Ansett - The Collapse

[Thylacine]

Ansett - The Collapse byGeoff Easedown and Peter Wilms[/B]

The book gives a potted history of Ansett and reveals the background leading to the airline’s demise under Air New Zealand’s inept management in September 2001.

Prior to that, however, it was probably damaged beyond repair under TNT. In particular Sir Peter Abeles’ penchant for visiting Air Shows and ordering aircraft without consulting the board resulting in the expensive mismatched fleet in the later years. Over staffed, overpaid, and over geared, it was stumbling towards its inevitable crisis when Air New Zealand without due diligence bought it for far more than it was really worth. The Kiwis paying over $700 million for what News Ltd were willing to sell to SIA for $200 million a year earlier

The administration is covered in detail from the perspective of the two Marks and reveals the extraordinary efforts taken to endeavour to revive the corpse. The TESNA bid with all the intrigue by Fox and Lew is outlined at length but unfortunately never reaches a conclusion as to why they baulked at the final hurdle.

Were they only after the non airline assets, in particular the terminals, potentially worth more than the airline itself but realised late in the day they were not tradable items on their own or did unknown financial backers get cold feet at the last moment?

It’s a good read and tells the story in an unbiased and chronological fashion that dispels much of the hype and postulations that were floating around at the time, not least on this forum.

[LooseConnection]

Thylacine it was doomed from the day Abeles got control of the board.

I was there saw it happen, just took around 20+ yrs that's all. :)

[Spad]

Sorry if I appear to be a conspiracy theorist, but I couldn’t resist commenting on the first post.In particular Sir Peter Abeles’ penchant for visiting Air Shows and ordering aircraft without consulting the board resulting in the expensive mismatched fleet in the later years.And who, I wonder, pocketed the multi million dollar commissions on each and every one of these many ‘silly’ purchases?
…it was stumbling towards its inevitable crisis when Air New Zealand without due diligence bought it for far more than it was really worth. And who, pray tell, did ANZ buy the dead debt-ridden, dead-in-the-water airline from ‘without due diligence’? None other than the Dirty Digger himself, whose empire pocketed the many more dollars than AN was worth, leaving ANZ holding the proverbial baby. It will be interesting to follow the future careers of every person on the ANZ board, particularly any who find a plum job with any corporation even remotely associated with one with the word ‘news’ in its title.
The TESNA bid with all the intrigue by Fox and Lew is outlined at length but unfortunately never reaches a conclusion as to why they baulked at the final hurdle. How many words does it take to say “When the out and out gift of the Sydney Terminal to TESNA was taken out of TESNA’s AN ‘rescue’ deal by Minister Anderson, Blind Freddie could have told you that the TESNA deal was never going to go forward.”
Were they only after the non airline assets, in particular the terminals, potentially worth more than the airline itself but realised late in the day they were not tradable items on their own… Believe it or not, I hadn’t read this last paragraph when I wrote my last comment.

In a word – yes.

Not meaning in any way to disparage Lindsay Fox and Solomon Lew with my last comments – if anything, quite the opposite. If one could set aside the high emotions that were prevalent at the time, from a pure businessman’s point of view, (and that’s what the two gentlemen in question undoubtedly are), the airline was never anything more than a necessary evil that had to be taken on temporarily to allow them to gain the real prize – the Sydney terminal. I suspect that ‘circumstances would have changed’ rather rapidly after they had the terminal safely transferred to a separate business entity and, with deep regret on the part of Lindsay and Solomon, AN Mark 2 would have gone the way of AN Mark 1. (On the subject of ‘Mark 1’ and ‘Mark 2’, is it just me, or do others feels there were (are?) just too many ‘Marks’ involved in the whole AN fiasco?)

[kangaroota]

Thylacine
You refer to Ansetts' demise under Air New Zealands inept management.
What would you have done differently had you been in management?

[gaunty]

Spad old thing,

Game set and match I'd say, thank you linesmen, thank you ballboys.:D

It's amazing you, I and others predicted the endgame from the very get go, copped a whole heap of stuff for seeing, what was as plain as the nose on our faces.

