Like many, I have been following reports that Virgin are...

Like many, I have been following reports that Virgin are reviewing all supplier contracts as part of a strategic review to address structural challenges they face. This article and commentary by Paul Scurrah does raise concerns that the Wet Lease Agreement with Virgin may be at risk:

Virgin Australia Route Review Likely Casualties .

In response to these concerns Lee Schofield has provided the following commentary:

Thecompany view is that the review being undertaken by Virgin Australia is onethat can actually benefit Alliance. This may sound counter-intuitive tothe recent announcements and news media surrounding Virgin however thefollowing should also be taken into consideration:

- As you note below we have a long term contract to provide aminimum number of wet lease hours per year until the end of 2021

- Virgin’s review may open up further opportunities for Alliancee.g. where 737 aircraft are currently operating with excess capacity onregional routes and a Fokker 100 may be the more suitable aircraft

- Virgin can access smaller capacity Alliance aircraft to commencenew routes – if the routes then require more capacity Virgin can swap in their737 fleet

This topic as well asothers will be addressed at our AGM which is on the 30^th Octoberhere in Brisbane.