Putting Ansett Out Of Its Misery

Mon May 28, 2001 12:18 am

in relation to two other threads (cheek of air new zealand and Ansett/ANZ comback) its seem to me that something has to be done about ansett.

The marriage with air new zealand as been as productive as sticking wheels onto a tomato and has been a factor in air new zealands difficulties.

With SQ seeming to be interested in ansett, would it not be better for air new zealand to sell up to Sq, that way one greedy airline can marry another and air new zealand no longer has to worry about the millstone around its neck which is dragging it down. Some people are saying that its down to air new zealands mismanagement of ansett, although since anz itself seems in good shape, I would suggest that it isnt anz's fault.

So what I'm saying is that Ansett should be put out of its misery like the rotting flea-ridden dog that it is by being sold to SQ which can turn it aroind while Air New Zealand can get on with its life.

im sure this will be debated, i find my comments always are!(lol)


go air canada!!!!
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 1:26 am

My Two Cents:

Ansett are a great airline in the way of Service, cleanliness, on-time arrival - and it is a pity to see them in such a dire situation and would like to see them survive, whether by sale partial sale to SQ or another scheme.

Air New Zealand is one of the worlds great airlines and I do believe that the management ability to be able to bring Ansett back into alignment and profitability.

To my knowledge - Singapore currently only has the rights for a 49% purchase of Ansett, and this would be a great thing for Ansett.

I would object to Ansett being wholly owned by SQ under an issue of National pride - Australia and New Zealand hold very close ties and work together to ensure the security of the jobs of their employees.

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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 5:13 am

No wonder your comments are hotly debated:

"The marriage with air new zealand as been as productive as sticking wheels onto a tomato"

"Ansett should be put out of its misery"

"the rotting flea-ridden dog that it is"

I rarely take offence at anything, but although I have no connection to AN whatsoever (except appreciation for their superb product and dogged determination in the face of bad luck and in some cases unwarrented persecution), I find your comments way out of line.

Have you flown Ansett? if yes, you will know how stupid and immature your comments are, if not, I'm telling you such.

Get a life.

And by the way, the point of this forum is not to stir people up, it is to be informative. That can be easily achieved without such unnecessary comments.

RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 6:35 am

Go Air Canada.

I love the way you say in your profile that Ansett are an "upstart", when you are showing those very same qualities in your post. Why is it that you hate someone who seems to be so much like yourself?

Anyway, w-h-a-t-e-v-e-r.

To the topic at hand.

When NZ bought their first 50% of Ansett, they had pre-emptive rights on the other 50%. When SQ offered over $500 million for that other 50%, NZ jumped into the fray, and used those rights to grab the full 100%.

They did this, even though they did NOT have any solid financials to do so, and hence were forced to get up to the eye ball in debt to get that 50% which they obviously wanted to stop SQ from getting.

Everything else NZ have fucked up with AN just flows on from that initial "walking the walk, but not talking the talk" move by NZ.

I sincerely hope that AN will be gotten by SQ in the very near future. And you know what? Because of NZ's total screwup in the whole debacle, SQ will be able to offer NZ but a pittance of what they paid for it; at least SQ has the ACTUAL money to be able to spend on a fleet renewal program

BTW, NZ is not in as great as shape as you may think.

They are in dire need of a fleet upgrade, and have been for the last 10 years. Yet, nothing has been done on this.

Seeing as they had to get into debt to buy the 2nd 50% of AN, can you imagine how much more debt they would have had to go into to upgrade their fleet?

Anyway, I'll leave it to the other "upstarts" in the forum to refute what I have said.

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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 7:04 am

I think it's fair to say AN wasn't in the greatest of shape before ANZ took control, but equally ANZ has badly mismanaged AN.

AN had been the largest Domestic Airline for as long as anybody cares remember, ANZ run the show for a couple of years and their market share is down in the 30's, from 50+ for decades (20-30 years??), while their major competitors share actually goes up in the face of new competition.

AN is cashed up, with a $1billion in hand, it's ANZ that's broke.

