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Qantas Statement

Sydney, 15 March 2007

There has been substantial media commentary concerning the current outlook for Qantas. Qantas has also received questions from certain investors on this issue in view of the offer which has been made for Qantas by Airline Partners Australia. In response to these matters Qantas provides the following information to the market.

Outlook for 2007 full year result

As part of the release of its interim results on 8 February, Qantas provided outlook earnings guidance to the market. It anticipated that the full year result for 2007 would be around 30 to 40 per cent higher than last year's result. Qantas today confirms that the full year result is likely to be towards the upper end of this range. This expectation is based on continuing strong demand and yields offsetting cost reduction targets which have not been fully realised in the Engineering and Airport Divisions.

Response to market speculation regarding outlook for 2008

Qantas is aware that there is a broad range of analyst PBT estimates for the year ended 30 June 2008 ranging from approximately $975m to approximately $1.5bn with an average of approximately $1.23bn.

In response to market speculation and queries received from investors, Qantas confirms its outlook expectations for 2008 are in line with average analyst consensus PBT estimates of approximately $1.23bn. Qantas notes that it is yet to assess the impact of, or include any provision in its estimates at this time, in relation to the following:

* The recently announced intention of Tiger Airways to commence services in Australia from late 2007, Virgin Blue's deployment of additional capacity through new Embraer jet aircraft and plans underway for the Qantas Group to secure additional aircraft to meet the new competition and to sustain its market share position within Australia. These developments are likely to have a negative financial impact on Qantas in 2008. Until we know more about pricing, capacity and schedules, we are not in a position to quantify this impact.

* Contingent liabilities relating to Qantas' involvement in alleged price fixing in the air cargo market and other contingent liabilities referred to in the interim results released on 8 February 2007. Qantas does not believe it is possible to quantify any direct or indirect liabilities associated with these matters at this time, but it is possible that they may be significant.

Just as for the 2007 full year outlook, Qantas' 2008 outlook is subject to fuel costs not increasing significantly, demand continuing to grow and the continued success of the Sustainable Future Program in achieving cost savings.

Qantas has now hedged fifty percent of anticipated crude oil requirements for the 2008 financial year at a worst case rate of $US69.64 a barrel for West Texas Intermediate crude (WTI), inclusive of option premium.

Qantas still has $13bn in projected capital expenditure over the next 5 years (from financial year 2008 to financial year 2012 inclusive).

Qantas does not make any forecast of any specific results. Investors should also note that there are many factors that may affect the future performance of Qantas which may be outside the control of Qantas and may not be capable of being foreseen or accurately predicted. Accordingly, actual results particularly in relation to hedge accounting may vary.

Issued by Qantas Corporate Communication (3546)
Email: qantasmedia@qantas.com.au