Past Government assistance.
SQ being blocked in its bid to buy half of Ansett.
Ansett was 50% owned by Rupert Murdock's News Corp and 50% by Peter Abeles' TNT Corp. When times starting getting tough & no pot of gold could be made in aviation, Abeles succesfully negotiated to sell his 50% to Air NZ. News Corp also decided that it wanted out so it appointed Rod Eddington as the AN CEO with his main responsibility to prepare the airline for the sale of News Corps' share. Air NZ appeared to take on the role of silent partner and didn't see a conflict of interest with 100% of Eddington's salary being paid by News Corp. Eddington siphoned as much money as possible into News Corps coffers whilst negotiating a potential sale of the AN carcass to SQ. When agreement was reached between News Corp and SQ (AU$500M), Air NZ became aware and decided to exercise their first preference right to purchase the other 50% of AN. This obviously infuriated SQ & dissapointed News Corp but they didn't complain much, just took the money and exited.
Now Air NZ started to integrate networks and became aware just how dire the AN finances were (I remember being told by a very senior AN training captain in 1999 that AN had $40M in reserve and they were bleeding $1M every week). In 2000, Toomey lost out to Dixon for the gig to replace Strong as QF's CEO and, some time later, he was chosen to be the Air NZ/AN CEO. Toomey was aware of the AN financial situation, as QF had people monitoring the finances of their competitors, so one of his early actions was to find out the true situation. The senior staff admitted that they really didn't know how bad it was so Toomey set up a team to do a thorough investigation and report back with the truth no matter how bad the situation was. The results were as bad as feared and meant that the parent company, Air NZ, was also at serious risk. It was at this point that Air NZ began to take all remaining AN assets of value (not a lot left due to News Corps plundering) and then Toomey offered to sell AN to QF for $1. It was an easy decision for Dixon to decline as it would have meant taking on the massive debt that AN had accrued. After that, it was only a matter of time before AN was cast adrift by Air NZ and the fallout of 9/11 precipitated the closure. Air NZ was so badly burnt by this that they would also have failed if not for being bailed out by the Kiwi Government.
Borghetti wasn't a player in any of this as he wasn't high enough up the QF corporate ladder at the time. He became prominent in the mid 2000's (replaced Lyle Strambi in charge of International operations). He was a candidate to replace Dixon as QF CEO along with Peter Gregg (CFO) and the eventual winner Alan Joyce (JQ CEO). As he couldn't work with Joyce, he departed and some time later, Branson convinved the Virgin Blue board to select Borghetti as their new CEO, replacing Brett Godfrey.
Ansett was 50% owned by Rupert Murdock's News Corp and 50% by Peter Abeles' TNT Corp. When times starting getting tough & no pot of gold could be made in aviation, Abeles succesfully negotiated to sell his 50% to Air NZ. News Corp also decided that it wanted out so it appointed Rod Eddington as the AN CEO with his main responsibility to prepare the airline for the sale of News Corps' share. Air NZ appeared to take on the role of silent partner and didn't see a conflict of interest with 100% of Eddington's salary being paid by News Corp. Eddington siphoned as much money as possible into News Corps coffers whilst negotiating a potential sale of the AN carcass to SQ. When agreement was reached between News Corp and SQ (AU$500M), Air NZ became aware and decided to exercise their first preference right to purchase the other 50% of AN. This obviously infuriated SQ & dissapointed News Corp but they didn't complain much, just took the money and exited.
Now Air NZ started to integrate networks and became aware just how dire the AN finances were (I remember being told by a very senior AN training captain in 1999 that AN had $40M in reserve and they were bleeding $1M every week). In 2000, Toomey lost out to Dixon for the gig to replace Strong as QF's CEO and, some time later, he was chosen to be the Air NZ/AN CEO. Toomey was aware of the AN financial situation, as QF had people monitoring the finances of their competitors, so one of his early actions was to find out the true situation. The senior staff admitted that they really didn't know how bad it was so Toomey set up a team to do a thorough investigation and report back with the truth no matter how bad the situation was. The results were as bad as feared and meant that the parent company, Air NZ, was also at serious risk. It was at this point that Air NZ began to take all remaining AN assets of value (not a lot left due to News Corps plundering) and then Toomey offered to sell AN to QF for $1. It was an easy decision for Dixon to decline as it would have meant taking on the massive debt that AN had accrued. After that, it was only a matter of time before AN was cast adrift by Air NZ and the fallout of 9/11 precipitated the closure. Air NZ was so badly burnt by this that they would also have failed if not for being bailed out by the Kiwi Government.
Borghetti wasn't a player in any of this as he wasn't high enough up the QF corporate ladder at the time. He became prominent in the mid 2000's (replaced Lyle Strambi in charge of International operations). He was a candidate to replace Dixon as QF CEO along with Peter Gregg (CFO) and the eventual winner Alan Joyce (JQ CEO). As he couldn't work with Joyce, he departed and some time later, Branson convinved the Virgin Blue board to select Borghetti as their new CEO, replacing Brett Godfrey.
Last edited by Going Boeing; 19th Apr 2020 at 11:28.
markontop. Re your post #8. The aircraft type was B767 not B737.
Your quoted article went on to state "If Australia is to have economic sovereignty, it must act to rebuild Australian ownership of strategic companies like Ansett.
A way forward would be for the Australian Government to follow Singapore's example, and set up a fund which can buy into key national enterprises, such as Ansett and Qantas.The capital base for such a fund could come from the compulsory superannuation contributions currently paid by Australia's nine million employees, billions of which currently end up off-shore, in foreign investments"
We now have that fund. It was formed in 2006 and named the Future Fund. It has a current value of $168B. Unfortunately or fortunately the Chair and Guardians of the Future Fund will not invest 1 cent in VA. The Prime Minister has suggested Union Aligned Superannuation Funds with $3T of assets especially the TWU Super Fund should step in and save VA. The response from the Union Aligned Superannuation Funds being "pretty nuts and we do not invest in junk bonds".
The Super early release scheme starts on Monday 20 April. This is expected to put pressure on the union not for profit funds which could create liquidity issues for some funds. The 30 June 20 returns for these funds are going to be a negative 20 to 30% due to the revaluation of their assets to support the huge redemptions.
The downturn on the economy has some way to go yet even if borders and all restrictions were lifted tomorrow.
Your quoted article went on to state "If Australia is to have economic sovereignty, it must act to rebuild Australian ownership of strategic companies like Ansett.
A way forward would be for the Australian Government to follow Singapore's example, and set up a fund which can buy into key national enterprises, such as Ansett and Qantas.The capital base for such a fund could come from the compulsory superannuation contributions currently paid by Australia's nine million employees, billions of which currently end up off-shore, in foreign investments"
We now have that fund. It was formed in 2006 and named the Future Fund. It has a current value of $168B. Unfortunately or fortunately the Chair and Guardians of the Future Fund will not invest 1 cent in VA. The Prime Minister has suggested Union Aligned Superannuation Funds with $3T of assets especially the TWU Super Fund should step in and save VA. The response from the Union Aligned Superannuation Funds being "pretty nuts and we do not invest in junk bonds".
The Super early release scheme starts on Monday 20 April. This is expected to put pressure on the union not for profit funds which could create liquidity issues for some funds. The 30 June 20 returns for these funds are going to be a negative 20 to 30% due to the revaluation of their assets to support the huge redemptions.
The downturn on the economy has some way to go yet even if borders and all restrictions were lifted tomorrow.
The response from the Union Aligned Superannuation Funds being "pretty nuts and we do not invest in junk bonds".
