increase its offer to get closer to the $2.83 per share contemplated by the AirNet board.

     On March 5, 2008, in anticipation of a scheduled meeting of the AirNet board, a principal of Bayside Capital informed Mr. Parker that Bayside Capital was willing to increase its offer to $2.81 per share.

     At its meeting on March 5, 2008, the AirNet board considered Bayside Capital’s offer and, following discussion, authorized Mr. Parker to execute a letter of intent at $2.81 per share.

     Between March 6, 2008 and March 29, 2008, Bayside Capital conducted business, financial, accounting and tax due diligence, meeting periodically with representatives of AirNet. Vorys provided McDermott an initial draft of a merger agreement on March 7, 2008, and the parties engaged in discussions and exchanged several drafts of the merger agreement prior to its execution.

     On March 25, 2008, Bayside Capital raised a concern with AirNet regarding the fact that there were no significant insiders whose common shares could be locked up in connection with the execution of the merger agreement. Over the course of the next several days, Bayside Capital, AirNet, Vorys and McDermott discussed potential means to address this issue and ultimately agreed, subject to approval of AirNet’s board, that Bayside Capital, through AirNet Holdings, could acquire 19% of the then outstanding common shares of AirNet at a purchase price equal to the deal price without triggering a separate vote requirement pursuant to Ohio’s control share acquisition statute in Section 1701.831 of the Ohio Revised Code or AMEX’s listed company rules. The parties agreed that the only rights that AirNet Holdings would acquire in connection with such purchase would be registration rights in the form of one demand registration and unlimited piggyback registrations.

     On March 29, 2008, AirNet’s board met to consider the merger agreement and the transactions contemplated by the merger agreement, including the acquisition by AirNet Holdings of 19.0% of the outstanding common shares of AirNet (or 16.0% on a post-acquisition basis) at the deal price of $2.81 per share for an aggregate purchase price of approximately $5.4 million. At the meeting, Vorys provided the board with written materials which detailed the board’s fiduciary duties under Ohio law, provided a chronology of events and detailed the terms of the proposed merger agreement. Vorys reviewed these materials with the board. BGL then provided the board with an oral fairness opinion and related analysis to the effect that the $2.81 price per share was fair to AirNet’s shareholders, from a financial point of view. The board discussed the proposed merger agreement and addressed the proposed sale of 1,934,137 common shares to AirNet Holdings in connection with the execution of the merger agreement. Following discussion, the board unanimously approved the sale of 1,934,137 common shares to AirNet Holdings at a purchase price of $2.81 per share pursuant to a subscription agreement in connection with the execution of the merger agreement and determined that such sale was in the

best interests of AirNet’s shareholders. Following additional discussion, the board unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable, fair to and in the best interests of AirNet and its shareholders and approved the merger agreement, in substantially the form presented to the board, and approved the transactions contemplated thereby, including the merger.

     Following the board meeting and throughout the day on March 29 and March 30, 2008, AirNet and Bayside Capital, together with their respective advisors and counsel, continued to review and finalize the merger agreement and related documents, including AirNet’s disclosure schedule. On March 30, 2008, the parties completed and executed the merger agreement, with the signatures deemed to be held in escrow until the wire transfer of the approximately $5.4 million purchase price for the acquisition by AirNet Holdings of the 1,934,137 common shares cleared the wire on Monday morning, after which the signatures were deemed released and AirNet issued a press release announcing the transaction and filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

AirNet’s Reasons for the Merger; Recommendation of the Board of Directors

     In determining that the merger and merger agreement are advisable, fair to and in the best interests of AirNet and its shareholders, the board of directors consulted with AirNet’s management, with MergeGlobal and BGL, AirNet’s financial advisors, and with Vorys, AirNet’s legal counsel. The following describes the material reasons, factors and information taken into account by the board of directors in deciding to authorize and approve the merger agreement and the transactions contemplated thereby and to recommend that AirNet’s shareholders vote in favor of the adoption of the merger agreement and the approval of the merger:

	•		Merger Consideration Premium . The board of directors considered the fact that the $2.81 per share cash consideration to be paid in the merger represented a premium of approximately 94% over the closing price of AirNet’s common shares on March 28, 2008, the last trading day before the board of directors authorized and approved the merger agreement, and considered the approximately 80% and 67% premiums compared to the one week and one month average trading price of the common shares before the date of execution of the merger agreement, respectively.
	•		Concurrent Purchase of Common Shares by AirNet Holdings. The board of directors considered the fact that, concurrently with the execution and delivery of the merger agreement, AirNet Holdings had agreed to purchase 1,934,137 of AirNet’s common shares at the same $2.81 price per share as the merger consideration and that the approximately $5.4 million total consideration from the sale of those common shares would be available to AirNet as working capital without any right of AirNet Holdings to put the common shares back to AirNet.
	•		Terms of Merger Agreement . The board of directors considered the financial and other terms and conditions of the merger agreement, by themselves and in comparison to the terms of agreements in other similar transactions, including:

	•		the structure of the merger as an all-cash transaction, which will provide AirNet’s shareholders with liquidity and certainty of value for their common shares;
	•		the right of the board of directors to respond to an unsolicited acquisition proposal if the board determines that the proposal constitutes or could reasonably be a potential superior proposal and it would be a prudent exercise of the board’s fiduciary duties to respond;
	•		the ability of the board of directors to change the board’s recommendation with respect to the merger should AirNet receive an unsolicited acquisition proposal that the board of directors determines to be a superior proposal and it would be a prudent exercise of the board’s fiduciary duties to do so;
	•		the understanding of the board of directors, after consultation with AirNet’s financial advisors and legal counsel, that AirNet’s obligation to pay a $1.4 million termination fee plus expense reimbursement to AirNet Acquisition (and the circumstances when such fee would be payable) is reasonable and customary in light of the benefits of the merger, commercial practice and transactions of this size and nature;
	•		the lack of any financing contingencies to the obligation of AirNet Holdings and AirNet Acquisition to complete the merger; and
	•		the likelihood of satisfying the conditions to the obligations of AirNet Holdings and AirNet Acquisition to complete the merger and that the merger will be completed.

	•		Historical Market Prices of AirNet’s Common Shares. The board of directors reviewed the historical market prices of AirNet’s common shares.
	•		Review of Business and Earnings Prospects. The board of directors reviewed AirNet’s business and earnings prospects and short-term and long-term business risks, including the anticipated continued decline in AirNet’s revenues from its bank customers and the risks associated with transforming AirNet’s business strategy to a dedicated charter business, with AirNet’s financial advisors.
	•		Financial Analyses and Opinion of BGL. The board of directors considered the opinion of BGL that, as of March 29, 2008, and based upon and subject to certain assumptions, factors and limitations that BGL discussed with the board, the merger consideration of $2.81 per share was fair from a financial point of view to the holders of AirNet’s common shares and the related analyses prepared by BGL. See the discussion under the caption “The Merger – Opinion of Financial Advisor.”
	•		Shareholder Approval Requirement. The board of directors considered the requirement that the holders of at least a majority of AirNet’s outstanding common shares would be required to adopt the merger agreement and approve the merger and

			that, following its purchase of 1,934,137 common shares, AirNet Holdings would own approximately 16.0% of the outstanding common shares of AirNet.
	•		Rights of Dissenting Shareholders. The board of directors considered the ability of AirNet’s shareholders who do not support the merger to obtain the “fair cash value” of their common shares if they properly exercise their dissenters’ rights under Ohio law. See the discussion under the caption “The Merger – Rights of Dissenting Shareholders.”
	•		Social and Economic Effects of the Merger. The board of directors considered the social and economic effects of the merger on AirNet’s employees, customers and suppliers, and on the communities where AirNet operates, including the intention of AirNet Holdings to maintain operations in Columbus, Ohio following the merger.

     The board of directors also considered a variety of risks and other potentially negative factors relating to the merger in its deliberations, including:

	•		Regulatory Approvals . The possibility of non-consummation of the merger if the regulatory approvals necessary for the consummation of the merger are not obtained.
	•		Failure to Close . The risks and costs to AirNet if the merger does not close for any reason, including the diversion of management and employee attention, employee and pilot attrition and the effect on customer and supplier relationships.
	•		Taxation . The fact that gains, if any, realized from an all-cash transaction would generally be taxable to AirNet’s shareholders for U.S. federal income tax purposes.
	•		Disruptions . The potential impact of the announcement and pendency of the merger, including the potential impact of the merger on AirNet’s employees, customers and suppliers and the potential risk of diverting management focus and resources from operational matters, including the implementation of AirNet’s revised business strategy, while working to negotiate and close the merger with AirNet Holdings and AirNet Acquisition, which could potentially impair AirNet’s future prospects as an independent company if the merger were not consummated.
	•		Operating Restrictions . The fact that, pursuant to the merger agreement, AirNet must generally conduct its business in the ordinary course, and AirNet is subject to a variety of other restrictions on the conduct of its business prior to closing of the merger or termination of the merger agreement without the consent of AirNet Holdings, which may delay or prevent AirNet from pursuing its business strategy or preclude actions that would be advisable if AirNet were to remain an independent company.
	•		No Solicitation; Termination Fee . The fact that, under the terms of the merger agreement, AirNet cannot solicit other acquisition proposals and must pay to AirNet Acquisition a termination fee of $1.4 million and the out-of-pocket costs and expenses of AirNet Holdings and AirNet Acquisition if the merger agreement is terminated based on another acquisition proposal, which, in addition to being costly, might have

			the effect of discouraging other parties from proposing an alternative transaction that might be more advantageous to AirNet’s shareholders than the merger. See the discussion under the caption “Proposal 1 — The Merger Agreement — Termination Fee.”
	•		Officers and Directors . The fact that the interests of AirNet’s executive officers and directors in the merger may be different from, or in addition to, the interests of AirNet’s shareholders generally. See the discussion under the caption “The Merger - Interests of Certain Persons in the Merger.”
	•		Large Shareholder with Registration Rights. The fact that, if the merger does not close for any reason, AirNet Holdings will continue to hold approximately 16.0% of AirNet’s outstanding common shares and will have one demand registration right and unlimited piggyback registration rights in respect of those common shares.

          The foregoing discussion describes the material factors considered by the AirNet board of directors in its deliberations regarding the merger. After considering these factors, the board of directors concluded that the positive factors relating to the merger and the merger agreement outweighed the negative factors. In view of the wide variety of factors considered by AirNet’s directors, they did not find it practicable to, and did not make specific assessments of, quantify or otherwise assign relative weights to the specific factors considered in reaching the board’s determination. The determination to authorize and approve the merger agreement and the transactions contemplated thereby was made after consideration of all of the factors as a whole. In addition, individual members of the board of directors may have given different weights to different factors.

Opinion of Financial Advisor

Overview

          On February 1, 2008, AirNet’s board of directors retained BGL to render its opinion as to the fairness from a financial perspective of consideration to be received in a transaction involving the sale of AirNet through a merger or the sale of all or substantially all of AirNet’s common shares or assets. The merger agreement contemplates a merger involving certain newly formed affiliates of Bayside Capital. At a meeting of the board of directors on March 29, 2008, BGL rendered its oral opinion, later confirmed in writing, to the effect that as of such date and based upon the assumptions made, matters considered and limitations and qualifications set forth in such opinion, the merger consideration of $2.81 was fair, from a financial point of view, to AirNet’s shareholders. No limitations were imposed by AirNet upon BGL with respect to the investigations made or procedures followed by BGL in rendering its opinion.

           The full text of the BGL opinion is attached to this proxy statement as Appendix B. The description of the BGL opinion set forth herein is qualified in its entirety by reference to the full text of the BGL opinion. We urge our shareholders to read the BGL opinion in its entirety.

