ANNOUNCEMENT ON QANTAS AND AIR NEW ZEALAND

Recently, Qantas had exploratory discussions with Singapore Airlines (SIA) at management level on the idea of Qantas buying SIA’s stake in Air New Zealand.

Qantas’ plan is to acquire substantive ownership of Air New Zealand by also buying Brierley Investment Limited’s shareholding in the New Zealand carrier, and for Air New Zealand to sell all of Ansett to SIA.

The proposal is only a concept. In the interests of shareholders, SIA must consider with care the strategic and financial implications of the proposition and weigh it against other options that are available.

Qantas confirms discussions

Qantas Airways Limited today confirmed it had been approached to consider a transaction that would involve Qantas taking a significant stake in Air New Zealand and Air New Zealand selling Ansett and Ansett International to Singapore Airlines.

Following the approach, Qantas had preliminary discussions with the major shareholders in Air New Zealand, Singapore Airlines and Brierley Investments Limited, and also the Chairman of Air New Zealand, Sir Selwyn Cushing.

Qantas Chief Executive Officer Geoff Dixon said Qantas would await further advice or contact from the Board of Air New Zealand and the two major shareholders in Air New Zealand before deciding whether it would take the matter further.

Air New Zealand Statement to Stock Exchange re Qantas Proposal

The following is the text of a statement by Air New Zealand Limited to the New Zealand Stock Exchange:

Air New Zealand's Board advises that it has been approached by Qantas Airways Limited for the development of a transaction which would involve the acquisition by Qantas of a significant shareholding in Air New Zealand from the two major shareholders, namely Brierley Investments Ltd and Singapore Airlines Ltd. The proposal is conceptual and no valuations have been incorporated in the proposal at this stage. It is therefore too early for the Air New Zealand Board to form a view. However, the Board will consider the proposal in the interests of all shareholders and has established an Independent Committee of Directors to consider the proposal as well as other options. The Independent Committee is taking expert advice to assist in its deliberations.