So AN has loads of cash, ANZ is flat broke and drowning in debt, so by deduction AN is the lame dog. AN successfully was the major domestic airline with over 50% of the market to before jets, until ANZ got involved, so quite clearly ANZ has a better idea on how to be successful. I think people with that kinda logic are just the type of investor I want for my new business,  Big grin

ANZ might be making an operating profit for all i know, but it won't be for much longer if it carries on like it has, very damn ignorantly. If I worked for Ansett (or ANZ) I wouldn't be very comfortable with that knowledge (personally).
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 7:46 am

Why do any of us bother responding to this "go air canada" dope? He seems to have little idea about anything to do with Australian aviation and even less about punctuation and grammar. If we ignore him, maybe he'll go away.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E90, CR2, D82/3/4, SF3, ATR
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 9:38 am

There are many reasons why the marriage is not working or taking far too long to work, but there are a myriad of articles around by highly qualified analysts and other professional industry bods that have gone through all this.
Suffice to say - it's happened, it's not working in it's current format/direction and something needs to be done. There are a lot of ego's involved which is probably *the* major stumbling block at the moment. Maybe financial sense will prevail after all. As for the capability of NZ's management, well I think they have a track record that is pretty damn fine when you look at the old, small Air NZ. It does appear to becoming patently obvious they were not prepared or ill-equipped to transfer this over to their new company which suddenly tripled in size, despite having many many months to prepare for it.
If our friend "Go Air Canada" had a clue, he'd also realise that his beloved AC relies very heavily on AN to sustain AC's daily flights into/out of Sydney. Take away AN and AC would struggle down here. Why is AN "greedy" anyway?? That lost me a bit.
Cheers/Regards. Al.

RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 10:49 am

Scotty and Al covered my comments well.

Go Air Canada,

I await your response to the other forum members questions on your ability to judge AN.

No Cheers,


***Absolutely Ansett***
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 1:56 pm

Same idiot
Same comments
Same argument
Same judgement
Same response...........................
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 4:50 pm

I agree with somebody else in this forum.
Ansett was in quite bad shape before ANZ took over, and still is. But I also think that the media is taking advantage of Ansett right now.

I agree that Ansett should be (partially) sold to Singapore Airlines. It would be a better step for Ansett... definately.
Singapore Airlines is an airline I can only compliment, and obviously if Ansett is sold to them, they would manage it accordingly.

Spirit of Australia
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RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 4:58 pm

It has all been said in the other threads - perhaps we will have a further dissertation from our "Go Air Canada" friend that we can all sit and laugh at.


Air New Zealand is profitable as a stand alone carrier

AN is vital to ANZ's long term strategy. Control by another carrier threatens that "feed".

AN capital needs in fact stem from poor decisions made more than 5 years ago.

ANZ has a lower fleet age than does QF.

For anyone to think that somehow SQ will be a white night, and that all AN problems will be resolved just by the addition of a few new aircraft, have a very narrow perspective. The current fleet is getting old, but the major issue is capacity. I have said it before, if you think that the AN culture would be untouched (or understood) by SQ, think again.

The structural (and systemic) blunders by ANZ are history (Oh our friend Go Air Canada is a history student, so perhaps he is fond of living in the past). Most of the management has been replaced, and I think Gary Toomey needs 12-18 months to settle it in. Do not expect "immmediate results" within six months.

There will be more management changes soon at Board level and these will strengthen the expertise for AN /ANZ.

And last but not least, perhaps we should limit comments on a particular airline to those who have at least FLOWN on them.


RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 5:51 pm

Ansett woes may drag Air NZ $176m into red
Weighed down...Ansett's tribulations are making waves for its parent company across the Tasman. Photo: Virginia Star

By Mark Todd

Ansett's operational problems may have cut deeper into earnings than first thought, with analysts adding another $NZ100 million ($80 million) to the already substantial losses forecast for the airline's owner, Air New Zealand, in 2000-2001.

On average, analysts were expecting Air New Zealand to lose $NZ120 million in the year to June 30, 2001, but circumstances have worsened since a profit warning in late March.

Falling market share, a highly competitive domestic market and a severe hike in costs due to a fall in the Australian dollar could lead Air NZ to produce a loss as high as $NZ220 million ($176 million) in 2000-2001, analysts say.

Air New Zealand may also use the poor result as an opportunity to make potentially massive revisions to the value of certain assets, dragging the bottom line still lower through one-off charges.


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A series of mishaps at Ansett, including the grounding of its fleet of 10 Boeing 767s during the Easter holidays, has severely damaged goodwill for the airline, leading to a sharp dip in loads.

Apart from harming Ansett's reputation, the problems have boosted demand for rival carriers, in particular Qantas.

Some analysts suggest that Ansett's share of the domestic aviation market has slipped below 40 per cent again, a descent that it first experienced earlier this year.

"The fallout from Ansett's Easter groundings and the damage that did to goodwill is worse than expected," one fund manager said.

"But the real danger is not to near-term earnings, but the continued degradation of the Ansett brand."

Last week Mr Gary Toomey, chief executive of Air New Zealand, indicated it was likely that the company's losses would extend into 2001-2002.