What's wrong with this country, that so many people can be so blind to the bleeding obvious and actually applaud and afford hero status, to the very ones stealing them blind.:eek:

Who needs love affairs like that.:p

Next will be the Royal Commission into the behaviour of all participants in the "Administration" and the coughing up of the Staff creditors funds expended by the Administrators' role playing "airline magnates".:rolleyes:
Problem is Labour and the Unions are in it up to their eyeballs, so I don't imagine that is going to happen in a hurry in Victoria.

Funny that, Ansett has benefited that lot hugely, in fact one could be forgiven for thinking that Labour had a direct line into Ansetts' giant piggy bank, it's not suprising that they tried so hard to raise the dead.

[Airspeed Ambassador]

Kanga,

How about advising the board not to buy something they couldn't really afford in the first place!

[Wizofoz]

Read a very astute quote recently about an unrelated acquisition-

"A good business becomes a bad business if you pay too much for it"

At the time of the NZ takeover, AN was ALREADY a bad business, but not beyond saving if a good parent with deep pockets (And, dare I suggest, a yellowish complexion!) had come along.

By paying WAY too much for it, Air Sheep Shagger was in the position of having no more capitol to invest and an over valued asset they could never hope to get a decent return on.

JUST BY THE WAY their actual management of the airline whilst they owned it was APPALING (As an example, do thee letters CRJ ring any bells? Rodders' baby, but the INCREDIBLY inept attempt at implementation was on ANZs watch), but that just sped up the demise.

Like I have said before, they bought an Airline that needed saving and DIDN'T. ANYONE care to argue with that?

[Traffic]

There was reference to 200m. I think the deal with SIA was 500m (AUD).

Haven't read the book yet but assume there is no direct reference to Brierly Investment's starring role.

It was BIL that held the gun to AirNZ's head and made them exercise the pre-emptive rights. The trigger was pulled by one man...and he was chairman of both AirNZ and BIL. How long after this fateful decision did Jim McCrae last as a dissenting voice.

In simple terms, BIL's balance sheet could not take the write down from their holding in AirNZ. Some might recall that the first AirNZ 50% of Ansett cost about AUD800m at 1998 prices, a lot more than the AUD500m that was on the table with SIA.

The inevitable result of ego, avarice and arrogance. It's amazing what a mess one strong-willed person can make in such a short space of time.

[Wingletts]

Wizofoz,
In reference to yr quote "do the letters CRJ mean anyrthing?"

... I think you'll find that it was AN's idea to implement the CRJ under their own policies and procedures ( CRj's had never been flown operated like this anywhre else in the world- i.e according to our crews the hardest most expensive and difficult way!) and whilst they may not have been the right aeroplane , they were making money for KD and Big sister AN- load factors,service and a building reputation were great.. but majority of profit from our fares were put in the piggy bank by AN (i.e a PER-MEL, MEL- HBA fare-KD would've been lucky to get anything back. It's just the big sister had to pocket the profits ( as it was their brain child with their coding on all flights) and big brother ANZ was robing Peter to pay Paul. Had KD been able to mangae this A/C's infrastructure independantly we might have remained the profitable and viable regional we always were !
What a shame - such dedicated passionate and hardworking crews - big hopes with a great little jet ( in my opinion anyway) What a waste - it certainly seemed that way to see all 12 CRJ's in storage at the jet base in Melbourne in 2001 - brand new a/c just sitting there. If only the big guns had realised.

All very bad management and timing - so...please don't knock our little RJ's. An's problems were far bigger even before the CRJ's had entered the country.

[Kaptin M]

From most accounts, Wiz, it would seem that Ansett was past the "saving" point - and probably had been for some time, prior to its initial collapse.
My guess is that is was held together for as long as possible to allow as much to be sucked out (by those who knew its true position) as possible.

Why you and others, continue to DREAM that Singapore was going to be Ansett's "white knight" is beyond my comprehension.
SQ have had a bit of a dabble in Oceania, when they got involved in Air New Zealand in a small way.
For the record, I'll again say that ANY prospect of SQ becoming involved in Ansett was dashed, when they (as opposed to Air Sheep) did THOROUGH due diligence of AN's financial accounts!

