Ansett Takes Off On A Mystery Flight
The Age
Friday September 28, 2001
TOMORROW four Ansett planes are to resume flying the Melbourne-Sydney route, with one more on standby and six to start flying next week. It is hardly the return of a major competitor to Qantas, but it is a symbolic and prudent first step towards maximising Ansett's value by maintaining its core assets as a going concern. If the exercise succeeds in regenerating business goodwill, rebuilding passenger confidence and buying time to develop business plans and attract buyers, it could even secure the future of a viable and essential service. In contrast to some of the false expectations raised in recent weeks, Deputy Prime Minister John Anderson described the resumption of flights accurately: ``It's not a rebirth of Ansett, it's rather an arrangement that will preserve the core of the airline until the administrator can work through sale arrangements with prospective purchasers."
The fact is that Ansett's collapse came at a terrible time, with the terrorist attacks on America creating grave problems for airlines around the world. Australia is unique in its demand for more flights, and cannot afford a near-monopoly by Qantas - a niche discounter such as Virgin Blue notwithstanding. In this light, even the limited progress achieved by the Ansett administrators is encouraging. They have stabilised the company abandoned by Air New Zealand; assessed that assets should cover employee entitlements; sold Traveland, with a staff of about 1000, as a going concern; and begun establishing that inside the old Ansett are businesses, including cargo and baggage-handling services, that can pay their way. To put this in perspective, though, consider that only 11 of Ansett's most valuable planes, Airbus A320s, will fly only the most profitable routes, only about 1500 employees will return to work and only about 13,000 seats a day will be available. (Qantas is adding 18,000 seats a day by bringing in 12 planes from overseas routes.) Holders of old Ansett tickets and frequent-flyer points will remain unimpressed. Yet the administrators say they hope that Ansett, in some form, will be operating in a year's time, with a market share of just under 20per cent and a workforce of at least 5000.
This depends on cooperation all round; governments and unions will have to rethink long-held positions. The Federal Government has come up with a $25million money-back guarantee for passengers buying tickets for the next 12 weeks, which has some symbolic value. More substantial is its $10billion insurance indemnity to domestic airlines, including Qantas. Then there are the federal and state-backed loans to get Ansett subsidiaries Hazelton, Skywest and Kendell back in the air. Unlike the Commonwealth, the Victorian Government has also indicated it will make a point of patronising Ansett services. Such unusual intervention is justified by exceptional circumstances: it is not the time to put at risk an essential service that connects a vast continent. For now, Ansett is flying again, and that could give it a fighting chance.
© 2001 The Age
