Wirraway
8th Sep 2002, 18:03
Mon "The Australian" (Editorial)
Editorial: Remembering the lessons of Ansett's fall
September 09, 2002
THE human cost of Ansett's collapse last September was immense. One year on, it continues to take its toll. As The Weekend Australian reported, the grounding of the carrier changed the lives of thousands of former Ansett employees. Many experienced unemployment and financial hardship, others suffered from depression, family breakdown, stress, and, in a handful of cases, committed suicide. Ansett employees have received less than half the total $740 million in entitlements they are owed. While some former executives have bounced back to find new jobs, an estimated one-fifth of Ansett's workforce is unemployed. Many others are working less than they'd like to.
But it's not all doom and gloom. Some ex-Ansett staff have found fulfilling new professional challenges. The administration process drags on, hampered by the ongoing slump in the aviation industry. Yet the administrators are being highly creative in extracting as much money as possible from Ansett's assets, including, as The Australian reports today, charging $20,000 for film crews and rock bands to use empty planes and hangars.
For all the personal hardship and heartache there was little the Government and the Australian taxpayer could do or should have done once the airline hit rock bottom. Ansett was a troubled commercial operation, not a government business. The federal Government did the right thing by eventually resisting pressure for a massive taxpayer-funded bail-out. Despite some election-induced flirtation with big-ticket rescue packages, commercial solutions were pursued. Of course, there was no guarantee government backing of the troubled airline would have kept Ansett in the air, and preserved jobs. Governments, moreover, have no business spending large sums of public money on the risky commercial proposition that is an airline. It is a capital-intensive enterprise that should be left to the private sector to strive for efficiency and cheaper air fares. And despite Lindsay Fox and Solomon Lew pulling the patriot card in trying to get Ansett II up and running, the airline could not be resurrected as an extension of ACTU power.
But has the Australian aviation industry learned from the experience of the past year? And are passengers better off? After an initial period of soaring air fares (encouraged by the post-September 11 slump in global aviation), Virgin Blue reasserted itself and passengers have been able to snap up cheaper tickets. More solid competition returned to the skies in March when Patrick Corp chief Chris Corrigan bought half of the no-frills airline. Virgin Blue's tenacity and popularity has kept the dominant airline, Qantas, on its toes. Yet, when Qantas slashed fares in May, and added flights to cope with demand, Allan Fels bizarrely accused it of exploiting its market dominance. Meanwhile, the Virgin Blue/Sydney Airports Corporation stoush over access to Ansett's former terminal drags on, forcing the public to put up with overcrowding and inconvenience at Australia's largest airport.
The federal Government, for its part, refuses to abolish the absurd $10 Ansett ticket levy. The responsibility for paying for Ansett workers' entitlements should not be sheeted home to the travelling public. This remains an unfair and short-sighted imposition on passengers.
Australian aviation faces a fresh period of uncertainty. The big initial winner out of Ansett's collapse, Qantas, is struggling to raise $200 million from retail investors. Its share price has tumbled, driven by fears of a war in Iraq, higher oil prices, and speculation about a third player in the Australian airline industry – Singapore Airlines.
The redrawing of the industry in the aftermath of Ansett's collapse suggests Australia can probably only sustain an airline duopoly with smaller outfits catering to rural routes. Time will tell whether Singapore Airlines has any success. In any event, the Government must keep a hands-off approach and leave it to the market, because taxpayers can't run or prop up airlines.
Editorial: Remembering the lessons of Ansett's fall
September 09, 2002
THE human cost of Ansett's collapse last September was immense. One year on, it continues to take its toll. As The Weekend Australian reported, the grounding of the carrier changed the lives of thousands of former Ansett employees. Many experienced unemployment and financial hardship, others suffered from depression, family breakdown, stress, and, in a handful of cases, committed suicide. Ansett employees have received less than half the total $740 million in entitlements they are owed. While some former executives have bounced back to find new jobs, an estimated one-fifth of Ansett's workforce is unemployed. Many others are working less than they'd like to.
But it's not all doom and gloom. Some ex-Ansett staff have found fulfilling new professional challenges. The administration process drags on, hampered by the ongoing slump in the aviation industry. Yet the administrators are being highly creative in extracting as much money as possible from Ansett's assets, including, as The Australian reports today, charging $20,000 for film crews and rock bands to use empty planes and hangars.
For all the personal hardship and heartache there was little the Government and the Australian taxpayer could do or should have done once the airline hit rock bottom. Ansett was a troubled commercial operation, not a government business. The federal Government did the right thing by eventually resisting pressure for a massive taxpayer-funded bail-out. Despite some election-induced flirtation with big-ticket rescue packages, commercial solutions were pursued. Of course, there was no guarantee government backing of the troubled airline would have kept Ansett in the air, and preserved jobs. Governments, moreover, have no business spending large sums of public money on the risky commercial proposition that is an airline. It is a capital-intensive enterprise that should be left to the private sector to strive for efficiency and cheaper air fares. And despite Lindsay Fox and Solomon Lew pulling the patriot card in trying to get Ansett II up and running, the airline could not be resurrected as an extension of ACTU power.
But has the Australian aviation industry learned from the experience of the past year? And are passengers better off? After an initial period of soaring air fares (encouraged by the post-September 11 slump in global aviation), Virgin Blue reasserted itself and passengers have been able to snap up cheaper tickets. More solid competition returned to the skies in March when Patrick Corp chief Chris Corrigan bought half of the no-frills airline. Virgin Blue's tenacity and popularity has kept the dominant airline, Qantas, on its toes. Yet, when Qantas slashed fares in May, and added flights to cope with demand, Allan Fels bizarrely accused it of exploiting its market dominance. Meanwhile, the Virgin Blue/Sydney Airports Corporation stoush over access to Ansett's former terminal drags on, forcing the public to put up with overcrowding and inconvenience at Australia's largest airport.
The federal Government, for its part, refuses to abolish the absurd $10 Ansett ticket levy. The responsibility for paying for Ansett workers' entitlements should not be sheeted home to the travelling public. This remains an unfair and short-sighted imposition on passengers.
Australian aviation faces a fresh period of uncertainty. The big initial winner out of Ansett's collapse, Qantas, is struggling to raise $200 million from retail investors. Its share price has tumbled, driven by fears of a war in Iraq, higher oil prices, and speculation about a third player in the Australian airline industry – Singapore Airlines.
The redrawing of the industry in the aftermath of Ansett's collapse suggests Australia can probably only sustain an airline duopoly with smaller outfits catering to rural routes. Time will tell whether Singapore Airlines has any success. In any event, the Government must keep a hands-off approach and leave it to the market, because taxpayers can't run or prop up airlines.