9V-SPK From Hong Kong, joined Aug 2001, 1646 posts, RR: 5 Posted (14 years 6 months 3 weeks 1 day ago) and read 2317 times:
Lew-Fox banks on a promise and lands Ansett
By Darren Goodsir, Brad Norington and Linda Doherty
Ansett was sold yesterday to millionaire businessmen Solomon Lew and Lindsay Fox in a $3.6 billion deal to fly 29 aircraft on major city routes with barely a quarter of the airline's original workforce.
In what appeared to be a political ambush designed to pressure the Coalition to commit taxpayers' funds on the eve of the election, Ansett's administrators, Mark Mentha and Mark Korda, announced they had signed a deal to sell the airline's "mainline business" to the Lew-Fox syndicate.
Mr Lew and Mr Fox have agreed to inject $1.1 billion in cash and spend a further $2.5 billion buying a new fleet of Airbus A320 jets.
Mr Korda said the political timing was "happenstance" but conceded Ansett Mark II's limited operations were losing money.
The deal's success, yet to be approved by creditors, still depends on the Coalition granting up to $600 million in concessions and subsidies - including waiving a $195 million loan to cover workers' entitlements.
The Deputy Prime Minister, John Anderson, noted the agreement, but warned: "You haven't got a deal; there's no deal to approve."
For the first time, however, he left the door open for the Government to concede part of its $195 million loan.
"It is not a question of handing it over ... It's a question of where we would stand in the line and whether we would forfeit the right to that. Whether it would involve all or part of that money, I am not going to comment on that.''
Two hours before the sale was made public, the Labor Party said it would give the administrators "full access" to the loan and "work constructively to save thousands of jobs and get Ansett flying again".
The announcement was made in the presence of the shadow treasurer, Simon Crean, the ACTU secretary, Greg Combet, and the Victorian Premier, Steve Bracks. Under the deal, Mr Lew and Mr Fox take control of Ansett on January 31. The airline was grounded on September 14 after it was cut loose from its parent, Air New Zealand, and put in the hands of administrators.
They would employ 4,000 of the 16,000 workers in a full-service, two-class airline, forcing administrators to sack 8,000 staff. Ansett's former subsidiaries Traveland and ShowGroup have already employed 1,500 workers, and the fate of the 2,500 jobs in regional airlines Kendell, Aeropelican and Skywest rest on separate sales.
The new operations, retaining the Ansett name, will only fly to major airports, but will be linked with the Star Alliance network of international airlines.
Mr Lew and Mr Fox will buy terminals and Ansett's headquarters in Melbourne.
Many of the airline's unwanted assets - such as engineering, regional airlines and buildings - will be left behind to be sold off.
There are also plans to re-introduce a frequent-flyer scheme, but it is still not known whether some, or all, of the 70 billion points lost in the Global Rewards program will be
The administrator's announcement gazumped a rival bid from an Ansett pilot syndicate, due to be presented today. The ANStaff consortium said the deal had been sealed hastily.
They have withdrawn their bid until further notice.
The former Ansett chief executive Graeme McMahon said the consortium was not satisfied the Lew-Fox plan was "viable or capable of providing sufficient employment".
Mr Combet said unions welcomed the deal, but the only element missing from the agreement was the status of the $195 million loan.
The Australian Manufacturing Workers Union was not satisfied, though, because it saw a strong prospect of the new Ansett Airbuses being serviced overseas, which would force maintenance areas to close and result in massive job losses.
The union's national secretary, Doug Cameron, said the deal offered no long-term job security and would be disastrous for the skills base.