          As addressed by BGL’s fairness opinion, the acquisition of AirNet will be accomplished by the merger of AirNet Acquisition, a newly-formed Ohio corporation and a wholly-owned subsidiary of AirNet Holdings, a newly-formed Delaware corporation, with and into AirNet, with the separate corporate existence of AirNet Acquisition ceasing and AirNet being the surviving corporation. In connection with the merger, each common share, par value $0.01 per share, of AirNet issued and outstanding immediately prior to the effective time of the merger, except for (i) common shares held by AirNet or AirNet Holdings or any of their respective subsidiaries and (ii) any common shares as to which dissenters’ rights are perfected, will be converted into and represent the right to receive $2.81 in cash, without interest, subject to adjustment as provided in the merger agreement.

          In arriving at its opinion, BGL reviewed and analyzed, among other things:

	•		AirNet’s financial and operating information including current and historical information and financial analyses and forecasts prepared by or for AirNet;
	•		AirNet’s historical audited financial statements and accompanying footnotes for the fiscal years ended December 31, 2004 to 2006;
	•		AirNet’s unaudited financial statements prepared by management for the fiscal year ended December 31, 2007;
	•		AirNet’s budget for the fiscal year ended December 31, 2008;
	•		AirNet’s financial projections for the fiscal years ended December 31, 2009 to 2012;
	•		SEC filings deemed relevant by BGL for the past 48 months, including the then most recent draft of AirNet’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007;
	•		AirNet’s third-party transportation industry consultant reports with respect to the quantitative and qualitative factors and on the status of its businesses and markets and proposed business strategy and transition;
	•		third-party asset appraisal reports for AirNet’s aircraft and Columbus, Ohio headquarters facility;
	•		interviews with AirNet’s tax advisors and documentation with respect to its requested and approved request for change in accounting method;
	•		a liquidation analysis prepared by AirNet’s management;
	•		third-party industry data on the physical bank check transportation market and electronic alternatives thereto;
	•		results of the 2005-2006 BGL-led strategic alternatives analysis and company marketing process;

	•		chronology of the material events and negotiations culminating in AirNet’s execution of the merger agreement;
	•		the form and terms of the merger agreement; and
	•		such other authoritative and qualitative reviews, analyses and inquires as BGL deemed appropriate.

          In addition, BGL has held discussions with members of AirNet’s management with respect to its business and prospects, including AirNet’s history, current operations, financial condition, competitive positions and growth opportunities, historical and projected financial performance, the decline in its bank business, the planned wind down and transition of its shared air transportation network, the current and expected growth of its dedicated air transportation and other transportation businesses, and its business strategy and business transition plan.

          In its review and analysis and in rendering its opinion, BGL assumed that AirNet’s management was not aware of any information material to BGL’s opinion that was not made available to BGL. Furthermore, BGL assumed and relied upon the accuracy and completeness of the financial statements and other information provided to BGL by AirNet, without independent verification thereof by BGL. BGL relied upon the assurances of AirNet’s management that all such information was prepared on a reasonable basis and that AirNet’s management was not aware of any information or facts that would make the information provided to BGL incomplete or misleading. BGL also assumed that the financial projections prepared by AirNet’s management were reasonably prepared on bases reflecting management’s best then currently available estimates and judgments of AirNet’s future financial performance. BGL did not express any view as to the reasonableness of the forecasts and projections or the assumptions on which they are based.

          In its review, BGL reviewed third-party asset appraisal reports for AirNet’s aircraft and Columbus, Ohio headquarters facility, but did not make any independent evaluation or appraisal of any of AirNet’s assets or liabilities, nor did BGL conduct a comprehensive physical inspection of any of AirNet’s assets, nor did BGL assume any responsibility to obtain any additional evaluations, appraisals or inspections. The BGL opinion is based on information made available by AirNet as of the date of BGL’s opinion, and BGL’s knowledge of economic, market and other conditions as they existed and could be evaluated, on the date of the opinion; however, such conditions are subject to rapid and unpredictable change and such changes could affect the conclusions expressed in the opinion. BGL made no independent investigation of any legal or accounting matters affecting AirNet, and BGL assumed the correctness of all legal and accounting advice given to AirNet and AirNet’s board of directors.

          In rendering the opinion, BGL also assumed, with the consent of AirNet’s board of directors, that: (i) in the course of obtaining any necessary regulatory or third party approvals and consents for the merger, no modification, delay, limitation, restriction or condition will be imposed that will have an adverse effect on AirNet or the merger; (ii) the merger will be consummated in accordance with the terms described in the merger agreement without any further revisions and without waiver by any party of any of the material conditions of the obligations thereunder; (iii) where BGL had reviewed drafts of agreements, that the final version

of such agreements did not differ in any material respect from the drafts presented to BGL; and (iv) the representations and warranties contained in the merger agreement are true and correct.

          BGL’s opinion is based upon information available to BGL as of the date of BGL’s opinion and BGL’s knowledge of economic, market and other conditions as they exist and can be evaluated on the date of BGL’s letter. BGL was not requested to address and BGL’s opinion does not address the relative merits of the merger as compared to other business strategies that might be available to AirNet, nor does BGL’s opinion address AirNet’s underlying business decision to agree to the merger. The BGL opinion addresses only the fairness of the merger consideration, from a financial point of view, to AirNet’s shareholders, and in rendering such opinion, BGL did not recommend that AirNet, AirNet’s board of directors, any shareholder or any other person take any specific action, including, without limitation, how any shareholder should vote with respect to the adoption of the merger agreement or approval of the merger. The opinion does not constitute a recommendation of such transactions over any alternative transactions which may be available to AirNet or AirNet’s shareholders and does not address AirNet’s underlying business decision to agree to the merger. No opinion was expressed by BGL as to whether any alternative transaction might be more favorable to AirNet’s shareholders than the merger.

          The BGL opinion was provided solely for the benefit and use of AirNet’s board of directors solely in the board’s consideration of the proposed merger and may not be used or relied upon for any other purpose except that BGL has provided that the opinion may be reproduced in full and summarized in this proxy statement and any other proxy materials used to solicit the necessary shareholder adoption of the merger agreement and approval of the merger, but may not otherwise be used, reproduced, disseminated, quoted or referred to in any manner or for any purpose without BGL’s prior written approval. The BGL opinion was one of many factors considered by AirNet’s board of directors in deciding to approve the transaction. See the discussion under the caption “The Merger — AirNet’s Reasons for the Merger; Recommendation of the Board of Directors.”

Valuation Analyses

          At the meeting of the AirNet board of directors held on March 29, 2008, BGL presented certain financial analyses in connection with the delivery of BGL’s opinion. In accordance with customary investment banking practice, BGL employed generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses that BGL used in providing its opinion and does not purport to be a complete description of the analyses underlying BGL’s opinion or the presentations made by BGL to the AirNet board of directors. Some of the summaries are presented in tabular format. In order to understand the financial analyses used by BGL more fully, you should read the tables together with the text of each summary. The tables alone do not constitute a complete description of BGL’s financial analyses, including methodologies and assumptions underlying the analyses, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed by BGL. Furthermore, except to the extent otherwise indicated, BGL did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, BGL’s analyses and factors must be considered as a whole. Considering any portion of such analyses or the factors

considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the opinion. BGL’s opinion is given as of the date of BGL’s letter and BGL expressly disclaims any undertaking or obligation to advise any person of any information that comes to BGL’s attention after the date of BGL’s letter that may impact BGL’s opinion or to update, revise or reaffirm BGL’s opinion. BGL has not made any independent valuation or appraisal of AirNet’s assets or liabilities (contingent or otherwise). Similarly, BGL expressed no opinion as to AirNet’s solvency, either prior to or subsequent to the merger.

          In conducting its fairness analysis, BGL utilized several complementary valuation methodologies:

	o		Stock price premium paid analysis - BGL reviewed premiums paid for controlling interests in public companies over the last 12 months. BGL reviewed U.S. public transactions similar to AirNet in size and benchmarked those premiums against the current offer price.
	o		Comparable public companies analysis - BGL evaluated the per share price of the merger in part by referencing the trading multiples of publicly-traded companies that BGL believed to offer similar services, to have similar operating and financial characteristics and/or to service similar markets.
	o		Comparable precedent transactions analysis - BGL evaluated the per share price of the merger in part by comparing it to recent merger and acquisition transactions that BGL believed to involve similar businesses.
	o		Liquidation valuation analysis - BGL reviewed a liquidation valuation provided by AirNet’s management that estimated AirNet’s value if AirNet were to liquidate all of its assets. The assessment incorporated the appraised value of AirNet’s office/hanger facilities and fleet, in addition to its current assets and inventory holdings.
	o		Discounted cash flow analysis - BGL evaluated the per share price of the merger in part by calculating AirNet’s future cash flows and discounting them back to the present at a weighted average cost of capital derived from a peer group and indicative of AirNet’s market position. This calculation is typically performed on projected future unlevered free cash flows (i.e., cash flows free of debt payments discounted to present value) utilizing a risk-adjusted levered cost of capital.
	o		Leveraged buyout analysis - BGL evaluated the per share price of the merger using the same underlying projections as in the discounted cash flow analysis and evaluated the valuation from the perspective of a financial investor and the return reasonably expected. The amount a financial buyer is willing to pay for a company is dependent on the company’s projected performance and is constrained by the implied capital structure that the buyer can impose.

          Due to the uniqueness of AirNet, its business and business model, and the contraction of AirNet’s primary bank check transportation market, BGL indicated that the comparable public companies, comparable precedent transactions, discounted cash flow valuation, liquidation valuation, and leveraged buyout valuation analyses may not be indicative of AirNet’s value. In

reaching its conclusion, BGL considered various qualitative factors, including (i) AirNet’s declining revenue as the market for physically transporting paper checks contracts, (ii) the high level of uncertainty of AirNet’s projected cash flows as a result of the unknown rate of decline of its bank business and its ability to reduce fixed costs in proportion to the decline, (iii) the investments required to support AirNet’s business transition, (iv) the results of the marketing and business unit sale processes and AirNet’s subsequent sale discussions and negotiations that spanned from April 2005 to the present, and (v) the corporate finance and strategic alternatives available to AirNet outside of the merger.

      Stock price premium paid analysis.

     BGL calculated the premium implied by the proposed merger by comparing the closing share price on March 28, 2008, the last trading day prior to the date of BGL’s opinion, to the closing share price one day, one week and one month prior to March 28, 2008, which was 93.79%, 80.13%, and 67.26%, respectively. BGL analyzed 16 domestic public transactions with transaction values between $25 million and $50 million that were announced in the last 12 months, and 56 domestic public transactions with transaction values between $25 million and $150 million that were announced in the last 12 months. BGL compared the share price of each transaction to the closing price of the target stock one day, one week, and one month prior to the announcement of the transaction.

     BGL then compared the premiums calculated from the two universes of public transactions to the premiums implied by the proposed merger compared to the closing price of $1.45 per share on March 28, 2008. Of the transactions analyzed, and based on the merger consideration of $2.81 per share, the premium paid is within the 80 ^th to 90 ^th percentiles for transactions with values between $25 million and $50 million, and the 70 ^th to 90 ^th percentiles for transactions with values between $25 million to $150 million.

U.S. Public Transactions from $25 million to $50 million in Transaction Value

U.S. Public Transactions from $25 million to $150 million in Transaction Value

      Comparable public companies analysis.

