Ansett tipped to lose $400m
By GEOFFREY THOMAS
Saturday 9 June 2001
The news goes from bad to worse for troubled airline Ansett, with analysts now predicting it is poised to post a staggering $400 million loss for the year ending June 30.
The latest loss estimate comes only two weeks after it was predicted Ansett would post an annual loss of $270 million.
The $400 million loss represents a $510 million turnaround, compared with the previous corresponding period.
Insiders and New Zealand-based analysts confirmed yesterday that Ansett's poor performance would mean the Air New Zealand/Ansett group would record a pre-tax loss of more than $NZ300 million ($A241 million).
Air NZ/Ansett chief executive Gary Toomey was not available for comment.
Analysts have been quick to claim that the revised figure brings even more urgency to the proposed restructuring of the Australasian aviation industry.
They had warned that there might be more pain, with write-offs of some assets.
But the result is much worse than earlier gloomy forecasts, and will give fresh impetus to the complex deal for Qantas to take 49 per cent of Air New Zealand and for that airline to sell Ansett to Singapore Airlines.
The gravity of the fiscal situation at Air NZ/Ansett is apparently swaying the New Zealand Government to ease foreign ownership caps as ministers gain an understanding of the problems it faces.
Sources in the government suggest that an immediate lift to 35 per cent from 25 per cent would not be a problem and that 49 per cent is possible for the right deal.
But analysts are saying that Brierley Investments is not going to have any easy exit from its 30 per cent stake of Air NZ's class-A shares, which are reserved for New Zealanders.
"There is not going to be any `get out of jail' card for Brierley," said one Wellington-based analyst.
Brierley initiated the deal with Qantas to gain a premium exit from its Air NZ stake.
It is unclear how, if Qantas is blocked from buying Brierley's A-shares, the deal could work. One scenario is for Qantas to buy Singapore Airlines' 24.9 per cent stake and purchase on-market the airline's B-shares to lift its stake to 49 per cent.
This move, combined with the sale of Ansett to Singapore Airlines, could be the catalyst to lift Air New Zealand's share price and allow Brierley to sell its 30 per cent to New Zealand institutions at a higher price.
The Singapore-registered Brierley has 229.5 million A-shares in Air New Zealand.