Air New Zealand's statement to the NZ Stock Exchange

10.30 am

TEXT OF THIS MORNING'S ANNOUNCMENT TO STOCK EXCHANGE

The Chairman of Air New Zealand Limited, Sir Selwyn Cushing, says approximately 95% of the 132,000 booked to travel on Ansett Australia flights between Thursday and Sunday were carried on aircraft provided by
Ansett and Air New Zealand despite the grounding of 10 x Ansett B767 aircraft on Thursday evening.

The grounding affected 20% of Ansett's total passenger capacity. It was quickly replaced by aircraft leased from Air New Zealand, Singapore Airlines, Qantas, Air Canada, Emirates and Impulse.

This has meant that throughout Easter almost all of Ansett's passengers have reached their destinations, with most delays lasting less than one hour and
many passengers arriving on schedule.

Although there will inevitably be short term cost and revenue impacts in relation to the Easter period, claims in the Australian media that costs of the disruption are running at A$2-5 million per day are mere speculation and are not based on figures provided by the company. It is still too soon to estimate reliably the daily costs being incurred by the disruption to services, but those costs are not expected to reach the lower end of the range suggested. Costs have been minimised by prompt action at all levels
throughout the Air New Zealand - Ansett organisation.

The Group's focus for the immediate future is to co-operate with CASA's investigation and ensure that aircraft are returned to operation as soon as
possible. Every effort is being made to co-operate with CASA and to satisfy its demands.

Last night, CASA was close to completing its check on the engineering and maintenance documents for each of the 10 grounded B767s and about to commence its physical inspections of the aircraft.

Sir Selwyn expressed confidence that the grounded Ansett Australia B767 aircraft would be cleared for return to operation in the near future, and that the airline's air operator's certificate would be retained. "Ansett has one of the best safety records in world aviation, and the travelling public are clearly supporting the airline," he said.

Although problems had emerged in recent months, these had all been discovered and reported by Ansett itself as new management and improved maintenance processes had begun to show their effectiveness. "It is
disappointing that Ansett's own advices to CASA and the systemic improvement being achieved in the maintenance area have not been sufficient to dissuade CASA from the current public and regulatory spotlight on Ansett's
maintenance," said Sir Selwyn.

"The present situation highlights the importance of fleet renewal plans for Ansett which the Board will consider in the near future," said Sir Selwyn.

"To compete effectively in highly competitive markets requires not only the ongoing dedication of Air New Zealand-Ansett staff to retain the loyalty of our customers, but modern equipment to complement the full service product offered. Apart from resolving CASA's safety concerns, this will be the company's priority in the coming weeks and months," he said.