     The comparable public company methodology involves comparing AirNet’s financial metrics to those of other public companies with similar operations or markets whose shares actively trade on a public market. Five companies that are involved in air cargo services were selected for the comparable group. The following observations were made concerning comparisons of AirNet to the comparable companies:

	•		Size : As measured by revenues and total assets, AirNet is at the low end of the range of comparable companies. Typically, smaller companies trade at discounts compared to larger companies, all else being equal.
	•		Growth : Historically, AirNet has experienced a lower rate of revenue growth as compared to the comparable companies. In addition, AirNet’s revenues and earnings before interest and taxes (EBIT) declined in 2007 and are projected to decline in fiscal year 2008 and beyond. Typically, companies with declining revenues and cash flow receive lower valuation multiples.
	•		Profitability : AirNet’s EBIT and earnings before interest, taxes, depreciation and amortization (EBITDA) margins are lower than the average margins of the comparable companies. Typically, lower margin companies receive lower valuations.
	•		Leverage : At the time of the evaluation, AirNet did not have any long-term, interest-bearing bank debt in its capital structure.
	•		Market Growth : AirNet’s primary bank check market is contracting. Typically, companies in contracting markets receive lower valuations.

     Using publicly available information, BGL compared selected financial and market data of AirNet with similar information for the following companies:

	•		ABX Holdings, Inc.
	•		Air T, Inc.
	•		Alpine Air Express, Inc.
	•		Atlas Air Worldwide Holdings, Inc.
	•		FedEx Corporation

     BGL calculated and compared various financial ratios and multiples based on publicly available financial data it obtained from AirNet’s filings with the SEC and information it obtained from databases that provide financial data from AirNet’s filings with the SEC. The multiples and ratios attributed to AirNet were calculated using the closing price of AirNet’s common shares on March 28, 2008, the last trading day prior to the date of BGL’s opinion. The multiples and ratios for each of the selected comparable companies were based on the most recent publicly available information. With respect to the selected companies, BGL presented the following:

          BGL selected the comparable companies based on their business and operating profiles. No comparable company identified is identical to AirNet. A complete analysis involves complex considerations and qualitative judgments concerning differences in financial and operating characteristics of the comparable companies and other factors that affect the public trading values of such companies. Mathematical analysis (such as determining the mean or median) is not in and of itself a meaningful method of using selected company data.

          Based on BGL’s assessment of AirNet’s financial metrics and the qualitative factors versus the comparable companies, BGL determined that it is reasonable that AirNet’s trading metrics would be below those of the comparable companies.

      Comparable precedent transactions analysis.

          The precedent transactions analysis values companies based on the implied pricing multiples of related transactions. In determining the precedent transactions, BGL conducted a broad search of the transactions in the air transportation and package delivery industries over the time period from 2003 to 2008. Over this time period, BGL identified five transactions for which

publicly available information was available. The following observations were made concerning comparisons of the proposed merger to the comparable precedent transactions:

	•		Size : As measured by enterprise value, AirNet’s merger transaction is at the low end of the range of comparable transactions. Typically, smaller transactions trade at discounts compared to larger transactions.
	•		Growth : Historically, AirNet has experienced a lower rate of revenue growth as compared to the comparable target companies. In addition, AirNet’s revenues and EBIT declined in 2007 and are projected to decline in fiscal year 2008 and beyond. Typically, companies with declining revenues and cash flow receive lower valuation multiples.
	•		Market Growth : AirNet’s primary bank check market is contracting. Typically, companies in contracting markets receive lower valuations.
	•		Comparability : Of the transactions analyzed, none of the targets were deemed by BGL to have a high degree of comparability to AirNet.

          For each transaction, BGL analyzed the enterprise value, the enterprise value to revenue ratio, the EBITDA ratio and the EBIT ratio. Set forth below are the results of this analysis for the transactions reviewed, based on information available from the SEC and AirNet’s 2007 financials.

          Based on BGL’s assessment of AirNet’s financial metrics and the qualitative factors versus the comparable target companies, BGL determined that it is reasonable that AirNet’s transaction metrics would be below those of the comparable precedent transactions.

      Liquidation valuation analysis .

          In conducting its fairness analysis, BGL reviewed a liquidation analysis prepared by AirNet’s management which determined an estimated market value of AirNet’s assets less the estimated costs and proceeds associated with a forced liquidation. In preparing its fairness analysis, BGL adjusted AirNet’s liquidation analysis to incorporate (i) AirNet’s unaudited January 31, 2008 balance sheet accounts, (ii) the currently estimated amount of tax refund that AirNet is expected to receive following a favorable IRS determination with respect to a change

in one of AirNet’s accounting methods, (iii) the estimated value of AirNet’s “door-to-door” express business, and (iv) the reduction of AirNet’s aircraft fleet to account for one Learjet aircraft that was sold and one Learjet aircraft that was damaged:

	•		Company Provided Discount Factors: AirNet’s management provided discount factors based on its assessment of the liquidation discount for certain of AirNet’s assets.
	•		Third-Party Appraisals: Over the course of two years, AirNet engaged two independent, third-party appraisal firms to appraise AirNet’s aircraft fleet and primary headquarters facility, respectively. The third-party appraisers used a liquidation value in preparing their appraisals. The valuations assume a compelled seller, with a sense of immediacy willing to sell on an as-is/where-is basis, without regard for the current and relevant marketplace.

          Based on AirNet’s assumptions, BGL calculated a range of implied equity value from $1.13 to $3.52 per share and the merger consideration of $2.81 per share is within this range.

      Discounted cash flow analysis.

          BGL developed a discounted cash flow analysis utilizing financial projections based on AirNet’s revenue budget for the fiscal year ending December 31, 2008, as well as financial projections provided by AirNet’s management for 2009 to 2012. Due to the uncertainty of its future cash flows, AirNet provided a range of financial projections based on various assumptions. A discounted cash flow is a traditional valuation methodology used to derive a valuation of an asset by calculating the “present value” of estimated future cash flows of the asset. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macro-economic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors. In preparing the analysis, BGL considered, among other things, the following:

	•		AirNet’s assumed cost of debt for the purposes of this analysis considering its assets, projected cash flow and business risk profile.
	•		AirNet’s assumed cost of equity for the purposes of this analysis considering its assets, projected cash flow and business risk profile.
	•		The proportion of debt and equity utilized to capitalize the business.
	•		The terminal growth rate applicable to the business.
	•		The high level of uncertainty of the projected cash flows as a result of the unknown rate of decline of AirNet’s bank business and AirNet’s ability to reduce fixed costs in proportion to the decline.

          In preparing the discounted cash flow analysis, BGL reviewed the per share value sensitivity to weighted average cost of capital (WACC) and terminal growth rate with WACC

ranging from 15% to 30% and pre-tax cost of debt ranging from 7% to 11%. Based on its assumptions, BGL calculated a range of implied equity value from $1.77 to $5.35 per share and the merger consideration of $2.81 per share is within this range.

      Leveraged buyout analysis.

          BGL considered the merger consideration in the context of a leveraged buyout analysis utilizing financial projections based on AirNet’s revenue budget for the fiscal year ending December 31, 2008, as well as financial projections provided by AirNet’s management for 2009 to 2012. With respect to the leveraged buyout analysis, BGL considered the following:

	•		The level of and pricing of debt capital available in the market for AirNet considering its assets, projected cash flow and business risk profile.
	•		The internal rate of return reasonably expected by investors considering the level of debt capital available to AirNet and AirNet’s projected cash flow, expected future valuation and business risk profile.
	•		Management incentive options programs likely to be required by AirNet’s management team considering AirNet’s level of debt, projected cash flow and expected future valuation.
	•		The high level of uncertainty of AirNet’s projected cash flows as a result of the unknown rate of decline of its bank business and its ability to reduce fixed costs in proportion to the decline.
	•		The high level of uncertainty in expanding AirNet’s business in the dedicated charter flying market.

          BGL performed the leverage buyout analysis after analyzing and evaluating potential sources and uses of funds, value expansion assumptions, equity return assumptions and internal rate of return sensitivity to per share price and exit multiples using a per share price range above and below the merger consideration. The internal rates of return calculated ranged from 27.7% to 38.6%, which BGL determined are reasonable for a transaction of this nature.

      Qualitative Discussion .

          In addition to the quantitative methodologies, BGL considered a number of qualitative factors in the rendering of its fairness opinion, including, but not limited to, the following:

	•		AirNet’s declining revenue as the market for physically transporting paper bank checks contracts.
	•		The high level of uncertainty of AirNet’s projected cash flows as a result of the unknown rate of decline of its bank business and its ability to reduce fixed costs in proportion to the decline.
	•		Investments required to support AirNet’s business transition.

	•		The results of the marketing and business unit sale processes and other negotiations that spanned from April 2005 to the present.
	•		The corporate finance and strategic alternatives available to AirNet outside the proposed merger.

          While the foregoing summary describes certain analyses and factors that BGL deemed material in rendering its opinion, it is not a comprehensive description of all analyses and factors considered by BGL. The preparation of a fairness opinion is a complex process that involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods to particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Several analytical methodologies were employed and no one method of analysis should be regarded as critical to the overall conclusion reached by BGL. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. Accordingly, the conclusions reached by BGL were based on all analyses and factors taken as a whole and also on application of BGL’s own experience and judgment. Such conclusions may involve significant elements of subjective judgment and qualitative analysis. The analyses performed by BGL are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by such analyses. Accordingly, analyses relating to the value of a business do not purport to be appraisals or to reflect the prices at which the business actually may be purchased.

AirNet’s Relationship with BGL

          The terms of the proposed merger and the merger consideration were determined through arms-length negotiations between the parties and were unanimously approved by the members of AirNet’s board of directors. BGL’s opinion does not address any other aspects of the proposed merger and does not constitute a recommendation to any shareholder as to how to vote or to take any action with respect to the merger agreement and the merger. BGL’s opinion was one of the many factors taken into consideration by AirNet’s board of directors in making its unanimous decision to adopt the merger agreement and approve the merger. BGL’s analysis summarized above should not be viewed as determinative of the opinion of the board of directors with respect to AirNet’s value or whether the board of directors would have been willing to agree to a different price.

          The board of directors retained BGL based on BGL’s experience as a financial advisor in connection with mergers and acquisitions and in securities valuations generally. BGL is a nationally recognized investment banking firm. BGL, as part of its investment banking business, is regularly engaged in the evaluation of capital structures, the valuation of businesses and their securities in connection with mergers and acquisitions, competitive biddings, private placements, financial restructurings and other financial services. In the ordinary course of its business, BGL may have investment banking, financial advisory and other relationships with parties other than AirNet, pursuant to which BGL may acquire information of potential interest to AirNet. BGL has no obligation to disclose any such information to AirNet or to use any such information in the preparation of its opinion.

          BGL acted as financial advisor to AirNet from January 5, 2005 to September 30, 2006. In its role as financial advisor to AirNet, BGL was compensated for completing a strategic alternatives analysis for the Special Committee of the board of directors and advising AirNet and the Strategy Committee of the board of directors with respect to a marketing process for the potential sale of all or certain of AirNet’s businesses, which resulted in a sale of the Jetride passenger charter business on September 26, 2006. Following the termination of the formal engagement with BGL in September 2006, BGL continued to assist AirNet’s management in unsolicited discussions with interested parties between September 2006 and April 2007.

          In January 2008, the AirNet board of directors retained BGL to act as its financial advisor in connection with the sale of all or a substantial portion of AirNet’s assets or capital stock or any merger, business combination or similar transaction with certain identified parties, including Bayside Capital and any of its affiliates. Accordingly, because AirNet Holdings and AirNet Acquisition are affiliates of Bayside Capital, BGL will be paid a success fee upon the closing of the merger. The fee paid to BGL for delivering its fairness opinion will be deducted from any success fee due to BGL upon the closing of the merger. MergeGlobal also has acted as financial advisor to AirNet in connection with the proposed merger and will share the success fee in excess of the fee paid to BGL for delivering its fairness opinion upon the closing of the merger. The success fee is to be $750,000, plus 3% of aggregate consideration in excess of $25 million but less than or equal to $30 million, plus 5% of aggregate consideration in excess of $30 million.

