Ansett 'could have still been flying' (Rod Eddington)
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Ansett 'could have still been flying' (Rod Eddington)
Mon "The Australian"
Ansett 'could have still been flying'
By Steve Creedy
August 11, 2003
BRITISH Airways chief executive Rod Eddington is convinced Ansett would still be flying if Air New Zealand had not prevented Singapore Airlines from buying into the airline.
Breaking his silence on the Ansett collapse as it nears the second anniversary, the failed airline's former chief says he has "absolutely no doubt" Ansett would have survived even the recent industry crisis as part of a bigger SIA-Air NZ alliance.
"My thoughts were that Ansett and Air NZ both needed to be part of something that was much bigger given the size and strength of Qantas on its doorstep," he said.
"And the best option was a linkage between Singapore Airlines, Ansett and Air New Zealand and the best way to deliver that was through Singapore Airlines directly investing in both Ansett and Air New Zealand."
It was actually Air NZ's misguided decision to exercise its pre-emptive right to buy News Limited's 50 per cent stake in Ansett that changed Eddington's life and tipped him into the boss's chair at BA.
Had the Singapore deal gone ahead, he had promised former SIA chief executive Cheong Choong Kong he would remain at Ansett for at least two years.
"I'd given them my commitment and I would have kept it happily because I had spent a lot of effort and energy at Ansett strengthening its balance sheet and getting the business back on an even keel," he says.
Eddington is now in his fourth year at BA, happily living with his wife and two young children in a village west of Heathrow Airport.
He keeps close contact with Australians and Australia, watching the weekly Aussie Rules highlights for his beloved Fremantle Dockers and visiting his mother and sisters in Western Australia at least once year.
The visits to the placid waters and white beaches of Geographe Bay have proved a sanctuary during the 53-year-old former nuclear engineer's baptism of fire at BA.
He took the helm of an ailing BA in May 2000 and quickly found himself grounding the flagship Concordes after the Air France disaster in Paris. The airline was subsequently buffeted by foot and mouth disease in the UK, the September 11 terrorist attacks, SARS and the Iraq war. More recently, a wildcat strike left thousands of passengers stranded, cost the airline £40 million ($100 million) and forced Eddington to issue a public apology.
BA also faced some of the toughest competition in the industry in an overcrowded European market with low-cost terriers Easyjet and Ryanair snapping at its heels.
But the BA boss has offset a tough external environment by doing to the British carrier what he started to do at Ansett cutting costs, focusing on core operations and trying to strengthen the balance sheet.
Since September 11, BA has shed 11,000 staff mainly through natural attrition and cut costs by about £1 billion as part of a Future Size & Shape project aimed at bringing it back from the abyss of record losses.
True, the British flag carrier is still in the red and recently recorded a first-quarter pre-tax loss of £45 million. But this included a write-off of almost £80 million from the sale of subsidiary Deutsche BA and Eddington takes some consolation in an operating profit of about £40 million, positive cash flow and a 4.5 per cent drop in unit costs.
One analyst recently applauded BA as "the best recovery story in the sector".
Eddington was earlier this year named the industry's top executive by the International Air Transport Association in recognition of his efforts.
Eddington admits it has been hard work but says BA was lucky to have started addressing the problems as early it did. If it had started 12 months later, he says, the airline would have been in big trouble.
"We were able to take our costs down more quickly than our revenue (fell)," he says. "When I arrived we had debt of £7 billion and we've got it down to £5 billion."
Although some airline figures believe the industry has turned the corner after SARS and Iraq, they have yet to convince a sceptical Eddington.
"It's still going to be a very tough 12 months and maybe longer," he says. "What most European carriers are saying, and we're certainly saying, is that revenue in not going to save anybody in the short term. So you are just going to have to look hard and make sure your cost base is competitive."
The BA executive, who is also chairman of the Association of European Airlines, is also keeping a close eye on potential industry shake-outs.
He agrees with the conventional wisdom that the industry is far too fragmented and needs to consolidate. However, he believes the desire by governments to retain national carriers and problems with unravelling the bilateral system of air services agreements means the process will be slower than many think and that the signs so far are mixed.
He applauds as positive moves to allow Brussels to negotiate on behalf of all European airlines, but sees moves by the US Government to bail out troubled carriers in the wake of September 11 as "the ultimate irony".
"There are much better things for governments to do with taxpayer money than bail out failing airlines," he says.
As to BA's plans, Eddington confirms the British carrier is strengthening ties with European oneworld partner Iberia the Spanish flag carrier in which it has a 10 per cent stake but says it is not considering a merger. Instead, the relationship will be similar to the Qantas investment, where BA has board seats and an equity interest but does not interfere with local management.
The airline is also being more selective about when and where it takes on low-cost carriers such as Ryanair.
Eddington will not take on the no-frills operators at their own game, saying there has never been a case of an operator successfully running a no-frills carrier and full service airline in the same family. BA tried a no-frills strategy with Go, but sold the fledgling airline when it discovered it was cannibalising BA sales.
He believes there is nothing stopping full service operators holding key short-haul markets. But this means keeping an eye on costs and revenue margins.
=======================================
Ansett 'could have still been flying'
By Steve Creedy
August 11, 2003
BRITISH Airways chief executive Rod Eddington is convinced Ansett would still be flying if Air New Zealand had not prevented Singapore Airlines from buying into the airline.
Breaking his silence on the Ansett collapse as it nears the second anniversary, the failed airline's former chief says he has "absolutely no doubt" Ansett would have survived even the recent industry crisis as part of a bigger SIA-Air NZ alliance.