Air New Zealand is studying options for a $5 billion fleet renewal program for Ansett. Next month merchant bank Salomon Smith Barney will present a report on Air New Zealand's alternatives, with management to then put a strategy to the company's board in August.

It is believed that one option for funding could include Air New Zealand's 25 per cent shareholder, Singapore Airlines, taking a direct stake in Ansett.

Air New Zealand is also mulling an issue of shares in the near term to help fund the acquisition of new planes and to strengthen its balance sheet.

On Friday Qantas issued monthly traffic figures which underline the competitiveness of the domestic market.

Loads, or the proportion of seats filled, fell 4.2 percentage points in March to a still-strong 77.3 per cent. In the first nine months of the financial year to June 30, loads eased 0.7 percentage points to 79.6 per cent.

Across all its operations, Qantas's loads are up 0.8 per cent to 76.8 per cent in the 2000-01 year to date while the number of passengers carried was up 8 per cent to 16.6 million.

it seems that dear old ansett is still in problems, i hope they do recover one day......would u say two years than 12-18 mths Oz777?


RE: Putting Ansett Out Of Its Misery

Mon May 28, 2001 5:53 pm

OZ777...a serious question (yes I can do them)....

Where do you see Ansett in two years time, with anz or with SQ?

Personally I think SQ as I believe that they have more financial clot to restructure ansett.....

comments valued as always

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 10:42 am

I do not agree with all that Aviatsiya has to say. ANZ's fleet is very fluid, and apart from the B767-200's, is quite young. Look at the ATR's, B737's and not a 742 in sight. There has been no need of fleet replacement "for ten years" because when you look at ANZr fleet acquisition plans over the past few years, it has been very measured against growth, with an active spare capacity lease arrangement.

Historically ANZ have done well with their leasing - even when DC-10's were NOT flavour of the month, ANZ was very successful in placing their -10 fleet around the world.

The AN issue is quite a different story.
Those of you who propose SQ should come in to AN, perhaps should explain why. Examine what the real issues are. True, the fleet is in need of upgrade, but the critical issue is capacity, ie additional aircraft, not just NEW aircraft. The current fleet is mixed (legacy of Sir Peter), but you are faced with the chicken/egg question.

What comes first - try and gain market share, and domestic profitability, or add capacity in a softening market in a hope of anticipated results from clawing back market share. There is little use in flying around empty jets if no body wants to fly with you.

I get the impression that those of you who propose the SQ involvement are only looking at the fleet. Would SQ add value to the strategy, management, product and overall culture of AN.

Lets look at the strategy. The largest "group" of overseas visitors to OZ are from NZ, so the need for an adequate "feed" from that departure point still exists. The second highest is ex Japan, for which SQ does not have any direct service. So from a synergy perspective (and I look at potential here) ANZ is probably the best option that AN has. If ANZ were to lose control of Ansett, what guarantee exists then for either AN or ANZ to get that share of passengers.

Management: No one can deny that the integration of AN into ANZ has been less than spectacular. But in fact, there has hardly been a smooth "amalgamation" of two airlines anywhere in the world. Even the QF/TN amalgamation came with a lot of "us and them" baggage for a long time, and of the top 50 executives in the "old Qantas", how many were left 5 years later. 3...

SQ has a very different management structure, and they would impose their own systems. I think you would find that there would be a level of management above which few OZ people would gravitate. I have seen this with other Asian carriers in Australia - line responsibility rests with local management, but the chiefs were always "imports". The consequences of that were (and still are) often frustrating, with decisions often referred back to the HQ with little or no respect shown for local input. SQ is not much different, with a very autocratic style (an that is really cultural). If SQ takes a substantial position in AN, they will want to control the input and outcomes, and I think that will be inconsistent with how AN wants to operate itself.

Product:SQ has an excellent product reputation - but not in a domestic environment. The perception comes from use of the "Singapore girl" profile, additional cabin crew (as a result of low wages, this is possible), but the reality is still (on their International service) cramped Y class cabins, as a result of decreasing seat pitch, increasing capacity (and revenue). But how will those elements work in Australia. First of all, EEO will very quickly put to bed the discriminatory employment practice (for those gay members who work for AN, there would be a very tacit barrier in place under SQ management), with a 93% female, age, height, and other conformitant requirements. Sorry, but SQ knows no other way.

Wages would be depressed for the Australian workforce, and productivity would be benchmarked against SQ's own operations. Why?.. Because SQ operates that way, and they have little experience of either domestic operations, or adding value to other operating cultures. And to those who argue that SQ would somehow "leave AN alone" ..... if you have a poorly performing asset (investment), without applying rigorous changes to each of the elements, product, management, operations, then what is the use of investing in the first place?

