Media Releases

Proposed Joint Venture Transaction Terminated

Jul 31, 2007

Flight Centre Limited’s (FLT) directors have today received an independent expert’s report from Ernst & Young commissioned by the directors to review the proposed leveraged joint venture with funds advised by Pacific Equity Partners (PEP).

The independent expert concludes that the proposed transaction is neither fair nor reasonable based on an analysis of FLT’s performance for the year to June 30 2007.

The independent expert considers that the appropriate value for FLT is in a range of $2.0 to $2.1 billion.

A copy of the independent expert’s report will be released later today.

Costs, and tax considerations in particular, are clearly now a major concern and if the transaction proceeded would, apart from seeing the costs rise to an unacceptable level, prevent the company from returning a sufficient proportion of the cash proceeds to meet the requirements of shareholders. This was always one of the primary aims.

Accordingly, FLT’s founder shareholders, who together control over 50% of FLT’s shares, have advised the company that they no longer support the transaction (on the terms proposed), and have formed a final intention to vote against any resolution to approve the transaction that would have been put to them at the proposed EGM of FLT.

FLT chairman Bruce Brown said: “While the creation of a leveraged joint venture had the potential to deliver significant benefits to FLT and its shareholders, it was also a highly complex and costly transaction, and the value proposition has become considerably less attractive for shareholders as a clearer picture of the costs of the transaction has emerged.”

FLT’s directors will now investigate alternative capital management strategies.

The company has formally terminated the Implementation Deed it entered into on June 21 2007 on the basis that a condition precedent to the transaction is no longer reasonably capable of being satisfied as a result of the founders’ position.

Restructure and Sale Documents Signed

Jul 2, 2007

On June 30, Flight Centre Limited (FLT) formally entered into agreements to give effect to the key restructure and sale obligations under the Implementation Deed announced on June 21, 2007.

Completion of the transactions remains subject to satisfaction of a number of conditions, including approval by FLT shareholders at a meeting that is expected to be held at the end of August 2007.

FLT will inform the market of all material developments as it works with Pacific Equity Partners toward satisfaction of conditions and completion.