Air New Zealand Limited

1. Air New Zealand Limited New Zealand Society of Investment Analysts 30 March 2001

2. Agenda • Organisation Changes • Key Issues • Outlook

3. Organisation Changes • Organisation Structure • Performance Enhancement

4. Organisation Structure Business Unit Structure Functional Structure • 4 distinct Airline Business Units, all with individual reporting structures • Focus on cost reduction • Suited Air New Zealand but not the new combined group • Slowed the implementation of key strategies • One airline team split into functional areas - commercial, customer service and operations • Focus on revenue enhancement and the customer • Removal of duplicated activities • Speeds delivery of changes • Support functions largely unchanged

5. A Moroney CFO & SVP Finance NZ L Doolan SVP Corp, Govt & Int Affairs NZ C Tremain SVP HR & Org Change NZ G Frazis SVP Strategy, Network & Marketing Aust Executive Management G Toomey Group President & CEO Ansett International 49% owned A. Miller SVP Sales & Distribution L Grant SVP CustomerService T Jensen SVP Operations B Fitzgerald SVP Worldwide Airport Svces NZ Aust Aust Aust Aust B Jacobson SVPANNZES NZ TBA SVP Ventures NZ NZ K Turnbull SVP Business Performance Enhancement Airline Functions NZ Support Functions

6. Integration to Performance Enhancement Integration Synergies Performance Enhancement • Focused on integrating Ansett/Air New Zealand • Key emphasis on removing duplicated activities • Systems/procurement synergies • All encompassing profit enhancement program • Not only integration benefits • Productivity benefits • Business process improvements • Enhancement of other revenues • Disciplined approach to costs

7. Key Issues Facing the Group • Australian Domestic Market • Fleet & Network • Management Information

8. Market Share Versus Capacity Share (Australian Domestic Market) 58% QF RPK 56% QF ASK 54% 52% 50% 48% 46% 44% AN ASK AN RPK 42% 40% Jul 94 Jul 95 Jul 96 Jul 97 Jul 98 Jul 99 Jul 00 Mar 95 Mar 96 Mar 97 Mar 98 Mar 99 Mar 00 Nov 94 Nov 95 Nov 96 Nov 97 Nov 98 Nov 99 Australian Domestic MarketCapacity Share V Market Share

9. Australian Domestic MarketAddressing Capacity Share • In order to keep pace with market growth and competitors, need to introduce additional capacity on the key routes in Australia • In July, 4 additional 767-300 (wide bodies) will commence services on the Golden Triangle (SYD-MEL-BNE) • This will increase capacity of Ansett’s domestic trunk network by approximately 10%

10. Australian Domestic MarketCorporate Market • Until June last year, Ansett had been loosing corporate accounts • Was not competing on price • Did not have the international network offering of competitor • Impulse has also impacted Ansett’s share of SME business • However, since June 2000 this trend has stabilised and recent months have shown a positive win-loss ratio • Key accounts have been retained and new accounts have been won • Some yield decline due to competitive pressures • International network provided by NZ, AN international and SQ

11. Fleet Renewal • Fleet changes will be the product of a revised network strategy and subject to balance sheet constraints Short term • Lease aircraft to meet capacity demand (e.g. 767-300’s) Long term • Reduction of the number of aircraft types across the group • Increased number of wide bodied aircraft • Rejuvenation of the Ansett fleet • Standardised product

12. Network Changes • AN Int growth on key business markets ex-Australia are Tokyo, Hong Kong, Los Angeles and London • Ansett currently services Osaka instead of Tokyo • Standardise product on Hong Kong route • SYD-LAX services expected to begin in early 2002 • AN Domestic network being reviewed • Refinement of NZ International services • Protection of position in NZ Domestic

13. Management Information Improvements • Currently, Air New Zealand systems are adequate however Ansett systems are poor. This has lead to: • Lack of management information to understand what is driving the business • Many different systems being used and no central store of data • Inability to forecast accurately • Short term solution • Have implemented a series of “band-aid” solutions to gain a better understanding of the business and provide information for strategic planning • Long term solution • Single system with uniform data across the group • Additional analytical tools

14. Outlook

15. Pressure on Profitability Will Continue • Second half performance will remain poor • Substantial operating loss for full year • Traditionally a weaker half • Competition and discounting has intensified in Australia • Foreign exchange remains low year on year • Slowing Australian economy • Some relief from fuel prices • Longer term • Strategic plan for next 3 years to be finalised in July • Capital management / structure to be addressed • Business plans will take some time to implement • Future of competition in Australia is uncertain • Better management information will lead to informed decisions

16. Air New Zealand Limited New Zealand Society of Investment Analysts 30 March 2001