Ansett had been window dressed by Eddington - the abrupt turnaround in such a short time was too IN-credible.
And then HE left hurriedly!

[Tool Time Two]

As I have often said, the demise of Ansett began in 1979 with the injection of the first sedative, namely the fat man, and the dirty digger throught his deal with the late Holmes a Court. :cool:

[FarQ2]

Right on T.T.T. , lets not forget how "The Fat Man" assett stripped a great company as soon as he got control.

Others wiser may add to this list, my recollection of what Reg owned or controlled in the 70's is as follows:

Ansett Transport Industries consisted of:

Hamilton Motors, Bendigo Motors, Gateway Inns Aust., Ansair, Mildura Bus Lines, Diners Club, Pioneer Coaches, Hamilton Isle,
Proserpine Airport (may not have owned that but Ansett built it)
Helicopter Operation Proserpine, Ansett Roadways (Freight), Ansett Airlines Australia, Airlines of W.A., Air NSW, Airlines of S.A.,
and ASL a finance arm, this is where Reg dropped a bundle and made himself vunerable and consequently was taken over by the "vultures"
:mad: :mad:

Others may care to add to the above list.

[jupiter2]

Please do not omit the fact that News Corp sold every last remaining asset before Rod departed.
They have much to answer for as well!

[Wizofoz]

Winglets,

You make my point for me. A perfect example of the actual bad management that sped the demise. If KD had been allowed to run their own show, no doubt it would have gone smoother. Alternatively if the CRJ had been crewed and operated by AN, it would have worked. Deciding to have you crew it but by a process of suddenly being "Ansettised" was a recipe for disaster!

As to the operations actual viability, putting a smaller aircraft into an established market was obviously going to mean good load factors initially, until the SLF got tired of getting into the "Little Plane" whilst watching the red tailed 737 or 767 take off in front of them. It had other problems too. I once paxed next to a senior exec from freight who was on a mercy dash to try and save a major account. She said we had lost virtually our entire same day freight business out of Tassie as the CRJ couldn't carry it, and entire accounts were in jeopardy as companies wanted to do all there freight with one company. Remember, we were carrying "High Value Passengers" in a CRJ during the day, and then sending empty 767s to carry hold freight during the night!

As to the Kap, right to the end, SQ was publicly committing to taking 80-100% of AN, providing it could also have 1/2 of ANZ, or alternately if Big Dick hadn't torn up the cheque. Your right that as a business it was a basket case, for all the reasons stated, and yes Zer Pedar would be top of the list of vandals. But strategically, think what they would have had. All of An, half of ANZ, half of Virgin Atlantic (Remember this is pre Sept11) plus SQ is a pretty formidable grouping. It would have taken major surgery to turn AN around, but in the end they would have "had it all". In any case, irrelevant as it should never have come to that and history is just that.

As a foot note on the flight ops discussion, I always knew AN did things differently. Having been out in the "Big Wide World" for a while, I now see HOW differently! I find it a bit sad, therefore, when I still run into former colleagues who'll wax lyrical about how well we did things. We got the job done, but only by re-inventing the wheel over and over!

[LooseConnection]

Wizofoz don't forget the wheel ALWAYS came out SQUARE. :D :D

[kangaroota]

When are you goat blowers from the West Island going to admit that Ansetts demise was bought about by you lot crapping in the nest.

If ANZ paid too much for the crock of s--- then that is mis-management of ANZ, not Ansett.

Your whinge really is about the fact that someone didn't step up to the mark with the play money to keep you in the fat, bloated lifesyle to which you had become accustomed.

If it was such a wonderful airline, why did it need saving?

You have disabled your Private Messages function so I have no alternative but to "counsel" you publicly.

May I offer a more constructive version of your post as follows;

"When are you people from Oz going to admit that Ansetts demise was bought about by you lot.

If ANZ paid too much for it, then that is mis-management of ANZ, not Ansett.

Your whinge really is about the fact that someone didn't step up to the mark with the play money to keep you in the lifesyle to which you had become accustomed.

If it was such a wonderful airline, why did it need saving?"

See it doesn't lose anything for the deletion of the expletives.W

Keep it up and you're outa here