Home / World Business
Tue, Mar 05, 2002 - Page 21 News List

Ansett has to turn in its wings

AIRLINES Australian businessmen Lindsay Fox and Solomon Lew offered A$1.8 billion for a pared-back version of the airline. But one day before the sale deadline, Fox and Lew's Tesna consortium pulled out of the deal

AP , SYDNEY, AUSTRALIA

Ansett flight attendant Tanya Harriss, center, is determined to see Ansett Airlines out with a party as staff gather for a wake in Sydney yesterday. Ansett, once the country's biggest airline, officially ceased operations yesterday.

PHOTO: AFP

Sixty-six years of aviation tradition ended yesterday when iconic Australian airline Ansett took to the skies for the last time.

Hundreds of Ansett workers were gathering at domestic terminals across the country to bid farewell to the carrier, which will take off on its last commercial flight from the Western Australia state city of Perth yesterday.

"It's going to be truly awful," said Julie Bignell, assistant branch secretary for the Australian Services Union in Queensland state. "Given that Ansett people have always been a big family, a lot of them will want to be there just to say goodbye to each other."

Once the country's biggest airline, Ansett was put into voluntary administration in mid-September and later grounded, throwing most of its 16,000 staff out of work.

About 700 people will be kept on in the short term to do work such as maintenance on aircraft and refunding tickets.

Under its parent company, Air New Zealand, Ansett had amassed major debts because of a price war in the Australian market and maintenance problems that forced it to ground a number of planes early last year.

With government support, Ansett's administrators, the accounting firm Andersens, managed to get some planes back into the air while the search for a potential buyer began.

Late last year, Australian businessmen Lindsay Fox and Solomon Lew offered A$1.8 billion (US$940 million) for a pared-back version of the airline. The deal was approved by shareholders and creditors.

But last week, just one day before the sale deadline, Fox and Lew's Tesna consortium pulled out of the deal. They blamed stalled negotiations with the government and airport owners over Ansett's leases of domestic terminals across Australia.

Most of Ansett's final 67 scheduled flights yesterday were fully booked, or close to capacity, the airline said. Its last flight will leave Perth at 11.45pm local time, arriving in Sydney today.

Ansett was founded by Australian aviation pioneer Sir Reginald Ansett in 1936 in a small town in Victoria state. To overcome laws at the time forbidding competition with the state's railways, the fledgling airline offered flights for free, but charged for the piece of fruit that passengers received onboard.

By 1969, the small fleet had become Australia's largest domestic airline.

The carrier saw its share of passengers dwindle over the last 10 years as Australia's international airline, Qantas, entered the domestic market. Further competition also took its toll as cut-price airline Impulse -- now owned by Qantas -- and Virgin Blue took to the skies in 2000, leading to a fare war.

Bob Ansett, the son of the airline's founder, said it was clear from early on that saving Ansett would be difficult.

"A lot of people were driven by ego and self-interest and greed and in the end it was the airline that paid the price," Ansett told Australian Broadcasting Corp radio.

The nation's competition watchdog, the Australian Competition and Consumer Commission, has vowed to keep a close eye on airfares as analysts warned prices would skyrocket with the demise of Ansett and the return of a duopoly in the national aviation industry.

This story has been viewed 3842 times.
TOP top