Air Philippines International Corporation

September 29, 1998 PSE CIRCULAR FOR BROKERS NO. 2268-98 SUBJECT : Air Philippines International Corporation In connection with Air Philippines International Corporation's ("AIR") planned acquisition of Air Philippines Corporation ("APC"), attached is a copy of AIR's letter in reply to the Exchange's request for an update of the said plan. For your information. (SGD.) REYNOLD P. ONG Vice-President, Listings and Disclosure Group FAX 636-0809 September 28, 1998 Philippine Stock Exchange PSE Centre, Exchange Road Ortigas Center, Pasig, Metro Manila Attention: Ms . Grace B . de Guia Supervisor, Disclosure Department Ms . Janet J . Alcala Analyst, Disclosure Department Gentlemen : This is in reply to your fax message of September 25, 1998 requesting an update of the status of the acquisition by Air Philippines International Corporation ("APIC") of Air Philippines Corporation ("APC"). prLL Please be advised that the following preparatory activities have been completed: (i) the increase in the authorized capital stock of APIC from P2.0B to P3.5B to accommodate the new APIC shares which will be issued in exchange for APC was approved by the SEC on March 11, 1998; and (ii) the due diligence report undertaken by the external auditors of APIC on the financial statements of APC as of June 30, 1997 has been completed and presented to the APIC Board of Directors at its meeting on April 16, 1998. Currently, we are in the process of: (i) preparing the documents pertaining to the registration under the Revised Securities Act (BP 168) and under the New Disclosure Rules and Regulations of the Securities & Exchange Commission of the increase in the authorized capital stock of APIC covering the portion to be issued in the acquisition of APC; and (ii) simultaneously, preparing the requirements of the Philippine Stock Exchange to support an application for the listing of the shares to be registered with the SEC as aforesaid. We hope that the foregoing satisfies your requirements. Thank you. Yours very truly, AIR PHILIPPINES INTERNATIONAL CORPORATION By: (SGD.) ARTHUR R. PONSARAN Corporate Secretary