Later this year, VS will undergo an "audit" of the SQ involvement. Already we are seeing VS going from a "leisure" airline to chasing business on some of BA's prime routes. I sincerely doubt that VS is doing this just because they want to. That is an example of the SQ "investment" - there is no free ride for the hell of it!!

Last but not least, there has been some comment about the Sydney Morning Herald article. Hardly the Australian Financial revue. A word of caution. Analysts vary greatly in their interpretation of the available data. Salomons are not in the business to work with a client in capital options and at the same time be negative about that client to a daily newspaper. Anecdotal evidence indicates that AN's loads have not softened, and claims that the ANZ/AN position is much worse than reported, flys against the mandatory reporting requirements of both the NZ and Australian stiock exchanges.

One thing through the SMH article - notice the word "may" all through it. That is a "guess" word.

Toomey and ANZ are playing it very close to the chest. ANZ/AN will bleed for another 18 months, but you cannot cure 5-7 years of neglect in six months. ANZ are frightened of "co-ownership" of AN - they had their hands burnt with News Corp and were unable to put in place their own strategy (remember one of the most respected Airline managers in Eddington wa actually on New's payroll) - so they will look closely at other options also.

I think the true position is somewhere between the last SE report, and the "doomsday" article. Give Toomey time to settle in his management and come to grips to resolve each of the structural problems (like what is the use of having a new fleet if your engineering process is faulty). The last thing AN needs right now is another "new owner".

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 10:46 am

I must say, you have hit the hammer on the nail, and alot of people are loosing respect for you.

Now i must say, Somebody said AirNZ has a crap fleet, Sorry but AirNZ donot need a New fleet. Even AN donot need a new fleet. It is fine as it is. Even though there are problems, they are exaggerated by the Media alot. They do it just to get a story!! These things happen all the time. Some airlines do fly without there slides armed. That is worse!!
Atleast AN has the balls to say that they did!!

Well Said Guys... But i do think that If AirNZ allow sq TO BUY some of AN it would relieve pressure of AirNZ immensly!!

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 10:57 am

maybe you would like to read the recent thread where QF has formally approached the NZ board to buy SQ's and Brierley's shares and SQ has stated an interest in 100% of AN. I think this changes the equation dramatically. I, for one want to see AN prosper and SQ is the best vehicle for that and I hope Toomey moves back to MEL to CEO AN.
Can't see why you are so negative about SQ getting control of AN. NZ can't handle it and seem to be looking for a way out. It is common knowledge SQ never wanted NZ-they want AN and access to the lucrative Aussie domestic sector. And,yes it is still very lucrative.
If this all goes thru, I wonder where it will leave DJ? I would imagine they would(1) die (2) link with AN-SQ or (3) grow and develop their network to include trans-Tasman and NZ domestic.

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 11:49 am


Have a look at my response on the other thread. If QF purchase SQ's share, there is no material benefit to ANZ (SQ end up with the profit if any) and ANZ take a massive loss on the sale of AN, effectively devaluing ANZ shares further. That will be a major call for the Board of ANZ.

Heavens, in the last 6 months QF have "talked" to Thai, Malaysian, PIA, Air India and several others. All reported to the various stock exchanges and very little has come of it.

Apply some rationale to this. This is a very neat feint, targeted just at the right time. Make things even more difficult for the opposition when they are at their weakness. Nothing like spreading the odd rumour or two.
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 12:01 pm


this is much more than a rumor and it gives AirNZ the easy way out. SQ want AN and not NZ,so it suits them perfectly. QF want less competition on the Trans-Tasman market and don't really want to be a player in the NZ domestic market. They could form 2 highly profitable sectors in one hit.
Obviously,and wisely, QF would be wary of a domestic rival controlled by their biggest foreign competitor SQ. But if this scenario eventuates, and I agree, there are many ifs, it would probably spell the end for DJ and QF/AN would basically be back to the gool old days of having the Australian domestic scene to themselves.
Ax to the other airlines QF have spoken to, I believe a deal with MH was nearly done but the others were not all that close. I still wouldn't completely write-off the chances of QF having a stake in MH or TG in the future, but I regard this proposition as the most likely to succeed. It is more than a tactical ploy.
Would be hard to see Toomey staying at NZ if this all panned out. Maybe a future as CEO of AN based in MEL would be more to his liking with the backing of the richest airline in the world.

