The first of the sizeable airlines looks like it's gone under now - and quite possibly dragging Air New Zealand down with it.
I wonder if this Rod Eddington success story will be repeated at BA?
From today's (well, tomorrow's actually) Sydney Morning Herald:
Time runs out for Ansett
By Mark Todd, Darren Goodsir and John Schauble in Suzhou, China
Ansett looks certain to be abandoned by its parent, Air New Zealand, and its immediate fate decided by receivers as early as today.
The airline's main chance of survival faded last night when the Federal Government insisted it would not back a taxpayer-funded bail-out.
With trans-Tasman talks failing to secure enough capital to save Ansett, calling in the receivers - the first stage in winding up Australia's second-biggest domestic carrier - could occur today.
Much hinges on a New Zealand Cabinet meeting today.
Air New Zealand's distressed board is believed to have exhausted all options to keep both airlines afloat.
The New Zealand Prime Minister, Ms Helen Clark, virtually sounded the death-knell for Ansett, which employs 16,000 workers and whose only genuine rescuer, Singapore Airlines, has all but walked away from a planned $4 billion cash and fleet resuscitation.
Adding weight to reports Ansett would be excised, she said Air New Zealand would not be toppled by its subsidiary, bleeding $1.3 million a day.
Ms Clark said: "The bottom line is Air New Zealand as the national airline has to be kept flying. Life without Air New Zealand is unthinkable."
As Ansett cancelled all national advertising, Air New Zealand's board held an emergency session late into the night. But their apparent failure to find a solution to the crisis is likely to lead to further severe falls in the company's share price, which has recorded three successive record lows.
The 25 per cent dive in the stock's value in the past week has undermined attempts to attract new investors, leading to renewed pressure on the Federal Government to go guarantor for Ansett, or fund a bail-out to avert its collapse and the political calamity of lost jobs, ditched routes and higher air fares.
But now a taxpayer-led rescue has been scotched, Ansett insiders say only two options remain. The first is for Qantas, the market leader, to take over Ansett alone, or together with its struggling parent.
This "Canadian option" - a reference to that nation's monopoly airline market - was unlikely to garner support from the Australian Competition and Consumer Commission or politicians, wary of the impact on air fares that may occur under such a regime.
The other option, in the absence of a buyer, is for receivers to be appointed. Receivers might not ground Ansett, but would seek to stem losses, and generate cash by slashing jobs and services.
Under this option, forward ticket bookings would be honoured, but frequent flyers would be in doubt.
In China after talks with New Zealand's Finance Minister, Dr Michael Cullen, the Treasurer, Mr Costello, repeated the Government's opposition to a rescue, pinning hopes on the unlikely prospect of a buyer.
"Air New Zealand is a privately-owned New Zealand company," he said. "Ansett is its subsidiary. The ownership of Ansett is in the hands of a privately-owned New Zealand company. "This is a matter for the shareholders and directors of that company to determine its commercial outcome."
Unions representing some of the worried workforce held a rally in Melbourne yesterday. There will be more union meetings today to push for Government support to keep Ansett flying.
Industry analysts say Air New Zealand has been left with little option but to cut lose Ansett after realising the business is now worth less than half the $1.2 billion they paid for it. It will announce it has written down the value of Ansett by more than $500 million, or roughly the entire market capitalisation of its parent.
If Air New Zealand does not move to isolate Ansett, it could leave the airline in breach of conditions covering some $4 billion in debt, putting it at the mercy of its bankers.
Putting Ansett into receivership may see the airline broken up, putting jobs at risk.