          In the ordinary course of its business, BGL acts as a financial advisor to buyers and sellers and markets transactions to various parties. During the last two years, (i) BGL was retained to serve as financial advisor to a company controlled by an affiliate of Bayside Capital for which BGL received a fee, (ii) BGL sold a business to an affiliate of Bayside Capital, for which BGL received a transaction fee from the seller of the business and (iii) certain professionals at BGL invested in a company that is majority-owned by an affiliate of Bayside Capital.

          In consideration for its services in rendering the fairness opinion, BGL has been paid a fee of $325,000 based on the delivery of its fairness opinion, which fee was contingent upon the execution of a definitive merger agreement but is not contingent upon the closing of the merger. BGL has written procedures for preparing a fairness opinion. BGL’s fairness opinion and related materials presented to the board were approved by a fairness opinion committee at BGL. BGL has determined that its process to determine the valuation analyses used is appropriate.

           The BGL opinion is addressed to the board of directors of AirNet and addresses only the fairness, from a financial point of view, of the proposed merger consideration to AirNet’s shareholders, and it may not be used or relied upon for any other purpose; provided that BGL has consented to references to its opinion in proxy solicitation materials sent to AirNet’s shareholders and other constituencies and to the reproduction of the BGL opinion in full in any proxy statement or information statement or other filing relating to the merger which AirNet must make with the SEC. The BGL opinion is not intended to be, nor does it constitute, a recommendation to AirNet’s board of directors or any of AirNet’s shareholders as to how to vote with respect to the proposed merger or the merger agreement.

Interests of Certain Persons in the Merger

          In considering the recommendation of the board of directors, shareholders should be aware that Bruce D. Parker, AirNet’s chairman of the board, president and chief executive officer, will receive payments and other benefits in connection with the merger which result in his having interests in the merger that may be different from, or in addition to, the interests of the shareholders. The board of directors was aware of these interests, as it considered the merger agreement. In addition, the non-employee directors of AirNet will receive a minimal amount of additional consideration with respect to their “in-the-money” options that will be accelerated and cashed out in connection with the merger.

           Interests of Bruce D. Parker . Bruce D. Parker is AirNet’s chairman of the board, president and chief executive officer and has served in such roles since December 2006. In connection with his appointment to serve as AirNet’s president and chief executive officer, Mr. Parker and AirNet entered into an employment agreement dated as of December 28, 2006. Mr. Parker’s employment agreement provides that, upon a change of control of AirNet, which the merger will constitute, Mr. Parker will be entitled to receive:

	•		any accrued but unpaid base salary;
	•		any accrued bonus, which is calculated based upon, if possible, measurement of the attainment of goals through the date of the merger, or if such measurement is not possible, based upon Mr. Parker’s target bonus through the date of the merger;
	•		the value of any vacation that is accrued but unused;
	•		any accrued rights and benefits provided under AirNet’s plans and programs;
	•		full vesting of all outstanding option awards; and
	•		a single lump sum payment, payable within 30 days after the merger, equal to $360,000, which represents Mr. Parker’s annual base salary.

          Mr. Parker does not own any common shares of AirNet, and none of Mr. Parker’s outstanding options are “in-the-money” even upon acceleration. Based on the terms of Mr. Parker’s employment agreement, AirNet has calculated the amount which Mr. Parker will be entitled to receive upon the closing of the merger at approximately $540,000.

           Cash-Out of Outstanding Options . AirNet has previously granted options to its employees, including its executive officers, and non-employee directors. Under the merger agreement, at the effective time of the merger, each outstanding “in-the-money” option to purchase common shares of AirNet (whether or not then vested or exercisable) will be canceled, and the holder of such option will be entitled to receive a cash payment equal to the excess, if any, of $2.81 over the exercise price per common share subject to the option, multiplied by the number of common shares subject to the unexercised portion of the option. Each payment will be made without interest and net of applicable withholding taxes. None of the executive officers of AirNet holds any options that are “in-the-money.” The non-employee directors of AirNet will

receive an aggregate of approximately $22,880 in connection with the cancellation of their outstanding options upon closing of the merger (prior to reduction for any amounts required to be withheld for taxes). See the discussion under the caption “Proposal 1 — The Merger Agreement — Treatment of AirNet Options.”

           Indemnification . AirNet Holdings has agreed that the surviving corporation’s obligation to indemnify the current and former directors and officers of AirNet for acts or omissions occurring prior to the effective time of the merger will continue in full force and effect through the expiration of all applicable statutes of limitation with respect to any claims against the current or former directors and officers of AirNet for any such acts or omissions. The merger agreement further requires that for a period of three years after the effective time of the merger, the surviving corporation will maintain in effect AirNet’s current directors’ and officers’ liability insurance policies, or purchase substantially equivalent policies, with respect to matters arising on or before the effective time of the merger so long as the annual premiums do not exceed 200% of the last annual premium paid by AirNet prior to execution of the merger agreement, in which case the surviving corporation would be required to purchase as much insurance as reasonably practicable for an amount equal to 200% of the last annual premium paid by AirNet prior to the execution of the merger agreement.

Certain Material U.S. Federal Income Tax Consequences

          The following is a summary of certain material U.S. federal income tax consequences of the merger to “U.S. holders” (as defined below) of AirNet common shares. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury Department regulations thereunder, U.S. Internal Revenue Service rulings and pronouncements, reports of congressional committees, judicial decisions and current administrative rulings and practice, all as in effect on the date of this proxy statement. Any change to the foregoing sources could be retroactive and, accordingly, the following statements and conclusions could be modified or altered. AirNet has not requested a ruling from the U.S. Internal Revenue Service with respect to the matters discussed in this summary, and there is no assurance that the U.S. Internal Revenue Service will agree with the conclusions set forth in this summary. In addition, AirNet has not requested or received a tax opinion with respect to the U.S. federal income tax consequences of the merger.

          For purposes of this discussion, the term “U.S. holder” means a beneficial owner of AirNet common shares that, for U.S. federal income tax purposes, is: (i) an individual citizen or resident of the United States; (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any State thereof or the District of Columbia; (iii) a trust (a) the administration of which is subject to the primary supervision of a court within the United States and for which one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) for which a valid election is in effect under applicable U.S. Treasury Department regulations to be treated as a U.S. Person; or (iv) an estate the income of which is subject to U.S. federal income tax regardless of its source.

          Holders of AirNet common shares who are not U.S. holders may have different tax consequences from those described below and are urged to consult their own tax advisors regarding the tax treatment to them under U.S. and non-U.S. tax laws.

          If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds AirNet common shares, the U.S. federal income tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partnership. A holder of AirNet common shares that is a partnership, and partners in such partnership, should consult their own tax advisors regarding the tax consequences of the receipt of cash in exchange for AirNet common shares pursuant to the merger.

          This discussion assumes that a U.S. holder holds AirNet common shares as capital assets. This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a U.S. holder in light of the U.S. holder’s particular circumstances, or those U.S. holders subject to special treatment under the Code (including, without limitation, insurance companies, dealers or brokers in securities or currencies, traders in securities who elect to apply a mark-to-market method of accounting, tax-exempt organizations, financial institutions, mutual funds, U.S. expatriates and shareholders subject to the alternative minimum tax), U.S. holders who hold AirNet common shares as part of a hedging, straddle, conversion or other integrated transaction for U.S. federal income tax purposes, U.S. holders who acquired their AirNet common shares through the exercise of employee stock options or other compensation arrangements or U.S. holders who exercise statutory dissenters’ rights. In addition, this discussion does not address any aspect of foreign, state, local, estate or gift taxation that may be applicable to a U.S. holder. U.S. holders are urged to consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of the receipt of cash in exchange for AirNet common shares pursuant to the merger.

          The receipt of cash in exchange for AirNet common shares pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes (and also may be a taxable transaction under applicable state, local and foreign income and other tax laws). In general, for U.S. federal income tax purposes, a U.S. holder will recognize capital gain or loss equal to the difference between the amount of cash received and the U.S. holder’s aggregate adjusted tax basis in the AirNet common shares converted to cash in the merger. Gain or loss will be calculated separately for each block of AirNet common shares (i.e., common shares acquired at the same cost in a single transaction) converted to cash in the merger. If, at the effective time of the merger, the U.S. holder’s AirNet common shares were held for more than one year, the gain or loss will be long-term capital gain or loss, and any such long-term capital gain generally will be subject (in the case of U.S. holders who are individuals) to tax at a maximum U.S. federal income tax rate of 15%. If, however, at the effective time of the merger, the U.S. holder’s AirNet common shares were held for one year or less, the gain or loss will be short-term capital gain or loss. The deductibility of capital losses by U.S. holders is subject to limitations under the Code.

          In general, dissenting U.S. holders who exercise their right to appraisal also will recognize gain or loss. Any U.S. holder considering exercising statutory dissenters’ rights should consult with such U.S. holder’s own tax advisor regarding the tax consequences thereof.

          Under the U.S. federal income tax backup withholding rules, unless an exemption applies, the payment agent (i.e., the depositary) generally is required to and will withhold and remit to the U.S. Treasury Department 28% of all payments to which an AirNet shareholder or other payee is entitled pursuant to the merger, unless the AirNet shareholder or other payee (i) is a corporation or comes within other exempt categories and, when required, demonstrates this fact and otherwise complies with the applicable requirements of the backup withholding rules or (ii) (a) provides such shareholder’s correct taxpayer identification number (i.e., the shareholder’s social security number, in the case of an individual shareholder, or the shareholder’s employer identification number, in the case of other shareholders), (b) certifies, under penalties of perjury that the number is correct (or properly certifies that the shareholder is awaiting a taxpayer identification number), (c) certifies that such shareholder is exempt from backup withholding and (d) otherwise complies with the applicable requirements of the backup withholding rules. Each AirNet shareholder and, if applicable, each other payee should complete, sign and return to the payment agent the Substitute Form W-9 included as part of the letters of transmittal sent to shareholders pursuant to the merger in order to provide the information and certifications necessary to avoid backup withholding, unless an applicable exemption exists and is provide in a manner satisfactory to the payment agent. AirNet shareholders who are neither U.S. citizens nor U.S. resident aliens should complete, sign and submit a Form W-8BEN, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.” Backup withholding is not an additional tax. Generally, any amounts withheld under the backup withholding rules described above will be refunded or credited against an AirNet shareholder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the U.S. Internal Revenue Service in a timely manner.

          The discussion above of certain material U.S. federal income tax consequences is included for general information purposes only. AirNet shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of the receipt of cash in exchange for AirNet common shares pursuant to the merger.

Existing Relationships with Bayside Capital, AirNet Holdings or AirNet Acquisition

          AirNet has never conducted business with, nor has it had any business relationship with, Bayside Capital, AirNet Holdings or AirNet Acquisition prior to the transactions described in the merger agreement. As of the date of this proxy statement, except for the 1,934,971 common shares acquired by AirNet Holdings in connection with the execution of the merger agreement, neither Bayside Capital nor any of its affiliates owns any common shares of AirNet.

Rights of Dissenting Shareholders

          The following summary is a description of the steps you must take if you desire to perfect dissenters’ rights with respect to the merger. The summary is not intended to be complete and is qualified in its entirety by reference to Section 1701.85 of the Ohio Revised Code, a copy of which is attached as Appendix C to this proxy statement. We recommend that you consult with your own counsel if you have questions with respect to your rights under Section 1701.85.

          “Dissenters’ rights” represent your right to dissent from the merger and to have the “fair cash value” of your common shares determined by a court and paid in cash. The “fair cash value” of a common share is the amount that a willing seller who is under no compulsion to sell would be willing to accept and that a willing buyer who is under no compulsion to purchase would be willing to pay. The “fair cash value” is determined as of the day prior to the day on which the vote of the shareholders to adopt the merger agreement and approve the merger is taken. When determining “fair cash value,” any appreciation or depreciation in market value resulting from the proposed merger is excluded. In no event can the “fair cash value” of a common share exceed the amount specified in the demand of the particular shareholder discussed below.

