Qantas Statement on NZ High Court Decision

SYDNEY, 20 September 2004

Qantas said today that it was disappointed in the New Zealand High Court's decision to reject a proposed equity alliance between Qantas and Air New Zealand.

The Chief Executive Officer of Qantas, Geoff Dixon, said the decision confirmed the New Zealand Commerce Commission's narrow view of competition and consumer interests.

"This outcome ignores both the reality of market-distorting Government ownership and intervention in the global aviation industry and the major structural changes that are occurring around the world," Mr Dixon said.

"The competition provided today by Air New Zealand is only possible because the New Zealand Government invested NZ$885 million of public funds in Air New Zealand in late 2001.

"While this decision is understandable in the context of New Zealand aviation, true market forces were not allowed to operate - a position being repeated almost daily in the aviation industry around the world.

"Today's decision also contrasts with the marked trend toward consolidation in the aviation industry," Mr Dixon said.

"Air France and KLM have been permitted to merge to form the largest airline group in the world.

"British Airways, when it sold its investment in Qantas earlier this month, stated that a prime reason for the sale was to allow it to participate in the inevitable consolidation of the European aviation industry."

Mr Dixon said that although an appeal to the New Zealand Court of Appeal was possible, Qantas would not take this option.

"We need to move on," he said.

Mr Dixon said Qantas would hold talks with Air New Zealand about possible opportunities to work together in areas not at odds with competition law.

Issued by Qantas Corporate Communication (3149)