Issued 11 August 2003

The Commerce Commission will commence a six day conference next week on its draft determinations relating to the application by Air New Zealand Limited and Qantas Airways Limited for authorisation to enter into a strategic alliance and the application by Qantas Airways to subscribe for up to 22.5% of the voting equity in Air New Zealand.

The conference will be held from Monday 18 to Friday 22 August, and Monday 25 August, in the ground floor conference room of the NGC Building, 44-52 The Terrace, Wellington.

In April, the Commission released its draft determinations that on the basis of the information available, it would be likely to decline applications by both airlines for authorisation under the Commerce Act. The Commission considered that an alliance between Air New Zealand and Qantas Airways Limited would not result in a net public benefit to New Zealanders.

Interested parties were asked to make submissions and cross-submissions on the draft determination. The conference is a process where parties can present their submissions orally, and the Commission can ask questions based on those submissions.

The Commission will release its final determination on the applications as soon as practicable after the conference.

Attached is a copy of the conference programme.

Media must confirm their attendance with Jackie Maitland, Communications Manager,

(04) 924-3708 or jackie.maitland@comcom.govt.nz no later than 5pm this Wednesday 13 August.

Information relating to the applications, including the Commission's draft determinations and submissions from interested parties, is available on its website at www.comcom.govt.nz.

Conference Agenda

18 - 25 August 2003

Ground Floor, NGC Building, 44 The Terrace, Wellington

Commissioners: Ms Paula Rebstock (Acting Chair)

Mr Peter Taylor

Ms Denese Bates (QC)

Mr Donal Curtin

Please note:

· Time has been allocated to parties based on initial presentation requests, the Commission's requirements for questions of each party and the constraints of the Conference schedule.

· This agenda is as accurate as possible, based on the information provided to the Commission by parties presenting at the conference.

· Times will be adhered to as closely as possible. However, the Commission notes the possibility of some variation. The Chair will confirm changes to timing as the conference progresses.

· The Applicants have identified four confidential sessions which are highlighted in bold.

· Morning and afternoon tea will be taken at appropriate breaks in sessions.

· All parties are asked to contact Commission staff immediately if their timing or equipment requirements change.

Monday 18 August 2003

10.00 am

Start

10.15 am

Chair - opening remarks

10.30 am

Applicants

Opening/Review of Air NZ and Qantas Position - Ralph Norris/Geoff Dixon

11.45 am

Airline Model - Doctor Michael Tretheway

12.30 pm

Lunch

1.30 pm

VBA Entry and Expansion - Airline Representatives/David Bental (APG)

3.00 pm

Impact of VBA Entry - Dr Clifford Winston

4.00 pm

The Counterfactual, Discussion of Qantas Expansion - Qantas Representatives/David Bental (APG)

5.00 pm

The Counterfactual, Qantas Confidential Session - Qantas Representatives/APG

6.00 pm

Engineering & Maintenance, Qantas Confidential Session - Qantas Representatives

7.00 pm

End

Tuesday 19 August 2003

9.00 am

Applicants

VBA Entry and Expansion, The VBA Model in Europe & Australasia - Ray Webster (CEO, easyjet).

9.30 am

Competitive effects in the Travel Distribution Market - Airline Representatives

10.00 am

Effect of 5th Freedom Competition - Airline Representatives

10.45 am

The Confidential Counterfactual, Air NZ Confidential Session - Air NZ Representatives/Eric Lucas (PWC)

12.15 pm

Lunch

1.15 pm

Implications of the Confidential Counterfactual for Tourism, Qantas/Air NZ Confidential session - Henry Ergas (NECG)/Airline Representatives/Others

1.45 pm

Aviation condition and International analysis of Airline Mergers - Professor Willig/Margaret Guerin-Calvert

3.30 pm

Tourism Benefits of the Alliance - Airline Representatives/NECG

5.00 pm

Quantification of Public Benefit of Additional Tourists - Henry Ergas/Others

6.00 pm

End

Wednesday 20 August 2003

9.00 am

Applicants

Competitive Effects in Freight Markets - Airline Representatives/NEC

9.30 am

Introduction to Economic Arguments - Henry Ergas

10.30 am

Allocative Efficiency Detriments - Henry Ergas/Professor Willig

12.15 pm

Lunch

1.15 pm

Review of Economic Models

2.45 pm

Productive and Dynamic efficiencies - Henry Ergas/Margaret Guerin-Calvert

4.00 pm

Cost Savings - Henry Ergas

4.30 pm

Scheduling and new Direct Flights - Henry Ergas/Margaret Guerin-Calvert

5.30 pm

Balancing - Henry Ergas

6.00 pm

End

Thursday 21 August 2003

9.00am

Virgin Blue

David Huttner (Head of Commercial)/Counsel (Simpson Grierson)

12.00 pm

Lunch

1.00 pm

Infratil et al

Representatives of Infratil et al/Grant David (Chapman Tripp)/LECG representatives/Professor Hausman

6.00 pm

End

Friday 22 August 2003

9.00 am

Gullivers Pacific

Ralph Lattimore/Simon Hope/Andrew Bagnall/Tim Hazeldine/Kathy O'Connor

10.30 am

Origin Pacific

Tony Marks/Robert Inglis

11.30 am

Bon Voyage

Gerard Murphy

12.00 pm

Christchurch Airport

George Bellew/Tom Weston QC

12.30 pm

Lunch

1.30 pm

Invercargill Airport

John Walsh (General Manager)/Norman McFarlane

2.00 pm

Polynesian Airlines

John Fitzgerald/Norman McFarlane

2.30 pm

Travel Agents Association

Peter Lowry/Andy Marshall

3.00 pm

CTU and EPMU

Tony Wilton (CTU)/Andrew Little (EPMU)

3.30 pm

Consumers Institute

David Russell/Paul Doocey

4.00 pm

Jumpjet Airlines

Nick Kile/John Cook/Chris Scanlan

4.30 pm

Save Air NZ

Ian Prior (Convenor)/Robin Halliday (Executive Officer)

5.00 pm

End

Monday 25 August 2003

10.00 am

Applicants

Right of reply - John Palmer/Henry Ergas/Margaret Guerin-Calvert

11.30 am

Chair's closing

11.35 am

End