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Joined: Mon Dec 11, 2000 10:39 am

Fox-Lew Plan For AN Will Go Ahead

Fri Nov 23, 2001 9:05 am

If you can trust journalists, we can now just about be convinced that a new Ansett will be flying from Jan 31...

Hip hip hooray...

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Fox, Lew Ansett plan flies


THE Solomon Lew-Lindsay Fox bid for Ansett is poised to proceed after the syndicate substantially wound back its claims for federal Government support.

The syndicate led by the Melbourne-based millionaires will receive no financial assistance from the Government.

But it has resolved issues about the approval of its air operator's certificate, arrangements for employee entitlements, landing and take-off slots, and exemptions from provisions preventing cross-ownership of airlines and airports.

Deputy Prime Minister John Anderson emerged from a 90-minute meeting with Mr Lew and Mr Fox confident that two remaining competition law issues could be resolved by next week and that the $3.6 billion deal would proceed.

"I have every confidence and belief that the commercial forces at play here can be brought to fruition," Mr Anderson said.

The news was backed by an Australian Competition and Consumer Commission announcement that it would widen its investigation into anti-competitive behaviour in the aviation industry.

The Fox-Lew syndicate has sought protection against potential predatory practices through changes to the Trade Practice Act and the introduction of a "cease and desist" power similar to that in the telecommunications industry.

The Government announced in the election campaign earlier this month that it would review the competition provisions of the act, leaving it the option of introducing interim measures to placate the Fox-Lew syndicate.

One source said legislative changes would not be needed to give the syndicate sufficient comfort to proceed.

Federal cabinet meets next Tuesday and there is an expectation the remaining issues could be resolved by the middle of next week.

Mr Anderson praised the the two businessmen for accepting the Government's point that financial and tax concessions would have to be applied industry-wide.

The Lew-Fox syndicate had already distanced itself from a claim by the administrators for a $195 million grant for worker entitlements and apparently did not press a claim for accelerated aircraft depreciation and other tax breaks.

The Government has written to the Ansett administrators, reaffirming they must repay any advanced money used to cover employee entitlements.

Mr Anderson said the Government would not relinquish the normal statutory priority applied to repayment under the Special Employment Entitlements Scheme for Ansett employees (SEESA) scheme.

He said SEESA and the underpinning ticket levy were never intended to be used to meet Ansett's liabilities or unsecured creditors.

"SEESA is a safety net for employees, not taxpayer funds to be used at the discretion of the administrators," he said.

Singapore Airlines says it has no immediate intention of investing in Ansett.