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 12:10 pm

I don't understand why you think staff at AN would
be run like SIA in regard to wages, their pay would
be protected by Australian law.
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 12:13 pm


I regard Geoff Thomas as the best Australian Aviation journalist and from what I have read in the AFR,I would have no problems comparing the SMH to it.
I think you have analysed a proposed SQ buyout of AN in a very negative way and I am sure the management at SQ would do a terrific job at AN and your gay worker claims are way off beam in my opinion. Sure SQ ain't perfect but the current AN-NZ situation is almost unworkable in the long-term,let alone the short-term and I am sure NZ shareholders would look very closely at a buyout deal by QF. In fact it could be their salvation. Their performance in the past year could only be described as atrocious.
Give me a better international Y-class product than SQ's?

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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 12:23 pm

As a poster on PPrune wrote:

Why all the concern about an SQ takeover of Ansett.
Is'nt that why we have the
Federal Government and Industrial Relations Commissions etc, to protect and nuture the welfare and working conditions of Australian workers which are ensconced in their EBAs and employment contracts.
Just how could SQ bypass all that 'protection'!!!!!!!!!!!
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 12:34 pm

Singapore is Australia's 5th largest source of tourists, which is huge for a tiny country.

Europe accounts for nearly a quarter of Aussie tourist arrivals. This is what would benefit AN most (and SQ of course) if they tie up with SQ.

As it is, most of SQ's flights to Europe are code-shared with AN which means AN is feeding SQ with its passengers, and SQ is feeding AN domestic with their passengers as well.

On a Thursday morning flight I took to MEL a month ago, (you basically leave SIN at 9.30am and reach MEL at 7pm in time to check in the hotel and waste one night of accomodation), it wasn't school hols in EUrope, SIN or Australia and the timing of the flight sucked, the 747-400 was FULL. ANd according to their staff, all their morning flights to MEL are full. Of course, most passengers were not from Singapore ( I think Singaporeans rarely make up more than 15% of any randomly chosen SQ flight) but from Europe.

THAT is what will benefit AN and SQ.
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 3:34 pm

Well said Airnewzealand,
I think that ANZ and AN's fleets are fine!
Also now that your predictions (Go air canada) are coming true (read the other post saying that SQ is in talks to sell its stake of ANZ to QF, and that SQ will buy AN off AnZ) what do you think will happen?
I will be glad to see ANZ partially owned by QF and I hope Ansett shapes up soon

The spirit of Australia
Spirit of Australia
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 4:07 pm

I tend to agree with Tullamarine, B727-200, Aviatsiya & MX5_boy!

go air canada - you obviously don't know a great deal about AN/NZ!

Out - BZF
Ansett Australia - (was) One of the worlds great airlines!
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 4:33 pm

I disagree with the notion that AN's fleet is fine.

Age may be a consideration, but it is the abject lack of commonality, which I believe is of concern. In the short term, increased capacity is needed.

Compared to other Australian airlines, Ansett is flying Noah's Ark.


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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 5:15 pm

Wirraway, I respect your opinion...but speak to the tech crew who are under contract to SQ, they do not speak all that highly of their employer. I have first hand experience of working with SQ - they are ruthless, and compromise is a word they find very difficult to understand.

It is easy to establish a lower cost base in Australia - how do you think Impulse and Virgin have lowered their staff costs?

If you think that all the workers are protected by their cosy little EBA's etc, have a look at the case study of the Tasmanian Govt Railways when they were bought out by ATI. A very simple method to sideline employees who do not fit their corporate "profile". I'm not saying it is good, not in the slightest, but it how the big boys play the game, and it is quite legal.

SQ have NO experience running a domestic operation (apart from SilkAir), and set very different productivity benchmarks.

Look I would love to be proved wrong, but in the real world nothing is ever quite as it seems. Look at how Singapore operates as a country - do you in all honesty think that they will readily accept the way Australia does things in deference to their own methods. In general, the Asian culture regards Australia as ill-disciplined and somewhat lazy, and that does not translate into leaving AN as a cosy little institution.

SQ have a wonderful product, are very efficient, well funded, but a lot of that is because of the control they exert within their own domain. I just do not think that will translate well to an Australian operation. It hasn't before in almost any other employment sector (transport particularly), and I see no real reason why it would change.

As I said - would love to be proved wrong but.....


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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 6:40 pm

Just my 2c:

Dalecry said:
"QF want less competition on the Trans-Tasman market"

Very true, but does anyone believe that they will be allowed??? No way. Some deal has to be made so that Ansett fills the gap in this market. Eg: as I proposed in the other thread, that all current AirNZ transtasman go to AN and the new QF/NZ group use the current QF transtasman network.

Otherwise the regulators will NEVER allow it.
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 6:43 pm

Oh here we go again...

Come on you lot!

