Ansett: Fox snipes at Howard

[Buster Hyman]

Ansett: Fox snipes at Howard

April 20 2003
By Brendan Nicholson
Political Correspondent

Domestic air fares would have halved if the Federal Government had supported the Fox-Lew consortium's bid for Ansett Airlines, says transport magnate Lindsay Fox.

The self-made multimillionaire has described how the failure of the $3.6 billion bid soured a 25-year relationship with Mr Howard and made him vote Labor after a lifetime of supporting the Coalition.

In a Foxtel interview with Neil Mitchell, Mr Fox said an assertion that Ansett could still be flying if it were not for the actions of the Government "might be on the ball".

He said he and his partner, Solomon Lew, could probably have kept fares down to last year's levels.

"That's a bygone era," he said. "That was a transaction that needed a lot of Government support, and today if you wanted to buy a ticket to go to Brisbane or you wanted to buy a ticket to go to NSW you'd find it more than double what it was this time last year.

"It could have been lower because you'd have real competition on the same basis, which doesn't exist today."

Mr Fox said the big problem was that the airline stopped flying. "In retrospect, if Ansett had kept flying, and people still had the confidence to stay with them, it might have been a different thing today."

Asked who was responsible for the $3.6 billion bid's failure, Mr Fox blamed lack of Government support, and the consortium's failure to get access to airports.

One problem was the Government's concern about the strength of the unions within Ansett.

"The Government perceived it as ACTU airlines, there's no question about that," he said.

Initially, when the receivers were trying to get Ansett back into the air, everyone involved had to be from a Labor background.

Mr Fox said he believed Mr Howard had seen the offer as a union one, and he probably could have made it happen if he had wanted to.

Asked what he thought of Mr Howard, Mr Fox said there were some things he kept to himself.

"I've known Mr Howard for 25 years," he said. "There's no question about his ability as a politician. Not too many people have ever survived all the situations that John Howard's survived and still come up as prime minister."

Mitchell: "But is he a statesman?"

Mr Fox: "He's a good political Prime Minister."

"Not a statesman?"

"No. A good political Prime Minister. I think a statesman's one who sort of makes decisions that are in the interests of the nation in total, not necessarily a political party."


Yeah, good one Lindsay! In other words, look how much you could've squeezed from AN's carcass! :suspect: :*

[TIMMEEEE]

One Ball , to quote you " When they squeezed the AN Staff bid out of the running " .
The fact was that the AN Staff was never really a serious contender and from what I recall not one employee was given details of structure and/or how this funding was to take place or be financed.
The AN Staff would in reality be in the same place as the current United Airlines staff - looking to be out of work in the near future and with your Superannuation buying you a soon to be defunct and worthless airline.

In short it was a sham from the start and naive to believe it would ever eventuate.

As for Fox/Lew the fact was that these two chumps had absolutely no intention to run the airline in the true sense.
Besides we saw how a trucking magnate ran an airline last time around.
Their excuse for "Not being able to gain terminal access" was exposed to be utter fabrication - these guys just didnt want to pay for it!

The fact was that these wannabees were hanging out for something like over a billion dollars worth of government grants/handouts/tax concessions and actually wanted the govt to guarantee funding below a certain load factor.
Having the union on side and winding up the poor unemployed by seeing to be getting their jobs back gave them some credibility - but not enough.
They made excuse after excuse and about the Air Services Terminal Contract, delayed it accordingly and then realised when their grants were not going to be approved and that they would lose their shirts so to speak ran like children from a bullie in a schoolyard.

What did we get in reality?
A littany of lies, inconsistencies in staffing levels and pay rates (constantly being revised and reduced on both accounts), non stop delays in what was exposed as non existent aircraft orders with no actual money exchanged (letter of intent only), false promises throughout and when they had to spend real money to secure the terminal leases and their billion dollar government handout didnt materialise the boys ran and went skiing in Europe or some such place!

The ACTU boss (Charvet?) was made to look like a complete fool when he quoted that he had seen the documents signed for the purchase of aircraft and that it was a 'significant amount of money' (or similar words).
In reality it was only a letter of intent and no real hard cash had changed hands.

Now all that is left I suppose is for Lindsay Fox to "Kiss Richard Branson's arse" just as he promised.
How about it Lindsay?

[jupiter2]

Okay.
Now can someone tell me how to get the money we're owed?
How angry do we have to get?

[Whiskery]

Neil Mitchell and Lindsay Fox having an unbiased discussion about John Howard. Now let's see, that would have been on Foxtel's Comedy Channel.


"That was a transaction that needed a lot of Government support,

should read "That was a transaction that needed a lot of taxpayer's support,...."

Asked who was responsible for the $3.6 billion bid's failure, Mr Fox blamed lack of Government support, and the consortium's failure to get access to airports.


should read "The Government (like Richard Branson) didn't fall for our con for taxpayer's money to prop up our bid. We could have made a killing out of those Sydney terminals if John Howard had come to the party. It's not as if it was his money!"

The self-made multimillionaire has described how the failure of the $3.6 billion bid soured a 25-year relationship with Mr Howard and made him vote Labor after a lifetime of supporting the Coalition.


Oh Lindsay, I am sure John Howard is soooo dissappointed about that...........BWAAHAHAHAHAHA.

[Snowballs]

Ansett like the dinosaurs was doomed, neither the cynical Fox /Lew or staff bid had a hope in hell of succeeding long term. The industry has changed forever, for anything other than low cost carriers. The closest I have ever seen the Australian media talking sense is the following article published a week or so ago in the Herald Sun. The same basic business principle applies in Oz. SARS will, unfortunately accelerate the trend worldwide unless they can come up with a miracle cure very quickly to restore confidence in the industry.

