On February 14, Qantas announced the formal termination of its Strategic Alliance Agreement and Tasman Networks Agreement with Air New Zealand. This follows the negative draft determination of the Tasman Networks Agreement by the Australian Competition and Consumer Commission in November 2006.

In connection with the termination of the Agreements, all of the Convertible Notes issued by Air New Zealand to Qantas in 2002 will be converted into 44,152,695 new ordinary shares in the airline. This is equivalent to approximately 4.2 per cent of Air New Zealand's ordinary shares on issue.

The conversion took place on February 14, 2007.