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Kiwijet Airline Announces Planned Changes


September 10, 2007 Christchurch, New Zealand:

Due to the rapidly changing domestic airline landscape, the Kiwijet Airline Company Limited would like to announce the following changes to our planned services:

After a sixty day detailed analysis we have elected to scrub plans to operate the EMBRAER (ERJ) 145/LR jet for the following reasons.

First, the EMBRAER 145 LR Regional jet is an excellent aircraft, however, out of the 429 LR versions of the aircraft in service worldwide we could not identify any suitable aircraft that would be available at the time we expected to launch operations. In fact, we were only able to secure just 3 aircraft, none of which were of the LR version. The ERJ 145/LR is the only variant of the (ERJ) family of aircraft that is capable of operating into the regional New Zealand airports.

Secondly, we felt that the aircraft would be extremely difficult and costly to maintain and certify in New Zealand since there are only 7 examples operating in the entire Asia Pacific region. We felt that the infrastructure was just not in place to support the aircraft without a significant investment in maintenance and engineering as well crew training facilities. With only a 50 seat aircraft we felt that the national carrier would go all out to drive us out of business with a prolonged price war. We would like to thank the Embraer Aircraft Company for their efforts in this endeavor.

As a result of this development we have now turned our attention to the British Aerospace AVRO RJ-100 Regional Jet for our plan C.
This versatile 4 engine 100 passenger jet is the logical choice to operate into nearly all of the commercial airports in New Zealand.
By virtue of its short take off and landing abilities a whole new range of direct point to point services can be explored with jet service.

We are planning to keep the base of operations as is in Christchurch with an initial fleet of 4 aircraft serving the cities of Auckland, Christchurch, Hamilton, Invercargill, Nelson and Palmerston North on daily basis from late November 2008. (Estimated)

Our team will be traveling to the UK to discuss, review and inspect the 4 aircraft with BAE Systems before the end of the month. We are quite satisfied that BAE Systems can deliver a turn key offering that will include a complete support package including aircraft maintenance and flight crew training. Comprehensive engineering and overhaul facilities are available in Australia that currently support the BAE 146-200 an earlier version of the aircraft.

The AVRO RJ-100 is an updated version of the BAE 146-200 with 51 operators and 268 aircraft in service worldwide including the RAF Royal Flight for Her Royal Highness Queen Elizabeth II. In Australia BAE Systems maintains a regional office in Sydney and for that reason we feel extremely confident with their commitment to support the aircraft in the region. These aircraft can easily be approved by the NZCAA for certification in short order since the BAE 146-200 had been previously certified in the country when it was operated by Ansett NZ and the differences are just documentation issues.

These versatile aircraft are well suited for the challenging climate of the country. It has the ability of operating in near zero visibility conditions such as fog with Category 3 (CAT III) capabilities that will greatly reduce the chance of being diverted to another airport because of adverse weather conditions.

With 100 seats we will be able to offer a full service low cost product to a wide range of guests and bring low fare all jet service to all of the regions for the first time. The AVRO RJ-100 features all the comforts of a narrowbody jet airliner with 2 lavatories. We will be offering 5 across seating with 31 inch seat pitch and large overhead lockers you will get all of this without having to open your wallet while onboard ever including free wine and beer.

As a result of the change we have restructured our capital investment requirement to 35 Million US dollars. Our equity group has required due diligence be complete no later than December 01, 2007 at that time we will confirm our capitalization to the public.

Meanwhile, the last six months have been very exiting to watch play out in New Zealand’s airline industry with the announcement of Pacific Blue’s entry into the domestic market, and the national airline’s best financial results in a decade of which a large part was contributable to domestic operations. This reality just verified that our analysis has been correct and these events have kept our investors onboard despite the global credit crisis.

Our sales and marketing will stand alone by way of the Optymise internet marketing tool coupled with the Radixx online booking suite. The national carrier achieved a whopping 44% market share of internet bookings in New Zealand this year alone. We plan to fully take advantage of the internet and its full potential. All airlines have a web site but the trick is to drive guests to the site with a powerful search marketing tool that was developed by Optymise in New Zealand. We have been astounded by what this technology can do for us or any company for that matter.

We have made our intentions clear to both Australian carriers over the past month as to our plans. Typically start-up carriers do not interline with other airlines from the onset of operations however we feel that our offering can provide a seamless jet to jet product that the national carrier can not offer. Our planned services add value to potential partner’s offerings including global alliances.

Nine out Ten people will choose a jet over a turboprop if they had a choice no matter how new the turboprop is. Kiwijet is all about the future of New Zealand’s air transportation infrastructure. When a new entrant starts operations it always stimulates economic growth in all sectors of the national economy. We believe that New Zealand is poised to become an economic powerhouse in the region over the next ten years and we want to be here to see it become a reality.

We have received thousands of letters of support from New Zealanders thank you, and we would look forward to the day when all kiwis will fly.
A follow on media release will be forthcoming within the next 2 weeks to showcase the AVRO RJ-100 (ARJ) to the media.

ENDS

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