Singapore Airlines ready to enter Ansett's cockpit
Tail end ... Ansett's buyers are expected to change its livery. Photo: Nick Moir
By Darren Goodsir, Transport Writer
Singapore Airlines has told Ansett's prospective owners that it is prepared to manage the carrier's operations, but only if it is given autonomy in selecting routes, the frequency of flights and work conditions.
However, despite being keen to anoint the airline as managers of their new service, the Lew-Fox syndicate is reluctant to give up too much control.
A spokesman for Singapore Airlines said yesterday "talks are continuing" on its role as potential managers.
TICKETS: Ansett is now selling tickets for travel for 347 days after January 31, the day new owners Solomon Lew and Lindsay Fox are expected to assume control of trunk route operations
ROUTES: Ansett now flies between Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart. It intends dropping Hobart from initial services and adding Canberra
FREQUENT FLYERS: Ansett will launch a new frequent flyer program, but questions remain over whether it will recognise any of the 70 billion points that have been lost
SERVICE: In-flight meals and lounge services will be reintroduced
It is understood sticking points are corporate governance arrangements, contractual terms and payment clauses. A detailed network model developed by Singapore Airlines over the past six weeks, but yet to be embraced fully by the Lew-Fox team, also needs to be resolved.
"But the parties are moving closer, rather than being further apart," an industry source said.
"The major issue is how the board proposes to relate to management and what is going to be in the purview of management in terms of decision-making.
"Singapore is putting up some tight conditions on control."
Interest in the Lew-Fox syndicate's decision on who will run Ansett has intensified with the decision on Tuesday to sell seats beyond January 31. On that date, the Federal Government's underwriting of tickets expires and the businessmen expect to assume ownership.
Ansett is saying key appointments, including a chief executive, are imminent.
It is also soon expected to finalise aircraft livery, uniform and branding changes.
Last month, Singapore Airlines employed a former senior Qantas executive, Peter Stainlay, to help the Ansett administrators, Mark Korda and Mark Mentha, in structuring the limited trunk-route operations.
Mr Stainlay is still consulting during the transitional period before settlement.
Tickets for travel until January 2003 went on sale yesterday, with a revised network that excludes flights to Hobart but increases overall frequency by 30 per cent.
Allowing forward bookings means the Lew-Fox syndicate has exposed itself to losses should it pull out of its $3.6 billion deal to buy 29 new aircraft and employ up to 4000 workers.
Issuing tickets is the strongest signal yet that Mr Lew and Mr Fox will conclude their purchase.
Most of the extra flights are for the Sydney-Melbourne-Brisbane triangle where Ansett loads have been patchy because of Qantas's dominance in the business market and Virgin Blue's success in leisure travel.
Despite Ansett's more convenient flight schedule in the new year, a source within the Lew-Fox syndicate believe they must partly resurrect points lost in the Global Rewards program if they are to have any chance of luring back once-loyal customers.
About 70 billion points perished when the airline was grounded in September. That averaged 27,000 points for each of the 2.7 million members.
Although Mr Lew and Mr Fox are not legally obliged to recognise the liability, Ansett's advisers are pushing them to return some of the points.
The cost of reviving the points is enormous and the Lew-Fox team has so far pledged only to start a new frequent flyer scheme.
"These people have been Ansett customers, they are potential Ansett customers under the new ownership and we need to provide a program that creates some value from their existing points," said the source.
Meanwhile, Qantas unions, some still at loggerheads with management over a wage-freeze plan, are promising a fight over moves to outsource key functions for its start-up international carrier, Australian Airlines.