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Air NZ/Ansett Australia Analysis - Current Info

Fri Sep 07, 2001 6:20 pm

Frontline staff and all other personnel of Ansett Australia and Air New Zealand are asked to use the following information, approved by the Group Chairman, when fielding any enquiries concerning the future of the company or related issues fuelled by current media reports.

· There is a lot of uninformed comment being made about the future of the company.

· Ansett / Air New Zealand are conducting business as usual.

· Our Board and major shareholders are working out plans to raise additional capital needed for the medium and long-term development of Air New Zealand - Ansett Group.

· They are also discussing with the New Zealand and Australian Governments some policy changes that would help with the capital raising.

· The outcome of these discussions will be made known when the Group reports its annual financial results on Thursday 13 September.

· All our normal services are available to intending travellers.

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.