Is it time to get all petty and personal yet?
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RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 6:44 pm

No problem Oz777, we will all just have to wait and
see what pans out, although I cannot imagine AN
being run like a typical Asian airline and would presume
they would install Australian management.
You maybe interested on the Bloomberg take on the
situation, you were right on the ANZ shares  Smile/happy/getting dizzy.

Sydney, May 29 (Bloomberg) -- Qantas Airways Ltd. is in talks to buy a ``significant stake'' in Air New Zealand Ltd. after the Auckland-based airline's shares plunged on maintenance troubles at its Ansett unit. Singapore Airlines Ltd. would buy Ansett under the proposal.

Shares in all three airlines rose on hopes Air New Zealand's results will improve without the burden of upgrading Ansett's fleet -- lifting the value of any Qantas stake -- and Singapore Airlines would be better placed to profit from direct control of Ansett as a rival to Qantas, Australia's largest carrier.

``It's a long-term solution that's very good for the market and which makes sense,'' said Chin Y. Lim, an analyst at Morgan Stanley Dean Witter in Singapore. Qantas and Singapore Airlines ``both get what they want.''

A shakeout of Australia's aviation industry has been expected after the arrival of two discount carriers dented earnings at Qantas and Air New Zealand at a time when both need money to buy new planes. Singapore Airlines, which owns a quarter of Air New Zealand, may now emerge with the Ansett unit it initially wanted, only to be blocked last year by Air New Zealand's first right to buy.

Qantas approached Air New Zealand with an offer that includes buying part of the 55 percent combined stake held by Brierley Investments Ltd. and Singapore Airlines, Air New Zealand said in a statement to the Australian stock exchange. Singapore Air would emerge as the owner of Ansett, which may allay regulators' worries about Qantas' excessive market control.

Competitive Position

``The key issues will be Qantas' competitive position -- that will be quite a big hurdle with the regulators,'' said Pano Raftopoulos, who manages A$600 million ($254 million) at Challenger Professional Investment Ltd. ``It is obviously a bold move and shows Qantas' management is certainly proactive in terms of trying to improve the industry structure.''

The Air New Zealand statement did not disclose the price Qantas offered, nor how much of the Brierley and Singapore Airlines stakes it is interested in buying.

Air New Zealand's Class A for domestic investors rose as much as 10 percent to NZ$1.10, and its B shares gained as much as 12 percent to NZ$1.54. Qantas shares gained 6.3 percent to A$3.56, while Singapore Airlines gained 5.5 percent to S$13.40. Brierley's shares gained as much as 5.5 percent to S$0.48.


Qantas may have been attracted by Air New Zealand's share price. Both Class A and Class B shares are the worst performing stocks on New Zealand's benchmark Top 40 Index, having lost almost a third this year. The shares are now 56 percent of their book value per share, according to Bloomberg analytics. That suggests Qantas could make money even if it sold off all of the airline's assets.

``Qantas will be happy, they will increase their influence over the area, that would be good for them,'' said Reg Montgomery, who holds Air New Zealand shares as part of the NZ$130 million ($55 million) he manages for BNZ Investment Management Ltd.

Other analysts doubt Qantas, Asia's fourth-biggest carrier, has much to gain from buying into a weak rival that will allow Singapore Airlines a direct role in its main market, Australia.

``For years Qantas has been using (domestic operations) to support and make it easier in the international sector,'' said Jim Eckes, managing director of consultancy Indoswiss Aviation Ltd. in Hong Kong.

Eckes said Singapore Airlines had already caused ``real headaches'' for Qantas through its role in shoring up Air New Zealand, a problem that will grow if Singapore Air owns Ansett.

Qantas is one-quarter owned by British Airways Plc, one of Singapore Airlines' main international competitors.

Stepping Stone

``Singapore Airlines is targeting Ansett as a good stepping stone into the region,'' said Albert Hung, who helps manage A$800 million of stocks as head of Australian equities at Tower Asset Management Ltd. ``If they own Ansett, they can control the eastern seaboard routes of Brisbane, Sydney and Melbourne and between Sydney and London, and Sydney and'' Los Angeles.

Singapore Airlines said in a statement the talks were ``exploratory'' and at a management level. Brierley, which owns 30 percent of Singapore Airlines, said in a statement Selwyn Cushing would step down as chairman ``pending the outcome of a proposal'' by Qantas. Cushing also stepped down as chairman of Air New Zealand.

An acquisition of Ansett by Singapore Airlines, Asia's biggest airline by market value, would give the unprofitable Australian carrier access to funds to upgrade its aging fleet, part of which was grounded at Easter because of faults.

Ansett and Qantas were forced to cut ticket prices after the arrival of discounters Impulse Airlines and Virgin Blue, a carrier backed by U.K. entrepreneur Richard Branson.


