Why the Ansett deal must fly
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Why the Ansett deal must fly
Sun "Sunday Telegraph"
Why the Ansett deal must fly
27jan02. .Tuesday is decision time for Ansett creditors, staff and frequent flyers. And there is only one decision. There is no alternative but to tick off the sale of Ansett to Solomon Lew and Lindsay Fox -- even though that tick could still end up returning the big zip to all creditors other than staff. . .And even though, in a worst-case scenario, even departing staff might not get their full entitlements, while those who continue with the new Ansett could find some of their entitlements at risk.
And even though there is certainly no guarantee that the new Ansett will "fly" -- figuratively, in commercial terms, or ultimately, in aviation terms.
The reason to just say "yes", is simple: the options other than a Lew-Fox takeover are worse.
There are, in fact, only two other options: liquidation, or a much smaller sale to Dick Branson's Virgin Blue and Chris Corrigan's Lang Corporation.
Liquidation would yield hundreds of millions less than the Lew-Fox sale, wiping out any chance of any return for creditors and turning any frequent-flyer points into toilet wallpaper.
After all, you cannot have any sort of frequent-flyer scheme without an airline.
Lew and Fox are not -- appropriately -- going to honour the old Ansett's points. However, they do intend to offer something to point holders. But only if they have an airline.
The time for liquidation was back in September.
That was before the Two Marks -- administrators Mentha and Korda -- spent arguably $200 million-plus to get the planes back into the air.
They say that generated more value than it cost.
But regardless of whether they are right, liquidation today would produce less than it would have four months ago.
A sale to Virgin-Lang is similar. They propose taking dramatically fewer staff, so more people would be sacked upfront, significantly increasing the cost of payouts and reducing -- eliminating -- any possibility of a return to other creditors.
The Two Marks may be taken to task on two levels.
First, they did not move to an immediate liquidation. It might have been fun playing airlines, but did it make sense?
Second, they did not force Lew-Fox to give creditors some equity upside in the new Ansett -- say, one share for every $100 of debt.
That said, there really is not going to be any equity upside. At least not in the early days.
The new Ansett is going to burn money, as if it were flying on $100 bills, not aviation fuel.
The opportunity to buy in may arise a few months on, although it will be a race between the moment to invest and the inevitable merger of Ansett and Virgin Blue.
None of this is really about rebuilding Ansett.
Ultimately, it is all about determining the relative positions of strength -- or, perhaps more accurately, weakness -- for when Lew and Fox get down to hard-knuckle negotiating with Branson and Corrigan.
Why the Ansett deal must fly
27jan02. .Tuesday is decision time for Ansett creditors, staff and frequent flyers. And there is only one decision. There is no alternative but to tick off the sale of Ansett to Solomon Lew and Lindsay Fox -- even though that tick could still end up returning the big zip to all creditors other than staff. . .And even though, in a worst-case scenario, even departing staff might not get their full entitlements, while those who continue with the new Ansett could find some of their entitlements at risk.
And even though there is certainly no guarantee that the new Ansett will "fly" -- figuratively, in commercial terms, or ultimately, in aviation terms.
The reason to just say "yes", is simple: the options other than a Lew-Fox takeover are worse.
There are, in fact, only two other options: liquidation, or a much smaller sale to Dick Branson's Virgin Blue and Chris Corrigan's Lang Corporation.
Liquidation would yield hundreds of millions less than the Lew-Fox sale, wiping out any chance of any return for creditors and turning any frequent-flyer points into toilet wallpaper.
After all, you cannot have any sort of frequent-flyer scheme without an airline.
Lew and Fox are not -- appropriately -- going to honour the old Ansett's points. However, they do intend to offer something to point holders. But only if they have an airline.
The time for liquidation was back in September.
That was before the Two Marks -- administrators Mentha and Korda -- spent arguably $200 million-plus to get the planes back into the air.
They say that generated more value than it cost.
But regardless of whether they are right, liquidation today would produce less than it would have four months ago.
A sale to Virgin-Lang is similar. They propose taking dramatically fewer staff, so more people would be sacked upfront, significantly increasing the cost of payouts and reducing -- eliminating -- any possibility of a return to other creditors.