          To perfect your dissenters’ rights, you must satisfy each of the following conditions:

	•		you must be the record holder of the dissenting shares on May 1, 2008. If you have a beneficial interest in common shares held of record in the name of any other person for which you desire to perfect dissenters’ rights, you must cause the shareholder of record to timely and properly act to perfect such rights;
	•		you must not vote in favor of adoption of the merger agreement and approval of the merger. You waive your dissenters’ rights if (i) you vote “FOR” adoption of the merger agreement and approval of the merger or (ii) you submit a validly signed and dated proxy card which does not indicate how you want your common shares voted, in which case your common shares will be voted “FOR” adoption of the merger agreement and approval of the merger;
	•		on or before the tenth day following the shareholders’ vote adopting the merger agreement and approving the merger (i.e., on or before June 14, 2008, assuming that AirNet’s shareholders adopt the merger agreement and approve the merger on the date the special meeting convenes), you must serve a written demand on AirNet for the “fair cash value” of the dissenting shares. The written demand must specify your name and address, the number of common shares as to which relief is sought and the

			amount that you claim as the “fair cash value” of the common shares for which you are exercising dissenters’ rights. Neither voting (in person or by properly executed proxy) against, abstaining from voting on nor failing to vote on the proposal to adopt the merger agreement and approve the merger will constitute a written demand on AirNet for the “fair cash value” of your dissenting shares. The written demand must be in addition to and separate from any proxy or vote;
	•		if requested by AirNet, you must submit to AirNet your certificates for the dissenting shares within 15 days after receipt of AirNet’s request. AirNet will then endorse the certificates with a legend that demand for “fair cash value” has been made; and
	•		if you and AirNet cannot agree on the “fair cash value” of your dissenting shares, either you or AirNet must, within three months after service of your written demand, file or join in a petition in the Court of Common Pleas of Franklin County, Ohio, for a determination of the “fair cash value” of the dissenting shares.

          If you dissent from the merger, your right to be paid the “fair cash value” of your common shares will terminate if:

	•		for any reason, the merger is not completed;
	•		you fail to serve a timely and appropriate written demand upon AirNet;
	•		you do not, upon request of AirNet, make timely and appropriate surrender of the certificates evidencing your dissenting shares for endorsement of a legend that demand for the “fair cash value” of such common shares has been made;
	•		you withdraw your demand with the consent of the directors of AirNet;
	•		you and AirNet have not agreed upon the “fair cash value” of your dissenting shares and neither you nor AirNet has timely filed or joined in an appropriate petition in the Court of Common Pleas of Franklin County, Ohio for a determination of such “fair cash value”; or
	•		you otherwise fail to comply with the requirements of Section 1701.85 of the Ohio Revised Code.

PROPOSAL 1 — THE MERGER AGREEMENT

           The following summary describes the material provisions of the merger agreement, and is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Appendix A to this proxy statement. The provisions of the merger agreement are extensive and not easily summarized. Accordingly, this summary may not contain all of the information about the merger agreement that is important to you. The merger agreement is incorporated by reference in this proxy statement. We encourage you to read the merger agreement carefully and in its entirety for a more complete understanding of the terms of the merger.

           Additional information about AirNet, AirNet Holdings or AirNet Acquisition may be found elsewhere in this proxy statement and in the other public filings that AirNet makes with the SEC. See the discussion under the caption “Where You Can Find More Information”.

          The merger agreement contains representations and warranties that the parties made to and solely for the benefit of each other. The assertions embodied in those representations and warranties are subject, in some cases, to specified exceptions, qualifications, limitations and supplemental information, including knowledge qualifiers and contractual standards of materiality, such as materiality qualifiers and the occurrence of a material adverse effect, that are different from those generally applicable under federal securities law, as well as detailed information set forth in a disclosure schedule provided by AirNet in connection with signing the merger agreement. While AirNet does not believe that the disclosure schedule contains non-public information that the securities laws require to be publicly disclosed, the disclosure schedule does contain detailed information that modifies, qualifies and creates exceptions to AirNet’s representations and warranties set forth in the merger agreement. In addition, some representations and warranties may have been included in the merger agreement for the purpose of allocating risk between AirNet and AirNet Holdings rather than to establish matters as facts. The merger agreement is described in this proxy statement, and is included as Appendix A hereto, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding AirNet or its business. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since (i) they were only made as of the date of the merger agreement or a prior, specified date, (ii) in some cases they are subject to knowledge, materiality and material adverse effect qualifiers, and (iii) they are modified in important part by detailed information included in the disclosure schedule. Finally, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in AirNet’s public disclosures.

Structure of the Merger

          Under the merger agreement, AirNet Acquisition will merge with and into AirNet, with AirNet continuing as the surviving corporation. As a result, AirNet will become a direct subsidiary of AirNet Holdings. The officers and directors of AirNet Acquisition immediately prior to the merger will be the officers and directors of AirNet as the surviving corporation after the effective time of the merger. The effective time of the merger is sometimes referred to in this proxy statement as the “effective time”.

          The code of regulations of AirNet Acquisition in effect immediately prior to the effective time will be the code of regulations of the surviving corporation until thereafter amended as provided therein or by applicable law. The articles of incorporation of the surviving corporation will be amended and restated at the effective time in their entirety to read as the articles of AirNet Acquisition immediately prior to the effective time, except that the name of the surviving corporation will remain “AirNet Systems, Inc.”

Closing of the Merger

          Unless the parties otherwise agree, the closing of the merger will take place no later than the fifth business day after the satisfaction or waiver (to the extent permitted by law) of the conditions to closing set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at closing, but subject to the satisfaction or waiver of those conditions at such time). The parties will file a certificate of merger with the Secretary of State of the State of Ohio on the closing date of the merger. The merger will become effective when the certificate of merger is filed or at such later time as AirNet and AirNet Acquisition may agree upon and specify in the certificate of merger. Subject to the receipt of all necessary regulatory approvals and assuming no unexpected delays, we currently anticipate the closing will occur shortly after the special meeting.

Merger Consideration and Conversion of AirNet Common Shares

          At the effective time of the merger, each common share of AirNet issued and outstanding immediately prior to the effective time (other than common shares owned directly or indirectly by AirNet or AirNet Holdings or any of their respective subsidiaries or common shares with respect to which dissenters’ rights are perfected) will be converted into the right to receive $2.81 in cash, without interest. All common shares held by AirNet, AirNet Holdings and their respective subsidiaries will be cancelled without any payment. Applicable taxes will be withheld from any such payment.

          Common shares held by dissenting shareholders who have complied with all applicable requirements of Ohio law will not be converted into the right to receive $2.81 per share, unless the dissenting shareholder fails to perfect, withdraws or otherwise loses such shareholder’s right to appraisal. More information on the treatment of common shares held by dissenting shareholders is set forth under caption “The Merger – Rights of Dissenting Shareholders” in this proxy statement.

Treatment of AirNet Options

          At the effective time of the merger, each outstanding option to purchase AirNet common shares, whether or not vested or exercisable, will be cancelled and converted into the right to receive, without interest, a cash payment in an amount equal to the excess, if any, of $2.81 over the exercise price per common share subject to the option, multiplied by the number of common shares subject to the unexercised portion of the option. Applicable taxes will be withheld from any such payment. Options with exercise prices in excess of $2.81 per share will be cancelled without payment therefor.

Purchase of Common Shares by AirNet Holdings

          As contemplated by the terms of the merger agreement and concurrently with its execution and delivery, AirNet Holdings purchased from AirNet 1,934,137 common shares at the price of $2.81 per share in cash, pursuant to a subscription agreement, dated March 31, 2008. The common shares purchased by AirNet Holdings will be “excluded shares” under the merger agreement and will not be converted into the right to receive the $2.81 per share. Concurrently with the purchase of the 1,934,137 common shares by AirNet Holdings, AirNet and AirNet Holdings entered into a registration rights agreement, dated as of March 31, 2008, providing one demand registration right and unlimited piggyback registration rights in favor of AirNet Holdings in respect of the 1,934,137 common shares purchased from AirNet. There is no put right related to such common shares if the merger is not consummated.

Exchange of Share Certificates

          Prior to the closing of the merger, AirNet Holdings will engage a depositary to handle the exchange of AirNet share certificates for cash. Immediately prior to the effective time, AirNet Acquisition will deposit with the depositary cash in an amount sufficient for the depositary to pay the merger consideration to holders of AirNet’s common shares. Promptly following the effective time, the depositary will send a letter of transmittal and instructions to each former AirNet shareholder explaining the procedure for surrendering AirNet share certificates in exchange for the applicable cash payment.

          Shareholders should not return their AirNet share certificates with the accompanying proxy card and they should not forward their share certificates to the depositary without a duly completed and validly executed letter of transmittal.

          After the effective time, each certificate that previously represented AirNet common shares will only represent the right to receive a cash payment in the amount that the holder is entitled to receive pursuant to the merger agreement, without interest, and less any required withholdings under tax or other applicable laws. After the close of business on the closing date, there will be no further registration of transfers of AirNet’s common shares.

          Consideration will be paid to a holder of AirNet common shares only when the holder’s common shares are surrendered to the depositary, together with a duly completed and validly executed letter of transmittal and any other documents as the depositary may reasonably require, and upon such a surrender and payment, the certificate shall be cancelled. No interest will be paid or will accrue on the cash payable upon surrender of any certificate. The consideration may be paid to a person other than the person in whose name the corresponding certificate is registered if the certificate is properly endorsed or is otherwise in the proper form for transfer and is accompanied by reasonable evidence that any applicable stock transfer taxes have been paid, are not applicable or will be paid by such transferee. Shareholders no longer in possession of their share certificates because they have been lost, stolen or destroyed may, in exchange for the merger consideration, deliver an affidavit and, if required, place a bond against potential claims with respect to the missing certificates in a reasonable amount as AirNet Holdings may direct. Additional information about the procedures to be followed by shareholders with lost, stolen or destroyed share certificates will be provided in the letter of transmittal.

          None of AirNet Holdings, AirNet, AirNet Acquisition, the surviving corporation or the depositary will be liable to any person for any amounts delivered to a public official pursuant to any applicable abandoned property, escheat or similar laws. All funds held by the depositary for payment to the holders of common shares that are not disbursed six months after the effective time of the merger will be delivered to the surviving corporation. Thereafter, each holder of a certificate formerly representing AirNet common shares entitled to the merger consideration who has not received the merger consideration must look only to the surviving corporation for payment of the merger consideration that may be payable upon due surrender of the certificates held by them, without interest. Any merger consideration remaining unclaimed five years after the effective time of the merger will, to the extent permitted by applicable law, become the property of the surviving corporation free and clear of any claims or interest of any person previously entitled thereto.

