Kiwijet: Seasons Greetings

Kiwijet: Seasons Greetings

December 17, 2007 Christchurch, New Zealand: Seasons Greetings from Patrick Weil, Chief Executive Officer:

As 2007 comes to a close, Kiwijet has just celebrated its first year of incorporation, and boy what a year it has been! I am delighted to report that we are on track to launching Kiwijet in late 2008; despite many obstacles mostly due to the surge in the global oil market and the economic downturn in both the US and Japan from where our principle investors are based. We will announce our capitalization and intended launch date on February 01, 2008 after completion of multi faceted due diligence and a future market forecast with detailed fourth quarter market and extensive currency analysis. We will determine whether we can proceed as planned or defer our options based on the forecast and global economic outlook for 2008.

We are currently engaged in expanding our investment capital from new players in Australia and the United Arab Emirates as investor groups and airlines from both countries have expressed an interest in Kiwijet which may include a limited transtasman cooperative services agreement.

In February we plan to open our new head office in Christchurch with an initial staff of 8 full time team members, and begin hiring staff to launch the airline in late 2008 with a planned staff of 200 cross trained team members. If full funding of 35 million US dollars is approved at the end of January.

On an extremely serious note it has been revealed that the national airline has been engaged in acquiring all the available airport space in the regional centres that we plan to serve. Case in point the national carrier has attempted to lease the former Origin Pacific Airways terminal in Nelson making claims that it needs more space for its operations, as well as terminal and airport facilities in all the cities that we plan to serve. These actions just prove beyond doubt that the national carrier is bent on maintaining a complete monopoly on the regional routes and close the door on any newcomer.

The spoiled child behavior by the national airline doesn’t stop at the regional airports; it includes the country’s largest Auckland International. The national carrier is crying foul about the airport’s fast track plans to invest US $ 137.5 million in time for the 2011 rugby world cup. Again it is my opinion that the national carrier is afraid of competition on a much larger scale that would come if the airport expands. Airport expansion just drives growth in New Zealand’s economy and it’s gateway to the world. This is just another example of how childish the mindset is at the national carrier.

These actions violate the Fair Trade act by locking out potential competition from Kiwijet or other airlines planning domestic services. If this is allowed to take place it will have a devastating impact on the consumer. New Zealanders and visitors alike in the regional markets will pay the price for the low yielding trunk routes with increased competition from Pacific Blue. It’s important to remember that the national carrier generates nearly forty percent of its revenue from the regions that pay the price for increased competition on the trunk routes. They will go to all lengths to shut out Kiwijet, and others from entering these markets and holding the consumer hostage by engaging in dirty tricks like this. We can assure the national carrier that we will take legal action if we are locked of any market. Our legal consul has prepared a brief citing anti competitive practices as outlined in part two of the commerce act. We will present these facts to the commerce commission and take immediate action against the national carrier to prevent a total monopoly. The commerce act is extremely clear in this regard to fair trade. We insist that the government uphold the act and not obstruct competition.

Hopefully 2008 will see a change in the New Zealand government that is pro business and will force the national carrier to return to the private sector and force it to compete without a government handout or collusion. It is my opinion that the national carrier will reattempt to engage the national Australian airline with a broad ranging code share pact as it had previously planned until the former Australian government pulled the plug on it. At that time such an alliance would have dominated the entire Transpacific and Transtasman marketplace. In just the span of one year increased competition has come fast and furiously by way of Virgin/Pacific Blue and Emirates for example. I was reminded recently that the Australian and New Zealand national airlines have had a relationship for nearly 80 years and a new government in Australia we believe will be one of protectionism for its national carrier and will move to protect its dominance in the marketplace by allowing such a code share to go through . We can only hope that a new government on this side of the ditch will prevent such an agreement from going forward. A code share of this nature will drive up the cost and reduce the range of services across the Tasman and for that matter the regions as well by limiting the range of available flights domestically.

On January 22, 2008, I will be a keynote speaker at the 5th Annual Asia Pacific Low Cost Airlines Congress in Singapore. Please visit http://www.terrapinn.com/2008/lca for a complete programme of the event. During my 30 minute address I will detail Kiwijet’s position and capitalization developments with perhaps a special announcement regarding a cooperative agreement between Kiwijet and a low cost carrier in the region.

The development of Kiwijet thus far has been challenging but rewarding during 2007. We have seen a revolution in the domestic market with the entry of Pacific Blue and new players such as Ozjet entering the Transtasman as well. These are good trends but much work still needs be done before for the regional markets enjoy low cost all jet service that the trunk markets have now. I have chosen this endeavor not because it is easy but because it’s necessary and with a little luck by this time next year Kiwijet’s black, green and white aircraft will be a familiar sight in New Zealand’s skies.

I would like to wish all New Zealanders a Merry Christmas and most joyful New Year and I will not rest until all kiwis will fly.

ENDS

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