1. QANTAS Airways Limited Airline Update - AGIFORS 2002 Andrew Fuccilli Manager Network Operations Systems

2. Against worldwide aviation trend, QF required to expand rapidly to cater for demand in Australian market Australian Market Traditionally 2 airline dominated - Qantas (QF) & Ansett (AN) Beginning 2001 - QF & AN plus Virgin Blue & Impulse fierce price war ($33 fares SYD-MEL) QF domestic profit for 00-01 halved - first drop in overall profit since privatisation June 2001 - Impulse acquired by QF Sept 13 2001 - AN ceased operations (unrelated to Sept 11) QF carried 50,000 AN pax free + 65,000 at discounted rates Impact of Sept 11 on QF International operations allowed aircraft to be reassigned to domestic operations Massive fleet expansion required –Nov 2000 QF announced purchase of A330 & A380 –Able to acquire 8 B737-800 aircraft originally intended for American Airlines (another 7 to be delivered this year) QF now holds 85% of Australian domestic market

3. B747-438-25 B747-338-6 (to be refurbished) B747-238B-4 (to be retired) B767-338ER-29 B767-238ER-7 B737-476-22 B737-376-17 B737-800-7 B717-200-8 ---------------------------------------------------------- Total125 New 747-400ER planned for Nov 2002 More single class B717-200 Current Core Fleet (as at May 2002) QantasLink Regional Operation 5 wholly-owned subsidiary carriers operating regional routes within Australia 65 aircraft (BAE 146, Dash 8, Shorts SD360, Beechcraft 1900D)

4. Low-cost carrier targeting Asian market Operating on routes not profitable for QF Low-cost only from an operating perspective - lower cost-base than QF Full service 2 class airline Initially 4 767-300 aircraft with plans to expand to 12 Australian Airlines Introduction Other Initiatives Move to Amadeus (following British Airways) CityFlyer Services (SYD-MEL & SYD-BNE) –dedicated gates, aircraft, check-in –focus on punctuality for business travellers Introduction of sleeper seats in business class for International operations SMS Flight Delay service New IT Strategic direction

5. Disruption Management Why Am I at AGIFORS? NOT because it is in Rome and my family is of Italian origin! Flight Dispatch Operational Message Processing