Representations and Warranties

          The merger agreement contains representations and warranties made by AirNet relating to, among other things, the following:

	•		due organization; valid existence and good standing; power and authority to own its assets and carry on its business; qualification in other jurisdictions; organizational documents; and subsidiaries;
	•		capitalization of AirNet and its subsidiaries; outstanding equity-based awards and agreements; rights, warrants and options to acquire AirNet common shares; obligations to repurchase or redeem, or vote or dispose of, AirNet’s capital stock; obligations to invest in other entities; issued indebtedness; shareholder agreements and voting trusts; and title to stock of AirNet’s subsidiaries;
	•		corporate power and authority to enter into and consummate the transactions contemplated by the merger agreement; valid execution and delivery and enforceability of the merger agreement; approval and recommendation to the shareholders of the merger agreement by AirNet’s board of directors; required governmental filings or consents; and absence of conflicts of the merger agreement and the transactions contemplated thereby with organizational documents, material contracts and obligations, or applicable law;
	•		AirNet’s filings with the SEC and financial statements;
	•		AirNet’s disclosure controls and procedures and internal control over financial reporting;
	•		absence of undisclosed material liabilities;
	•		compliance with applicable laws, and possession of necessary licenses, permits, consents and appraisals to carry on the respective businesses of AirNet and its subsidiaries as they are now being conducted;

	•		environmental laws and regulations;
	•		employee benefit plan matters, post-employment compensation and deferred compensation matters;
	•		absence of material adverse changes or events and conduct of the business of AirNet and its subsidiaries since December 31, 2007;
	•		absence of material litigation or investigations;
	•		accuracy of information contained in this proxy statement and compliance with SEC regulations;
	•		tax matters, including payment of taxes and filing of returns;
	•		employee and labor matters;
	•		intellectual property;
	•		title to property and assets and leases and subleases for real property;
	•		receipt of the fairness opinion of BGL;
	•		vote of AirNet’s shareholders required to adopt the merger agreement and approve the merger;
	•		inapplicability to the merger of anti-takeover laws;
	•		material contracts;
	•		finders’ fees due in connection with the merger;
	•		insurance policies;
	•		related party transactions; and
	•		customers and suppliers.

          The representations and warranties of AirNet Holdings and AirNet Acquisition are more limited and relate to, among other things, the following:

	•		due organization; valid existence; good standing of AirNet Holdings and AirNet Acquisition; power and authority to own their respective assets and carry on their respective businesses as presently conducted; and qualification in other jurisdictions;
	•		corporate authority to enter into and perform the merger agreement; valid execution and delivery of the merger agreement; enforceability of the merger

			agreement and approval of the merger agreement by AirNet Acquisition’s board of directors and shareholders; required governmental filings or consents; and absence of conflicts of the merger agreement and the transactions contemplated thereby with organizational documents, material contracts or applicable law;
	•		absence of material litigation or investigations;
	•		accuracy of information supplied by AirNet Holdings and AirNet Acquisition for inclusion in this proxy statement;
	•		availability of funds to make all required payments in connection with the merger;
	•		capitalization of AirNet Acquisition;
	•		ownership of AirNet common shares by AirNet Holdings and AirNet Acquisition and absence of status as an “interested shareholder” under Ohio law; and
	•		finders’ fees due in connection with the merger.

          Certain of the representations and warranties of AirNet and of AirNet Holdings and AirNet Acquisition are qualified as to materiality or “material adverse effect.” For purposes of the merger agreement, “material adverse effect” means, with respect to AirNet, any fact, circumstance, event, change, effect, development or occurrence that, either alone or together, (i) materially hinders, impairs or delays AirNet’s ability to perform its obligations under the merger agreement or consummate the merger and the other transactions contemplated by the merger agreement, (ii) materially hinders, impairs or delays the ability of AirNet and its subsidiaries to conduct their businesses after the closing in substantially the same manner as before the closing, or (iii) is materially adverse to the business, financial condition or results of operations of AirNet and its subsidiaries taken as a whole. In determining whether a material adverse effect on AirNet has occurred pursuant to clause (iii) above, there are specified exceptions, including (i) changes in the U.S. economy (that do not disproportionately affect AirNet and its subsidiaries taken as a whole) or changes affecting the financial or securities markets generally, (ii) changes directly resulting from acts of war or terrorism (that do not disproportionately affect AirNet and its subsidiaries taken as a whole), (iii) changes directly resulting from the announcement of the merger, (iv) changes in generally accepted accounting principles, (v) change, in and of itself, in the market price or trading volume of AirNet’s common shares and (vi) changes directly resulting from the continued anticipated decline in AirNet’s revenues from its bank customers.

          With respect to AirNet Holdings and AirNet Acquisition, “material adverse effect” means a fact, event or occurrence that materially hinders, impairs or delays the ability of AirNet Holdings and AirNet Acquisition to consummate the merger and the other transactions contemplated by the merger agreement.

          The representations and warranties in the merger agreement do not survive the closing of the merger.

Covenants Relating to Conduct of Business

          AirNet has agreed to covenants in the merger agreement that affect the conduct of its business between the date of the merger agreement and the effective time of the merger. Prior to the effective time, subject to specified exceptions, AirNet and each of its subsidiaries are required to conduct business in the ordinary course and consistent with past practice, use commercially reasonable efforts to maintain intact their business organization, preserve relationships with governmental entities, customers, suppliers, creditors, lessors, employees and others having business dealings with them, and keep available the services of their present employees and agents. In addition, absent the written consent of AirNet Acquisition and subject to specified exceptions, AirNet will not, and will not permit any of its subsidiaries to (or agree to):

	•		declare or pay any dividend, except for cash dividends to AirNet from wholly-owned subsidiaries;
	•		adjust, split, combine, or reclassify any of its capital stock or authorize the issuance of any other securities in respect of its capital stock;
	•		increase in any manner the compensation, severance, retirement or other benefits of any employees, directors, consultants, independent contractors or service providers, except for increases in the ordinary course of business consistent with past practice to employees making less than $100,000 annually; pay any bonus or pension, severance, termination or retirement benefits to any employees, directors, consultants, independent contractors or service providers (above and beyond AirNet’s standard benefits on the date of the merger agreement and “stay” bonuses as may be agreed to by AirNet Acquisition); enter into, amend (other than immaterial amendments) or adopt any compensation or benefit plan, program policy or arrangement, including pension, severance and termination benefits (other than “stay” bonuses as may be agreed to by AirNet Acquisition); accelerate the vesting of equity-based awards; fund a trust or similar arrangement to secure payment under any benefit plan; change the actuarial or other assumptions used to calculate funding obligations of benefit plans or change the way contributions are made; amend or terminate any benefit plan or outstanding awards under such a plan; or make or forgive any loan to a director, officer or employee;
	•		implement or adopt any material change in tax or financial accounting principles, policies or procedures or its methods of reporting income, deductions or other material items, except for specified exceptions or as required by generally accepted accounting principles, SEC or U.S. Internal Revenue Service rules or applicable law;
	•		enter into any closing agreement with respect to material taxes; settle any material tax liability, claim or assessment; make, revoke or change a material tax election; file or surrender a claim for a material refund; extend the statute of limitations for the collection of taxes; file any material amended tax return; or obtain a material tax ruling;

	•		adopt or propose any amendment or waiver of any provision of its articles of incorporation, code of regulations or other organizational documents;
	•		grant, issue, deliver, sell, transfer, dispose of, pledge or encumber shares of its capital stock or other ownership interests or any securities convertible or exchangeable for any such shares or interests, except for issuances upon the exercise of options, or take any action to cause unexercisable options to become exercisable;
	•		purchase, redeem or acquire shares of capital stock or ownership interests or securities convertible or exchangeable for any such shares or interests;
	•		incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money; issue or sell any debt securities or rights or options to acquire debt securities; guarantee the debt securities of another person; or enter into any keep well agreement;
	•		sell, lease, license, transfer, exchange, swap, mortgage or otherwise encumber any properties or assets, other than sales of inventory and used equipment in the ordinary course of business consistent with past practice having an aggregate value of less than $500,000;
	•		amend, modify, terminate or enter into any material contract or fail to enforce any rights under a material contract, other than in the ordinary course of business consistent with past practice;
	•		effect a “plant closing” (as defined in the WARN Act or any similar state, local or foreign law) or other mass layoff;
	•		make or authorize any capital expenditures not contemplated by AirNet’s capital expenditure budget and having a value in excess of $100,000 in the aggregate;
	•		enter into any capital or operating leases or acquire any properties or assets from any person with a value or purchase price in the aggregate in excess of $100,000, other than permitted capital expenditures and purchases of raw materials, inventory or supplies in the ordinary course of business consistent with past practice;
	•		make any acquisition of or investment in any other person or business, other than acquisitions or investments less than $50,000 in the aggregate and in the ordinary course of business consistent with past practice;
	•		waive, release, assign, settle or compromise any litigation, claim or other proceeding (other than accounts receivable in the ordinary course of business) or pay, discharge or satisfy any claims, liabilities or obligations in excess of $100,000 in the aggregate, other than in the ordinary course of business consistent with past practice;

	•		take or omit to take any action that is intended or would reasonably be expected to result in the conditions to the merger not being satisfied or being materially delayed in violation of the merger agreement;
	•		adopt or propose a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of AirNet or any subsidiary, or otherwise enter into any agreements imposing material changes or restrictions on its assets, operations or business; or
	•		agree to take, commit to take or adopt board resolutions in support of any of the foregoing.

No Solicitation by AirNet

          Under the terms of the merger agreement, AirNet has agreed that it will cease and terminate all existing discussions and negotiations with any persons with respect to an acquisition of AirNet, and will inform all such persons of its obligations related to the non-solicitation of acquisition proposals under the merger agreement. Further, subject to certain exceptions described below, AirNet has agreed that it will not, and will not permit its subsidiaries to and will cause its representatives not to, directly or indirectly:

	•		initiate, solicit or encourage any inquiries or the making, submission or announcement of any inquiry, proposal or offer that constitutes or could reasonably be expected to lead to an alternative acquisition (as described below);
	•		facilitate or take any action designed to, or which could reasonably be expected to, facilitate any effort or attempt to make, submit or announce an inquiry, offer or proposal relating to any possible alternative acquisition; or
	•		engage in, continue or otherwise participate in any discussions, negotiations or communications with, or provide any information to, or otherwise cooperate with, any person relating to a possible alternative acquisition.

          Under the merger agreement, an “alternative acquisition” means any inquiry, proposal or offer from any person relating to any:

	•		direct or indirect acquisition or purchase, in one transaction or a series of related transactions, of a business or assets that constitute 25% or more of the net revenues or assets of AirNet and its subsidiaries on a consolidated basis;
	•		direct or indirect acquisition or purchase, in one transaction or a series of related transactions, of 25% or more of any class of the equity securities of AirNet or its subsidiaries;
	•		tender or exchange offer that if consummated would result in any person beneficially owning 25% or more of any class of the equity securities of AirNet or any of its subsidiaries; or

•

merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution, joint venture, partnership, share exchange or similar transaction involving AirNet or any of its subsidiaries, other than the transactions contemplated by the merger agreement and the liquidation of certain specified subsidiaries.

          AirNet has agreed to notify AirNet Acquisition within one business day of receipt of any proposal, offer or inquiry received by AirNet, any of its subsidiaries or any of their respective representatives or any information requested from AirNet or any discussions or negotiations that are sought to be initiated or continued with AirNet, any of its subsidiaries or any of their respective representatives regarding a potential alternative acquisition. AirNet must provide oral and written notice to AirNet Acquisition of such proposal setting forth the material terms and conditions of such proposal and the identity of the person making the proposal. Additionally, AirNet is required to keep AirNet Acquisition fully informed of the status of the proposal and any subsequent changes to the terms and conditions of the proposal.

          If, prior to approval of the merger by AirNet’s shareholders, AirNet receives from any person a written and unsolicited proposal for an alternative acquisition and AirNet’s board of directors determines in good faith and in consultation with outside legal counsel and an independent financial advisor experienced in such matters that (i) the person is reasonably capable of making a superior proposal (as described below) and that the proposal is, or could reasonably be expected to result in, a superior proposal and (ii) consistent with the exercise of the directors’ fiduciary duties, it would be in AirNet’s best interests to furnish information or participate in discussions regarding such proposal, then AirNet may for a 20 day period:

	•		furnish information about AirNet and its subsidiaries to the person making the proposal, subject to a confidentiality agreement containing terms and conditions no less favorable to AirNet than those contained in AirNet’s confidentiality agreement with AirNet Holdings, and any information provided to the third party must, to the extent not previously provided, be provided to AirNet Holdings no later than the time it is provided to the third party; and
	•		participate in discussions or negotiations with the person making the acquisition proposal.

