Air New Zealand Stock Exchange Announcement 7 September 2001

The following has been sent to the New Zealand Stock Exchange by the Board of Air New Zealand:

Following yesterday's meeting of the Air New Zealand Board, the Board has asked its advisers to submit a commercial refinancing package and they will be having discussions with the major shareholders and the New Zealand Government and reporting back at the beginning of next week.

At yesterday's Board meeting, following the Company's announcement earlier in the day, Singapore Airlines' representatives advised the Company that in the present circumstances, Singapore Airlines could not commit to a price of $1.31 per share. However, Singapore Airlines is looking forward to a business plan and a commercial proposal for the Company that would form a sound basis for Singapore Airlines to provide support. The pricing of any equity issued as part of the financial support under discussion remains to be resolved in that context.

In the months since Air New Zealand began discussions with the Government at the beginning of June, competition in the Australian domestic market has continued to be intense not only from Qantas as the dominant airline in that market, but also at the low cost end of the market from Virgin Blue. The level of competition in recent months resulted in the financial demise of Impulse Airlines prior to its acquisition by Qantas and more recently the liquidation of Queensland regional airline, Flight West. There has been considerable public comment on the impact competition has had and continues to have on Ansett's profitability. Losses in Ansett currently amount to approximately A$1.3 million per day at an Earnings Before Interest and Tax level.

As previously advised, Air New Zealand will on 13 September release its preliminary results announcement. The carrying value of Ansett in Air New Zealand's balance sheet remains under discussion with the Company's auditors.