Air New Zealand's Chief Executive and Managing Director, Ralph Norris, said that Air New Zealand will closely review the Commerce Commission's decision to determine the most appropriate course of action for Air New Zealand. The Company will then have discussions with Qantas before confirming its course of action.

"The NZCC determination requires careful consideration before we are in a position to make an informed decision on whether to proceed with appeals in both jurisdictions," Mr Norris said.

Mr Norris said he was extremely disappointed that the level of information Air New Zealand had provided the NZCC and the weight of fact and evidence from internationally renowned economists and aviation industry experts had counted for little.

"It is particularly disappointing that competition regulators continue to stare into the rear vision mirror and ignore the significant structural challenges facing airlines all around the world. The alliance offered the opportunity to look into the future and provide a platform for sustainable growth as we compete against all-comers in an uneven international environment."

A consequence of today's decision by the NZCC is that the conditional agreement between Virgin Blue and Air New Zealand for terminal access and ground handling facilities is now null and void, as the agreement was conditional upon the NZCC approving the alliance.

Mr Norris said that despite the NZCC's decision and regardless of any appeal, Air New Zealand would have no option but to continue to work very hard to retain its position as the leading airline in the South Pacific, but the job of remaining competitive has just become much harder.

Mr Norris said that a key to the airline remaining competitive in the short-term was driving cost out of the business and focusing on growth.

NOTE: The content of all Air New Zealand media releases are accurate at the time of issue, as stated at the top of each release. For updates on any changes, please contact Air New Zealand.

Air New Zealand is proud to be a member of Star Alliance. The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. Its acceptance by the market has been recognised by numerous awards, including the Air Transport World Market Leadership Award, Best Airline Alliance by both Business Traveller Magazine and Skytrax. The member airlines are: Adria Airways, Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, Blue1, bmi, Continental Airlines, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Turkish Airlines, THAI, United and US Airways. Aegean Airlines, Air India, Brussels Airlines and TAM have been announced as future members. Overall, the Star Alliance network offers 19,500 daily flights to 1,071 airports in 171 countries.

For more information about Air New Zealand visit www.airnewzealand.com and for more information about Star Alliance visit www.staralliance.com.