          AirNet must, within one business day, notify AirNet Acquisition of the receipt of a superior proposal or potential superior proposal, which must include the name of the person making the proposal and its material terms and conditions, and of any subsequent changes to such terms and conditions.

          A “superior proposal” is an unsolicited, written, bona-fide proposal for an alternative acquisition (with the applicable percentages changed from 25% to 75%) that provides for consideration to be received by all, but not less than all, of the holders of the issued and outstanding common shares, which AirNet’s board of directors determines in good faith, after consultation with outside legal counsel and an independent financial advisor experienced in such matters, is reasonably likely to be consummated promptly and would, if consummated, result in a transaction that would be more favorable from a financial point of view to AirNet’s shareholders

than the merger (after taking into account any revisions to the terms and conditions of the merger agreement proposed by AirNet Holdings and the time likely to be required to consummate the superior proposal).

Changes in AirNet’s Recommendation

          AirNet’s board of directors has agreed to recommend that AirNet’s shareholders adopt the merger agreement and to not (i) withhold, withdraw, qualify or modify such recommendation or publicly propose to do so, (ii) cause or permit AirNet to approve, endorse, adopt or recommend any alternative acquisition or publicly propose to do so, or (iii) cause or permit AirNet to enter into any letter of intent, memorandum of understanding, merger agreement or other agreement with respect to an alternative acquisition, other than a confidentiality agreement with respect to a superior proposal or potential superior proposal. AirNet’s board may, however, change its recommendation prior to approval of the merger by AirNet’s shareholders if AirNet receives a superior proposal and AirNet’s board of directors determines in good faith, after consultation with outside legal counsel and an independent financial advisor experienced in such matters, that consistent with the directors’ fiduciary duties under applicable law, it would be prudent and in the best interests of AirNet’s shareholders to withdraw or modify the recommendation that AirNet’s shareholders adopt the merger agreement and approve the merger and approve or recommend a superior proposal or enter into an agreement regarding a superior proposal (a “change of recommendation”). However, the board of directors may not make a change of recommendation unless (i) AirNet provides five business days’ prior written notice to AirNet Holdings of AirNet’s receipt of a superior proposal without violating its non-solicitation obligations under the merger agreement, including the identity of the party making such proposal and its terms and conditions, (ii) advises AirNet Acquisition that the AirNet board intends to make or publicly propose a change of recommendation related to such superior proposal, and (iii) advises AirNet Acquisition that AirNet intends to terminate the merger agreement and pay the applicable termination fee. After receipt of AirNet’s notice of intent to terminate the merger agreement due to a superior proposal, AirNet Acquisition and AirNet Holdings have five business days to propose amendments to the merger agreement to make the merger agreement more favorable to AirNet’s shareholders from a financial point of view than such superior proposal, and AirNet must negotiate with AirNet Holdings and AirNet Acquisition in good faith during such period.

Indemnification and Insurance

          AirNet Holdings and AirNet Acquisition have agreed that AirNet, as the surviving corporation in the merger, will honor all of the obligations of AirNet and its subsidiaries to indemnify the present and former officers and directors of AirNet and its subsidiaries with respect to acts or omissions occurring on or prior to the effective time to the extent such obligations to indemnify exist on the date of the merger agreement throughout the period of all applicable statutes of limitation.

          For a period of at least three years after the effective time, the surviving corporation will maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance, or purchase substantially equivalent policies, with respect to matters arising on or before the effective time of the merger so long as the annual premiums do not exceed

200% of the last annual premium paid by AirNet prior to the execution of the merger agreement, in which case the surviving corporation would be required to purchase as much insurance as reasonably practicable for an amount equal to 200% of the last annual premium paid by AirNet prior to the execution of the merger agreement.

Reasonable Best Efforts

          The merger agreement provides that AirNet Holdings and AirNet will use reasonable best efforts (subject to applicable law) to take all actions and do all things advisable, proper or necessary under the merger agreement and applicable laws to consummate the merger and the other transactions contemplated by the merger agreement as promptly as practicable. Without limitation, this includes taking the appropriate actions to obtain the required governmental and other approvals, including giving notice to the Federal Aviation Administration. In addition, AirNet Holdings and AirNet are each required to cooperate with the other in obtaining, and to use reasonable best efforts to take all lawful steps as are necessary or appropriate to secure, regulatory approvals. More information on the required regulatory approvals and notices is available under the caption “Regulatory Matters.”

Other Covenants and Agreements

          The merger agreement contains other covenants and agreements, including covenants and agreements relating to cooperation between AirNet Holdings and AirNet in the preparation of this proxy statement, public announcements regarding the merger, holding the special meeting of AirNet shareholders to adopt the merger agreement and approve the merger, efforts to render anti-takeover laws inapplicable and notification of the occurrence of certain events, such as suits or proceedings related to the merger or notices from a governmental entity or any other person alleging that consent is required to complete the merger.

Conditions to the Closing of the Merger

          The obligations of AirNet Holdings, AirNet Acquisition and AirNet to complete the merger are subject to the satisfaction of the following conditions:

	•		AirNet’s shareholders have adopted the merger agreement and approved the merger;
	•		no law, judgment, injunction, order or writ enjoining, restraining or otherwise prohibiting the consummation of the merger has been enacted and continues to be in effect; and
	•		any approvals required by the Federal Aviation Administration have been obtained.

          AirNet Holdings’ and AirNet Acquisition’s obligation to close is also conditioned on the satisfaction of the following conditions:

•

the representations and warranties of AirNet contained in Sections 3.2(a) (capitalization), 3.3(a) (corporate authority relative to the merger agreement),

			3.16(a) (title to assets), 3.19 (takeover statutes) and 3.21 (finders and brokers) of the merger agreement shall be true and correct in all material respects as of the date of the merger agreement and the closing date;
	•		the other representations and warranties of AirNet in the merger agreement shall be true and correct (disregarding any limitations as to materiality, material adverse effect or other qualifiers) as of the date of the merger agreement and the closing date (except those representations and warranties that are made as of a particular date), except where the failure of such representations and warranties to be true and correct does not, individually or in the aggregate, have a material adverse effect on AirNet;
	•		AirNet has performed in all material respects all obligations, covenants and agreements required to be performed by AirNet under the merger agreement prior to the effective time;
	•		AirNet has delivered to AirNet Acquisition a certificate of AirNet’s chief executive officer or other senior officer that the conditions in the three immediately preceding bullet points have been satisfied;
	•		since the date of the merger agreement, no facts, circumstances, events, changes, or developments have occurred which, individually or in the aggregate, have had, or could reasonably be expected to have, a material adverse effect on AirNet;
	•		the board of directors of AirNet has not made or resolved to make any change of recommendation, approved or recommended an alternative acquisition proposal or superior proposal or delivered to AirNet Holdings or AirNet Acquisition notice of AirNet’s intent to accept or recommend the acceptance of such proposal and terminate the merger agreement; and
	•		there is no pending or threatened suit, action or proceeding that has a reasonable likelihood of success (i) seeking to restrain or prohibit the consummation of the merger or seeking damages from AirNet, AirNet Holdings or AirNet Acquisition that are material in relation to AirNet and its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership or operation, or to compel disposal or separate holding, by AirNet, AirNet Holdings or any of their respective subsidiaries of a material portion of the business or assets of AirNet, AirNet Holdings or any of their respective subsidiaries; (iii) seeking to prevent AirNet Holdings or any of its subsidiaries from controlling in any material respect the business or operations of AirNet, or (iv) which would otherwise have a material adverse effect on AirNet.

          AirNet’s obligation to close is also conditioned on the satisfaction of the following conditions:

•

the representations and warranties of AirNet Holdings and AirNet Acquisition in the merger agreement shall be true and correct (disregarding any limitations as to

			materiality, material adverse effect or other qualifiers) as of the date of the merger agreement and the closing date (except those representations and warranties that are made as of a particular date), except where the failure of such representations and warranties to be true and correct does not, individually or in the aggregate, have a material adverse effect on AirNet Acquisition;
	•		AirNet Holdings and AirNet Acquisition have performed in all material respects all of their respective obligations, covenants and agreements required to be performed by them under the merger agreement prior to the effective time; and
	•		AirNet Holdings and AirNet Acquisition have delivered to AirNet a certificate of duly authorized officer of AirNet Holdings and the president of AirNet Acquisition that the conditions in the two immediately preceding bullet points have been satisfied.

          Before the closing of the merger, AirNet or AirNet Holdings may each waive (to the extent permitted by law) any of the other conditions to closing of the other party and complete the merger even though one of these conditions has not been met. However, under Ohio law, the approval of AirNet’s shareholders is necessary to close the merger and cannot be waived.

          Neither AirNet on the one hand, nor AirNet Holdings and AirNet Acquisition on the other, may rely on the failure of the satisfaction of a closing condition as a basis for terminating the merger agreement if the failure was caused by its or their breach of any provision of the merger agreement or failure to use reasonable best efforts to consummate the merger.

Termination of the Merger Agreement

     The merger agreement may be terminated and the transactions contemplated thereby abandoned at any time prior to the closing of the merger under the following circumstances:

	•		by mutual written consent of AirNet Holdings and AirNet;
	•		by either AirNet Holdings or AirNet, if:

	o		any governmental entity issues a judgment, order, injunction or decree or has taken any other action permanently restraining, enjoining or otherwise prohibiting consummation of the merger which becomes final and cannot be appealed;
	o		any governmental entity issues an order, judgment, injunction or decree or has taken any other action temporarily restraining, enjoining or otherwise prohibiting consummation of the merger, but only if such order, judgment, injunction or decree has not been dismissed or otherwise vacated within 45 days of its original entry date; or
	o		AirNet’s shareholders do not adopt the merger agreement and approve the merger.

•

by AirNet Holdings, if:

	o		the closing of the merger has not occurred by July 31, 2008, so long as any failure by AirNet Holdings to perform its obligations under the merger agreement has not in any manner proximately caused the failure to close by that date;
	o		AirNet has breached or failed to perform in any material respect any of its representations, warranties, covenants or agreements contained in the merger agreement, which would result in the failure of the closing conditions and AirNet has not cured such breach within 30 days after AirNet Holdings provided notice to AirNet of such breach;
	o		AirNet’s board of directors made or publicly proposed to make a change of recommendation, recommended or approved (or publicly proposed to recommend or approve), failed to recommend against, or took a neutral position with respect to, any alternative acquisition proposal, determined that an alternative acquisition proposal constitutes a superior proposal, resolves to do any of the foregoing, or fails to reaffirm the recommendation to AirNet’s shareholders within three business days after a written request by AirNet Holdings to do so;
	o		AirNet has materially breached its obligations regarding non-solicitation of alternative acquisition proposals or has given AirNet Holdings notice of a superior proposal and AirNet’s intent to accept or recommend the acceptance of such proposal and terminate the merger agreement; or
	o		AirNet’s expenses (both incurred and expected) relating to the transactions contemplated by the merger agreement, including all legal, accounting, financial advisory and other fees, have exceeded an agreed upon budget for such fees.

•

by AirNet, if:

	o		the closing of the merger has not occurred by August 31, 2008, so long as any failure by AirNet to perform its obligations under the merger agreement has not in any manner proximately caused the failure to close by that date;
	o		AirNet Holdings or AirNet Acquisition has breached or failed to perform in any material respect any of its representations, warranties or covenants contained in the merger agreement in any material respect which would result in the failure of the closing conditions and AirNet Holdings and AirNet Acquisition have not cured such breach within 30 days after AirNet provided notice to them of such breach; or
	o		AirNet’s board of directors has authorized AirNet to enter into an agreement with respect to a superior proposal, AirNet Holdings does not

make within the required time an offer the AirNet board determines in good faith is at least as favorable, from a financial point of view, to AirNet’s shareholders as the superior proposal and AirNet pays to AirNet Holdings the termination fee.