Competition is killing airlinesBy Stephen Ellis 08 April 2003

AMERICAN troops may be storming through the streets of Baghdad, but that won't stop the US airlines continuing to point to war in Iraq as an excuse for another handout.The debt-laden major airlines - United, USAir, American, Northwest, Continental and Delta - are in a huge mess again.
United is currently reorganising under Chapter 11 bankruptcy protection and may not make it through. USAir just came out of Chapter 11, Continental has been there twice in the 1990s, and many observers see American heading there soon unless it changes its ways.
But, as usual, there is something else for highly compensated executives at the big airlines to blame for their continued inability to generate value for their shareholders or even preserve value for their creditors. This time, not only is there the war, but SARS as well. All this on top of the continuing fallout from terrorism and the post-2000 economic recession, the two previous excuses. There is no doubt that all of these factors do lead to damaging short-run fluctuations in traffic, particularly the marginal customers that airlines count on to lift them to breakeven and beyond. And September 11 clearly created an unprecedented crisis for the US airlines -- although let's not forget they managed to squeeze $US5 billion in cash and $US10 billion in loan guarantees out of the federal government to help them through it. But the real reason is that airline management (and other stakeholders such as pilots and other workers) just can't bring themselves to take (or accept) the tough decisions, such as yielding market share to low-cost carriers.
The underlying problem that the major US airlines have been facing for the past 20 years is that the money they get paid for flying people around - their seat-mile revenue yield - has been in steady long-term decline.
In 1982, the US airlines collected US15c per available revenue mile. Last year, they collected a little under US10c. In fact, the average price that passengers pay to fly a single mile has fallen 45 per cent in inflation-adjusted terms since the US airline industry was deregulated by the Carter administration in 1978. That long-term decline in per-unit revenue, once you smooth out short-run fluctuations, has almost nothing to do with fuel prices, terrorism or international crises.
It's all about competition and deregulation. And the price fall has had exactly the effect on demand that you and the deregulators might expect: Over the same period, the annual number of passengers travelling on US carriers rose from 250 million to 570 million. At the same time, the costs and operation assumptions embedded in the way that most of the big carriers do business have barely changed in a decade.
The big players rely on massive and often inefficient hub airports, heterogeneous fleets, inflated wage contracts to buy industrial peace, labour-intensive work practices, costly loyalty programs to lock in customers, and incredibly convoluted ticket pricing structures to try and force business travellers to buy the most expensive tickets. Put simply, the big airlines rely on a legacy business model that means their costs are around twice as high as the costs of smaller insurgents such as Southwest, JetBlue and the rest. But when the latter enter a route between two cities, they typically cause average revenue-mile yields to fall by around 30 per cent. That fall takes prices to a level that allows the low-cost guys to make money but not the big incumbents. The steady encroachment of low-cost airlines into new routes, combined with a refusal to yield market share, is what is really killing United and American, not terrorism or war.
An increasing number of business travellers are using the lower-cost airlines, which have much simpler and clearer fare structures. Southwest has just five basic fares, for instance. In the latest quarter, Southwest actually recorded a higher revenue-mile spread than American.
There should still be hope for the big airlines. United has recently managed to raise revenues by 20 per cent on certain routes by experimenting with simpler fare schemes. And even though their legacies of mixed fleets and big hubs are an intrinsic disadvantage, industry observers believe the large airlines could close about 75 per cent of the cost gap between them and the low-cost operators by negotiating better labour contracts, automating functions such as check-in, restructuring the way their big hubs operate, and making other painful but far from impossible changes.

[sprucegoose]

From a legally uneducated point of view I have the same interest as jupiter2, my interest of course is as an outsider. How long can the administrators drag this on while the available funds to pay out ex AN employees dwindles. If this goes on long enough is it possible there will be NO funds available? Certainly the pool was deeper say nine months ago than it is now.

[Torres]

The first line says it all.................

"Domestic air fares would have halved if the Federal Government had supported the Fox-Lew consortium's bid for Ansett Airlines, says transport magnate Lindsay Fox."

Lindsay, are you suggesting the present Leader of the Opposition would make a better Prime Minister - or better at rubber stamping your business propositions?

"......and made him vote Labor after a lifetime of supporting the Coalition."

I think you're paddling upstream in a barbwire canoe if you believe that. Even your ACTU mates are looking at turfing Crean in favour of a re-birth of the big guy from the West! C'mon, you're a far more astute business man than that!

(Edited to add an after thought!)

[dghob]

Fox seems way out of touch with fares - my missus and I seem to be able to get around the country more than ever nowadays on internet fares with Virgin & Qantas. I know we're paying less than we would have last year. In any case how could an airline stay in business if fares were half what they are now, even allowing for selective route pricing?

Fox a former coalition voter? Sure. The way he's had Keltie hanging on to his shirt tail for the last umpteen years makes me think he's having a go at someone here. :rolleyes:

dghob

[Sub-Sonic MB]

Garbage.

Mr. Lindsay Fox's comments to Mr. Mitchell.

Could make a good TV program.

How about - "Sing Along with Mitch"?

[gaunty]

I think Mr Fox and his mate were given more than an adequate opportunity to put their money where their mouth was.

And yes the M & Ms have a shedload to answer for in this regard, no significant non-refundable "look see" deposit or indemnity for the creditors funds expended, to keep the ship afloat whilst they were doing so. Responsible behaviour NOT.

On what, by almost every rational observers was going to end up in the manner that it did.

Kelty/Fox = ACTU = Proxy control = mouth full of feathers for the AN staff.

If I was Mr Fox I would be laying low on this one, lest someone notices.

If I was the AN Staff I would be asking some really hard questions.