Originally Posted by
Lookleft
The only experience I have is what I saw and went through during the Ansett administration. Just to be clear Ansett didn't just suddenly stop flying, it was in administration for 5 months flying a limited service with the support of the ACTU. So the unions were well and truly represented during the whole period when KM were negotiating the sale to Fox and Lew. Lindsay Fox in particular was very chummy with the unions through his association with Bill Kelty. At the end of the day it didn't matter and the employees and the unions were left high and dry when the people with the money decided at literally the last minute to not proceed with the purchase.
My advise to any Virgin employee is not to put your faith in the union to secure the deal despite what they say because they can't force Bain or Cyrus to buy the airline if at the last minute they choose not to. The most devastating statement I heard during the whole Ansett debacle was Greg Combet on the news stating "There are no jobs to be saved at Ansett.".
Bear in mind that Ansett was somewhat different to Virgin in that there was only one party interested in Ansett.
In retrospect that lack of interest is sort of interesting in that Ansett's balance sheet was actually better than Virgin's. In today's dollars Ansett was carrying about $5.2 billion in debt and liabilities against $5.9 billion in assets for a net equity position of around $700 million. Virgin is carrying $6.9 billion in debt and liabilities against about $5.8 billion in assets to be underwater to the tune of $1.1 billion. Now, you can make the argument that the new accounting standard, AASB 16, means that aircraft lease liabilities are treated differently to how they were back in 2001, but even when you back that treatment out of the Virgin numbers you're still left with essentially zero equity.
There were clearly some operational issues for Ansett (think B767s) that Virgin doesn't have but the business should have been salvageable. Of course, probably the key difference between the two situations is that back then you had no other than Virgin Blue looking to slot into the spaces that Ansett was vacating. That's not a factor this time around.
Any old how, back then there was no choice between competing bids, competing business models and potentially different outcomes for the staff. Once Lindsay and Solly realised that they weren't going to get their hands on the Sydney terminal they quickly lost interest and that, as she wrote, was that. The unions being matey with Lindsay meant nothing at the end of the day because they were never presented with the opportunity to have a say in proceedings.