QantasLink Response to High Fuel Costs

Sydney, 17 June 2008

The Qantas Group today announced additional capacity and network changes, focusing on QantasLink's regional operations in New South Wales and Victoria.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the changes followed similar measures already announced for Qantas and Jetstar's domestic and international operations over the past fortnight due to unprecedented increases in oil prices.

He said the changes were:
- the accelerated retirement of QantasLink's six remaining Dash 8 100 36-seat aircraft by August 2008;
- the closure of QantasLink's Mildura maintenance base on 15 August 2008;
- exiting the loss-making Melbourne-Wollongong route from 18 July 2008; and
- the permanent withdrawal from previously suspended QantasLink services between Newcastle and both Melbourne and Sydney.

Mr Dixon said the retirement of the older Dash 8 100 series aircraft would result in the closure of the maintenance base in Mildura.

"We will work closely with the affected staff in Mildura to minimise redundancies by offering alternative job opportunities at other QantasLink locations," he said.

Mr Dixon said the Melbourne-Wollongong services had been underperforming for some time, and record fuel prices now made it difficult for QantasLink to continue to operate the older Dash 8 aircraft on the route.

In the case of Newcastle, the Qantas Group will remain the largest operator through Jetstar's 56 services a week to and from Melbourne, Brisbane and the Gold Coast.

QantasLink's affiliate partner, Aeropelican, also currently offers up to eight services a day between Sydney and Newcastle.

Mr Dixon said QantasLink would maintain its existing flight operations, cabin and ground crew bases in Melbourne and Mildura to service its remaining network in Victoria, which included services between Melbourne and Mildura, Devonport, Launceston and Canberra.

Issued by Qantas Corporate Communication (3774)