"My thoughts were that Ansett and Air NZ both needed to be part of something that was much bigger given the size and strength of Qantas on its doorstep," he said.
"And the best option was a linkage between Singapore Airlines, Ansett and Air New Zealand and the best way to deliver that was through Singapore Airlines directly investing in both Ansett and Air New Zealand."
It was actually Air NZ's misguided decision to exercise its pre-emptive right to buy News Limited's 50 per cent stake in Ansett that changed Eddington's life and tipped him into the boss's chair at BA.
Had the Singapore deal gone ahead, he had promised former SIA chief executive Cheong Choong Kong he would remain at Ansett for at least two years.
"I'd given them my commitment and I would have kept it happily because I had spent a lot of effort and energy at Ansett strengthening its balance sheet and getting the business back on an even keel," he says.
Eddington is now in his fourth year at BA, happily living with his wife and two young children in a village west of Heathrow Airport.
He keeps close contact with Australians and Australia, watching the weekly Aussie Rules highlights for his beloved Fremantle Dockers and visiting his mother and sisters in Western Australia at least once year.
The visits to the placid waters and white beaches of Geographe Bay have proved a sanctuary during the 53-year-old former nuclear engineer's baptism of fire at BA.
He took the helm of an ailing BA in May 2000 and quickly found himself grounding the flagship Concordes after the Air France disaster in Paris. The airline was subsequently buffeted by foot and mouth disease in the UK, the September 11 terrorist attacks, SARS and the Iraq war. More recently, a wildcat strike left thousands of passengers stranded, cost the airline £40 million ($100 million) and forced Eddington to issue a public apology.
BA also faced some of the toughest competition in the industry in an overcrowded European market with low-cost terriers Easyjet and Ryanair snapping at its heels.
But the BA boss has offset a tough external environment by doing to the British carrier what he started to do at Ansett cutting costs, focusing on core operations and trying to strengthen the balance sheet.
Since September 11, BA has shed 11,000 staff mainly through natural attrition and cut costs by about £1 billion as part of a Future Size & Shape project aimed at bringing it back from the abyss of record losses.
True, the British flag carrier is still in the red and recently recorded a first-quarter pre-tax loss of £45 million. But this included a write-off of almost £80 million from the sale of subsidiary Deutsche BA and Eddington takes some consolation in an operating profit of about £40 million, positive cash flow and a 4.5 per cent drop in unit costs.
One analyst recently applauded BA as "the best recovery story in the sector".
Eddington was earlier this year named the industry's top executive by the International Air Transport Association in recognition of his efforts.
Eddington admits it has been hard work but says BA was lucky to have started addressing the problems as early it did. If it had started 12 months later, he says, the airline would have been in big trouble.
"We were able to take our costs down more quickly than our revenue (fell)," he says. "When I arrived we had debt of £7 billion and we've got it down to £5 billion."
Although some airline figures believe the industry has turned the corner after SARS and Iraq, they have yet to convince a sceptical Eddington.
"It's still going to be a very tough 12 months and maybe longer," he says. "What most European carriers are saying, and we're certainly saying, is that revenue in not going to save anybody in the short term. So you are just going to have to look hard and make sure your cost base is competitive."
The BA executive, who is also chairman of the Association of European Airlines, is also keeping a close eye on potential industry shake-outs.
He agrees with the conventional wisdom that the industry is far too fragmented and needs to consolidate. However, he believes the desire by governments to retain national carriers and problems with unravelling the bilateral system of air services agreements means the process will be slower than many think and that the signs so far are mixed.
He applauds as positive moves to allow Brussels to negotiate on behalf of all European airlines, but sees moves by the US Government to bail out troubled carriers in the wake of September 11 as "the ultimate irony".
"There are much better things for governments to do with taxpayer money than bail out failing airlines," he says.
As to BA's plans, Eddington confirms the British carrier is strengthening ties with European oneworld partner Iberia the Spanish flag carrier in which it has a 10 per cent stake but says it is not considering a merger. Instead, the relationship will be similar to the Qantas investment, where BA has board seats and an equity interest but does not interfere with local management.
The airline is also being more selective about when and where it takes on low-cost carriers such as Ryanair.
Eddington will not take on the no-frills operators at their own game, saying there has never been a case of an operator successfully running a no-frills carrier and full service airline in the same family. BA tried a no-frills strategy with Go, but sold the fledgling airline when it discovered it was cannibalising BA sales.
He believes there is nothing stopping full service operators holding key short-haul markets. But this means keeping an eye on costs and revenue margins.
=======================================
Moderate, Modest & Mild.
Precisely what does "Skippy" think he's going to achieve by stating this 2 years down the track?
It is only going to create a great deal more anguish for a lot of ex-AN people who have yet to find work, and again stir up a lot of anti-ANZ/Kiwi sentiment amongst Aussies.
If he felt so strongly about it, why didn't he speak up back then?!
It is only going to create a great deal more anguish for a lot of ex-AN people who have yet to find work, and again stir up a lot of anti-ANZ/Kiwi sentiment amongst Aussies.
If he felt so strongly about it, why didn't he speak up back then?!
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"Skippy" has a habit of bailing out before the aircraft runs into difficulties or crashes. Anyone can be wise with hindsight and as to AN surviving under SQ I guess pigs can also fly, or you dont know how SQ operate. AN a formerly great airline, was raped by its owners and inept managers at all levels, and terminally ill. I suspect Skippy saw the writing on the wall. 
"Jack the ripper fely sorry for his victims"
Sorry, before the English teachers get to me, I meant FELT !!
Sorry, before the English teachers get to me, I meant FELT !!