Antitrust regulators in Australia and New Zealand will scrutinize the plan because of the potential for Qantas to dominate routes in both countries. The Australian Competition and Consumer Commission said it hasn't yet received a proposal from the airlines.

``We'd definitely be interested in taking a look at the proposal,'' said Lin Enright, an ACCC spokeswoman.

New Zealand's Commerce Commission also said it would want to assess any proposal involving the nation's biggest carrier.

The move comes less than two weeks after Qantas won ACCC approval to take over the business of Impulse Airlines, further strengthening its lead in Australia's domestic market. Impulse's investors include the Singapore government's investment arm.

Qantas expects talks with Air New Zealand to continue this week, Qantas spokesman Michael Sharp said. ``We're waiting to hear from the board of Air New Zealand.'' An investment bank first approached Qantas with the plan, Sharp said, declining to identify the bank.


RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 7:00 pm

oh dear poor old oz 777, well you can tell what sort of face i have on me today...a HAPPY ONE!!! he he he

IT seems that ansett will be put out of its misery by having a new owner.

So i know nothing about aus avaition do I? then how come i suggested this should happen, oh dear it seems that some of you were to quick to judge me.

Sorry if i offened any ansett/anz employees with my statement that ansett is a dead rotting dog, I do actually apologise for this, I didnt mean to upset you.

But i quiet pleased that I seem to have been vindicated, anz could never run ansett, it was too big a problem and now it seems that everyone is a winner..

SQ get ansett, as they wanted, ansett gets an airline which has the clot to make ansett reborn, a stonger ansett is better than a weaker one, dont you agree OZ777?

air new zealand loses two shareholders, but gains another one as qanatas are simply replacing bir investments and SQ.

So everyone gets the best deal possible, I get a smile on my face and the bA board get a fit of mass laughter at this prospect, all we have to do now it sit back and wait, but since QANTAS seemed to have confirmed this, I think we can trust this a fact, and I dont think it would serve qantas just to do this as a rumor as suggested, what is the point in acting bg, if you cant back it up, and I shoudl know all about that.

krgds - SmileSmileSmileSmileSmileSmile

go air canada, oh and go qantas and air new zealand, who will hopefully join the one world family,he he he

RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 7:18 pm

Although i would love to see a ANZ / QF tie up, if SQ get their hands on AN Inter. QF are going to get hammered. Like SQ is going to let one of its main rivals get stronger.

SQ will have done their maths on this onw and I dont think that they are going to want to come out onn the bottom.

I would rather see a MAS / QF tie up but i dont think we will ever see that happen

RE: Putting Ansett Out Of Its Misery

Tue May 29, 2001 7:38 pm

QantasAirways-Im not allowed to have an opinion as im only in the 16-20 year old bracket so what do I know?

Personally i couldnt be happier this morning and I think that it will all go though after much consideration. look at this way.....

at the moment QANTAS is predominate in aus, its just bought impulse ad ansett quite frankly is falling apart and taking the good ship anz with it.ANZ and ansett are joined at the hip and in effect have sing as a major shareholder.

This deal can make ansett good again and will i think, put them back on track.

Ansett needs somebody with financial muscle and anz dont need ansett so they wish to sell it, now we all know that SQ was always in the running, but if it was just this bit of the deal, then worries would exist about sing owning all of ansett and ansett international as well as owning part of anz, QANTAS with BA would have had a hissy fit at the prospect.

IF Qantas had tried to buy a stake in anz without ansett leaving then SQ would have had a hissy fit as would have Oz777 and his friends and it probably wouldnt go through.

BUT by doing both transactions at the same time, I think there is a higher chance of this going through and I feel vindicated by this action and I think its a shame that some people cant accept this is going to happen and that anz/ansett was a marriage based in hell not heaven and this can by seen by the falling profits and share price,by the almighty fleet cockups and by ansett pullign anz into the red as i posted on here before, now everybody has the best they can have and I dont have egg on my face...he he he

i rest my case

and krgds to all you who have agreed with me...

go air canada!!!!!!!!!!!!!!!!!(still laughing)

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 6:49 am

Nurse:doctor doctor, its the new intake, we dont know what to do..

doctor:its bleeding blood, its seeping out money, i dont know what to do.

Nurse: doctor, why dont you call singapore thats the normal position...

doctor: its terminal its needs to putting down, quickly, get me my injections

Nurse: but doctor singapore can save it...

Singapore:da da its super singapore to the save the day...

Nurse: oh singapore my hero

Doctor..nurse if we let this happen our position will be undermined, quick lets ring sydney and they can save us.