Termination Fee

     AirNet will pay AirNet Acquisition a $1,400,000 termination fee if the merger agreement is terminated under the following circumstances:

	•		(i) AirNet receives a bona fide acquisition proposal (or any person publicly announces an intention to do so) after March 31, 2008, but prior to termination of the merger agreement, (ii) the merger agreement is terminated by AirNet Holdings after July 31, 2008 or by AirNet after August 31, 2008, and (iii) within nine months of the termination date, AirNet enters into a letter of intent, memorandum of understanding, merger agreement or other similar agreement with respect to an alternative acquisition or has consummated, approved or otherwise does not oppose an alternative acquisition;
	•		AirNet Holdings terminates the merger agreement because:

	o		AirNet has breached or failed to perform in any material respect any of its representations, warranties, covenants or agreements contained in the merger agreement, which would result in a failure of a condition to closing and AirNet has not cured such breach within 30 days after AirNet Holdings provided AirNet notice of the breach;
	o		AirNet’s board of directors made or publicly proposes to make a change of recommendation, recommended or approved (or publicly proposed to recommend or approve), failed to recommend against, or took a neutral position with respect to, any alternative acquisition proposal, determined that an alternative acquisition proposal constitutes a superior proposal, resolves to do any of the foregoing, or fails to reaffirm the recommendation to AirNet’s shareholders within three business days after a written request by AirNet Holdings to do so;
	o		AirNet has materially breached its obligations regarding the non-solicitation of alternative acquisition proposals or has given AirNet Holdings notice of a superior proposal and AirNet’s intent to accept or recommend the acceptance of such proposal and terminate the merger agreement; or
	o		AirNet’s expenses (both incurred and expected) relating to the transactions contemplated by the merger agreement, including all legal, accounting, financial advisory and other fees, have exceeded an agreed upon budget for such fees.

•

Either AirNet or AirNet Holdings terminates the merger agreement because:

	o		any governmental entity issues a judgment, order, injunction or decree or has taken any other action permanently restraining, enjoining or otherwise prohibiting consummation of the merger which becomes final and cannot be appealed;
	o		any governmental entity issues an order, judgment, injunction or decree or has taken any other action temporarily restraining, enjoining or otherwise prohibiting consummation of the merger, but only if such order, judgment, injunction or decree has not been dismissed or otherwise vacated within 45 days of its original entry; or
	o		AirNet’s shareholders do not adopt the merger agreement and approve the merger (so long as AirNet Holdings votes all of the common shares of AirNet held by it and its subsidiaries in favor of the merger).

•

AirNet terminates the merger agreement because (i) the board of directors of AirNet has authorized AirNet to enter into an agreement with respect to a superior proposal, and (ii) AirNet Holdings does not make, within the time period specified in the merger agreement, an offer that the board of directors of AirNet determines is at least as favorable, from a financial point of view, to AirNet’s shareholders.

          If the merger agreement is terminated under the foregoing circumstances, AirNet will also be obligated to pay all of documented, reasonable out-of-pocket costs, fees and expenses of AirNet Holdings and AirNet Acquisition incurred in connection with the merger agreement and the transactions contemplated thereby prior to the termination date.

Transaction Fees and Expenses

          The parties have agreed that, whether or not the merger is closed, all expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring the expenses. However, as discussed above under the caption “Proposal 1 – The Merger Agreement – Termination Fees,” if the merger agreement is terminated under certain circumstances, AirNet may be obligated to reimburse AirNet Holdings’ and AirNet Acquisition’s documented, reasonable out-of-pocket costs, fees and expenses.

Governing Law

          The merger agreement is governed by the laws of the State of Ohio.

Amendments, Extensions and Waivers of the Merger Agreement

          AirNet Holdings and AirNet have agreed that, subject to applicable law, the merger agreement may be amended by the parties by written agreement executed and delivered by their respective duly authorized officers. The parties have also agreed that, prior to the closing of the

merger, the parties will be allowed to waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant to the merger agreement and waive (to the extent permitted by law) compliance with any of the agreements or conditions contained in the merger agreement.

REGULATORY MATTERS

          The merger agreement provides that AirNet Holdings and AirNet will use reasonable best efforts (subject to applicable law) to take all actions and do all things advisable, proper or necessary under the merger agreement and applicable laws to consummate the merger and the other transactions contemplated by the merger agreement as promptly as practicable. Without limitation, this includes taking the appropriate actions to obtain the required governmental and other approvals, including giving notice to the Federal Aviation Administration. In addition, AirNet Holdings and AirNet are each required to cooperate with the other in obtaining, and to use reasonable best efforts to take all lawful steps as are necessary or appropriate to secure, regulatory approvals.

          Other than the notice filing to the Federal Aviation Administration, AirNet is not aware of any approvals or other regulatory actions required to be taken in connection with the consummation of the merger. AirNet Holdings and AirNet are currently in the process of making the necessary notice filing with the Federal Aviation Administration.

MARKET PRICE OF COMMON SHARES

          AirNet’s common shares are traded on AMEX under the symbol “ANS.” On March 28, 2008, the last trading day prior to the public announcement of the merger agreement, the closing sales price of AirNet’s common shares was $1.45 per share. On May 9, 2008, the last trading day prior to the printing of this proxy statement, the closing sales price of AirNet’s common shares was $2.65. You are urged to obtain current market quotations for AirNet’s common shares.

          AirNet’s common shares traded on the New York Stock Exchange until January 24, 2006. On January 25, 2006, the common shares began trading on AMEX. The following table sets forth the high and low closing sales prices of AirNet’s common shares (a) as reported on AMEX for each quarter during the period from January 1, 2007 through March 31, 2008 and (b) as reported on the New York Stock Exchange for the period from January 1, 2006 through January 24, 2006 and as reported on AMEX for each quarter during the period from January 25, 2006 through December 31, 2006:

          AirNet has not paid any dividends on its common shares.

          The following table furnishes information regarding the beneficial ownership of common shares of AirNet by each person known by AirNet to beneficially own more than 5% of AirNet’s outstanding common shares as of May 1, 2008 (unless otherwise indicated).

presented at the 2008 annual meeting of shareholders must be received by the secretary of AirNet in order to be considered for inclusion in the proxy statement relating to such meeting, and (ii) proposals by shareholders intended to be presented at the 2008 annual meeting of shareholders (but not sought to be included in the proxy statement relating to such meeting) must be received by the secretary of AirNet in order to avoid the individuals acting under proxies solicited by the board of directors having discretionary authority to vote on such proposals without discussion of such proposals in the proxy statement.

WHERE YOU CAN FIND MORE INFORMATION

          AirNet files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that AirNet files with the SEC at its Public Reference Room, 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. You may also call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. AirNet’s SEC filings are also available to the public at the Internet site maintained by the SEC at http://www.sec.gov.

          If you have any questions about this proxy statement, the special meeting or the merger or need assistance with the voting procedures, you should contact our proxy solicitor, Georgeson Inc., toll-free at (877) 484-8195 (banks and brokers may call (212) 440-9800).

          You should only rely on information provided in this proxy statement. No persons have been authorized to give any information or to make any representations other than those contained in this proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. You should not assume that the information contained in this proxy statement is accurate as of any date other than the date of this proxy statement, and the mailing of this proxy statement to shareholders shall not create any implication to the contrary.

Appendix A

AGREEMENT AND PLAN OF MERGER

dated as of

March 31, 2008

Among

AIRNET SYSTEMS, INC.,

AIRNET HOLDINGS, INC.

And

AIRNET ACQUISITION, INC.

TABLE OF CONTENTS

				Page
ARTICLE I		THE MERGER; CLOSING; EFFECTIVE TIME			1
Section 1.1		The Merger			1
Section 1.2		Closing			1
Section 1.3		Effective Time			1
Section 1.4		Articles of Incorporation			2
Section 1.5		Code of Regulations			2
Section 1.6		Directors and Officers			2
Section 1.7		Purchase of Common Shares			2
ARTICLE II		EFFECT OF THE MERGER ON OUTSTANDING SECURITIES; EXCHANGE OF CERTIFICATES			2
Section 2.1		Effect on Outstanding Securities			2
Section 2.2		Surrender and Payment			4
Section 2.3		Adjustment of Per Share Price			5
Section 2.4		Stock Options			6
Section 2.5		Withholding Rights			6
ARTICLE III		REPRESENTATIONS AND WARRANTIES OF THE COMPANY			7
Section 3.1		Qualification, Organization, Subsidiaries, etc.			7
Section 3.2		Capital Stock			8
Section 3.3		Corporate Authority Relative to This Agreement; No Violation			10
Section 3.4		Reports and Financial Statements			11
Section 3.5		Internal Controls and Procedures			12
Section 3.6		No Undisclosed Liabilities			13
Section 3.7		Compliance with Law; Permits			13
Section 3.8		Environmental Laws and Regulations			13
Section 3.9		Employee Benefit Plans			14
Section 3.10		Absence of Certain Changes or Events			17
Section 3.11		Investigations; Litigation			17
Section 3.12		Proxy Statement; Other Information			17
Section 3.13		Taxes			18
Section 3.14		Labor Matters			20
Section 3.15		Intellectual Property			21
Section 3.16		Properties and Assets			21
Section 3.17		Opinion of Financial Advisor			23
Section 3.18		Required Vote of the Company Shareholders			23
Section 3.19		Takeover Statutes			23
Section 3.20		Material Contracts			24
Section 3.21		Finders or Brokers			25
Section 3.22		Insurance			25
Section 3.23		Related Party Transactions			25
Section 3.24		Customers			26

				Page
ARTICLE IV		REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER SUB			26
Section 4.1		Qualification; Organization, Subsidiaries, etc.			26
Section 4.2		Corporate Authority Relative to This Agreement; No Violation			26
Section 4.3		Investigations; Litigation			27
Section 4.4		Proxy Statement; Other Information			28
Section 4.5		Financing			28
Section 4.6		Capitalization of Merger Sub			28
Section 4.7		Ownership of Common Shares			28
Section 4.8		Finders or Brokers			28
ARTICLE V		COVENANTS			28
Section 5.1		Conduct of the Business			28
Section 5.2		Investigation			33
Section 5.3		No Solicitation			33
Section 5.4		Filings; Other Actions			37
Section 5.5		Stock Options and Other Share-Based Awards			38
Section 5.6		Reasonable Best Efforts			39
Section 5.7		Takeover Statute			40
Section 5.8		Public Announcements			40
Section 5.9		Indemnification and Insurance			40
Section 5.10		Notification of Certain Matters			41
Section 5.11		Control of Operations			41
ARTICLE VI		CONDITIONS TO THE MERGER			42
Section 6.1		Conditions to Each Party’s Obligation to Effect the Merger			42
Section 6.2		Conditions to Obligation of the Company to Effect the Merger			42
Section 6.3		Conditions to Obligations of Parent and Merger Sub to Effect the Merger			43
Section 6.4		Frustration of Closing Conditions			44
ARTICLE VII		TERMINATION			44
Section 7.1		Termination and Abandonment			44
Section 7.2		Effect of Termination			46
ARTICLE VIII		MISCELLANEOUS			47
Section 8.1		Survival			47
Section 8.2		Expenses			47
Section 8.3		Notices			47
Section 8.4		Amendments			48
Section 8.5		Waiver of Conditions			48
Section 8.6		Assignment			48
Section 8.7		Governing Law			49
Section 8.8		Entire Agreement			49
Section 8.9		No Third Party Beneficiaries			49

				Page
Section 8.10		Severability			49
Section 8.11		Interpretation			49
Section 8.12		Counterparts			49
Section 8.13		Definitions			49