$200 Million Investment in QantasLink Fleet

SYDNEY, 13 January 2005

Qantas said today that it would acquire seven new turboprop Bombardier Q400 aircraft, and take options and purchase rights over an additional 10 aircraft, for use by QantasLink on regional routes.

Executive General Manager Regional Airlines, Narendra Kumar, said the new aircraft would be delivered in the first half of 2006.

"This investment marks a new era in regional air travel, with the Bombardier Q400 featuring improved passenger comfort, jet-like speed and lower operating costs," Mr Kumar said.

"The 72-seat Bombardier Q400 also delivers a 44 per cent increase in capacity over QantasLink's existing fleet of 50-seat Dash 8-Q300s.

"These new aircraft will allow QantasLink to grow capacity efficiently on key regional routes while maintaining frequency," he said.

"For example, the larger Bombardier Q400 can replace Dash 8-Q300s on certain routes and the displaced Dash 8-Q300s can replace smaller 36 seat Dash 8-100s and 200s."

Mr Kumar said this substantial investment in the regional fleet would continue Qantas' support for growth in regional Australia.

He said the seven new aircraft would cost about A$200 million, the largest single investment Qantas had ever made in its regional turboprop fleet. Last year, the airline acquired seven new Dash 8-Q300 aircraft for more than A$100 million.

"The Bombardier Q400 also offers improved operational efficiency. It is a new aircraft with new engine and propeller systems. It can also fly at 360 knots, allowing it to reduce flight times and potentially operate additional frequencies on some sectors."

Mr Kumar said QantasLink would exercise the available options and rights over the additional 10 aircraft only if market conditions improved and the airline continued to achieve efficiency and productivity gains.

He said the Bombardier Q Series/Dash 8 was a reliable and comfortable aircraft and a key part of the QantasLink regional fleet. QantasLink currently operates 16 Dash 8-Q300s and 18 Dash 8-100s and 200s.

QantasLink offers more than 2,000 flights each week, serving 49 destinations throughout Australia and employing more than 1,000 people.

Issued by Qantas Corporate Communication (3199)