Sydney: is that new zealand? Ok we coming over...

sydney comes over and discharges the patient and wisks the doctoe and nurse off their feet...

well the doctor and nurse are anz, the patients ansett and qantas save the day with singapore.!!!!

he he he


RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 10:50 am

Go Air Canada,

I have to admit that last post of yours was funny!!



***Aboslutely Ansett***
Posts: 124
Joined: Wed May 30, 2001 9:50 am

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 11:01 am

It seems that we are argueing over some 'ideas' which were floated by either Qantas or SIA but are not finalised. They ahve already stated that Qantas wishes to buy ANZ, AN domestic will go to SIA as a whole and 49 of international.

SIA has wanted AN for a long time, and has both the capital and the knowledge to turn it around and make it profitable. Also AN would be a good airline to help feed SIA international flights....and also maybe start services of its own accross the Tasman, and to the US.

ANZ is small, but would compliment QF well, in that they have simalr fleets, and Qantas woudl have the capital to help upgrade ANZ's old fleet.

IS this not good for everyone. A stonger AN under the control to SQ will give better competition. AN possibly flying in NZ gives a good competitor there, and Qantas can realign itself with its old buddy ANZ, which incidentally it has held shares in 2 times before.

Just a thouight
Posts: 516
Joined: Sun Jun 25, 2000 9:48 am

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 11:33 am

RAAF Controller:
Where do you get the idea that ANZ has an old fleet. Their average fleet age is younger than QF. Some of the "new" aircraft in Air NZ include the ATR's, B747-400's, late build B737's and the new regional Beech's that are in the process of being delivered.

True some of the B767-200 are old, but are about to be disposed of (near future).

As to ANZ (TEAL) being an old buddy of QF, can I suggest you read some of the articles that have been written about the associations.

Disagreement with QEA over the Electra issue. (TEAL wanted to buy Comets)
Air NZ board "hostile" to the QF representation (which is why QF sold out of ANZ when it was first floated).

Hardly buddies, I can assure you.

Posts: 124
Joined: Wed May 30, 2001 9:50 am

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 11:42 am

Referring to ANZ having an old fleet....I had in mind some 737-200 aircraft and 747 classics. Oh sure, I know Qantas has 747 classics....but proprotionally not many (9 in total)

And yes, i am aware that there were problems at board level between QF and ANZ...but i was using 'buddies' as a lose term. What i am trying to say, is that twice before QF have had a part ownership. Certainly they had a FF scheme together, code share opps, and the like.
Posts: 340
Joined: Tue May 29, 2001 4:28 pm

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 1:54 pm

In my opioion it would be best for SQ to purchase Ansett's operations 100%. It really was a bad move for NZ to purchase AN in the first place.

Hopefully if SQ take over AN. AN may probably operate a more modern fleet of aircraft like the 777 or 340 etc for its domestic services.

For Ansett International the boeing 777 or 340 would also be great as well as the 747-400 for new Europe flights, USA etc. It's about time AN expands it's network
overseas this is long overdue.

Australia needs a second major International airline and Ansett Australia would be the best option. Those old 767-200 and 737-300's need to phased out.
Posts: 1242
Joined: Thu Mar 15, 2001 2:55 pm

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 3:23 pm

Go Air Canada,
What are you talking about?
I have no idea

Spirit of Australia

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 5:06 pm

it was a joke scence of what is happening at the moment

the patient is ansett and the doctor and nurse are from anz.They can no longer help it.
So they ask singapore for help, then they realise that they will be marginilised so they ring sydney for help. sydney represents qantas since it is one of qantas's head offices along with melbourne.

thats it really its just a joke-a bit like ansett then...he he he
Posts: 87
Joined: Fri Feb 04, 2000 4:28 am

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 5:09 pm

No, Go Air Canada...

Ansett is N O T a joke....

Jokes are F U N N Y ! ! !

Ansett, sadly, is not.

Air Taiwan
Posts: 1498
Joined: Fri Dec 03, 1999 3:06 pm

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 5:41 pm


Ansett is N O T a joke....

Jokes are F U N N Y ! ! !

Ansett, fortunately, is not.

BA FOREVER, sadly, is.

Air Taiwan

RE: Putting Ansett Out Of Its Misery

Wed May 30, 2001 9:18 pm

oh dear air taiwan-how orginal are you-prehaps you could go back to the playground of bitterness and take oz777 with you......

the jokes on you

RE: Putting Ansett Out Of Its Misery

Thu May 31, 2001 12:48 am

i think the point is valid...qantas used to own stakes in air new zealand before, the last one was 19.4% according to this dear website, so I think being picky about the lexical choice and the use of 'buddies' is rather pickey and immature

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