The Two Marks may be taken to task on two levels.
First, they did not move to an immediate liquidation. It might have been fun playing airlines, but did it make sense?
Second, they did not force Lew-Fox to give creditors some equity upside in the new Ansett -- say, one share for every $100 of debt.
That said, there really is not going to be any equity upside. At least not in the early days.
The new Ansett is going to burn money, as if it were flying on $100 bills, not aviation fuel.
The opportunity to buy in may arise a few months on, although it will be a race between the moment to invest and the inevitable merger of Ansett and Virgin Blue.
None of this is really about rebuilding Ansett.
Ultimately, it is all about determining the relative positions of strength -- or, perhaps more accurately, weakness -- for when Lew and Fox get down to hard-knuckle negotiating with Branson and Corrigan.
Moderate, Modest & Mild.
A poorly written article that doesn't offer any REAL reasons as to "Why the Ansett deal must fly"!
[quote]Liquidation would yield hundreds of millions less than the Lew-Fox sale, wiping out any chance of any return for creditors....<hr></blockquote>
Once the FLEW deal goes through, the most valuable assets - terminal space, buildings, and real estate - will quickly be stripped from Ansett the airline, and transferred to other "non-related" companies, thereby giving creditors NOTHING as collateral in any form.
[quote].....and turning any frequent-flyer points into toilet wallpaper.<hr></blockquote>
They've ALREADY done that! As a matter of fact most of the people holding Ansett Frequent Flyer points would undoubtedly be better off receiving the value of their FF points in SORBENT, than the cr@p being offered!
[quote]...they (the two Marks) did not force Lew-Fox to give creditors some equity upside in the new Ansett -- say, one share for every $100 of debt.
That said, there really is not going to be any equity upside. At least not in the early days.<hr></blockquote>
By transferring ALL of the REAL ASSETS away from Ansett, FLEW have indicated that the airline is never going to hold any equity, not in the early days - not ever.. .Basically, they will be able to close the doors and walk away any time they desire!
[quote]The new Ansett is going to burn money, as if it were flying on $100 bills, not aviation fuel.<hr></blockquote>
...if you think Virgin Blue's recent rash of near giveaway tickets have been revenue-negative, wait for Ansett Mk3's foray into Oz aviation - the first few months are going to see a frenzied "swim or sink" splash by AN, as it attempts to attract passengers to the detriment of financial gain.
[quote]The opportunity to buy in may arise a few months on, although it will be a race between the moment to invest and the inevitable merger of Ansett and Virgin Blue.<hr></blockquote>
Why would Virgin Blue WANT to merge with Ansett?. .Unless the acquisiton of terminal space were a pre-condition of the deal, Virgin has ABSOLUTELY nothing to gain by merging with another company (Ansett) that operates a non-compatable aircraft type over an existing route structure.. .Virgin Blue merging with Ansett would only mean VB acquiring unwanted dead wood, in the form of extra staff and old, leased Airbus aircraft.
[quote]None of this is really about rebuilding Ansett.
Ultimately, it is all about determining the relative positions of strength -- or, perhaps more accurately, weakness -- for when Lew and Fox get down to hard-knuckle negotiating with Branson and Corrigan.<hr></blockquote>
The "hard-knuckle" negotiations are going to be for extra terminal space for Virgin Blue - and THAT will NOT be held in Ansett's name!
[ 26 January 2002: Message edited by: Kaptin M ]</p>
[quote]Liquidation would yield hundreds of millions less than the Lew-Fox sale, wiping out any chance of any return for creditors....<hr></blockquote>
Once the FLEW deal goes through, the most valuable assets - terminal space, buildings, and real estate - will quickly be stripped from Ansett the airline, and transferred to other "non-related" companies, thereby giving creditors NOTHING as collateral in any form.
[quote].....and turning any frequent-flyer points into toilet wallpaper.<hr></blockquote>
They've ALREADY done that! As a matter of fact most of the people holding Ansett Frequent Flyer points would undoubtedly be better off receiving the value of their FF points in SORBENT, than the cr@p being offered!
[quote]...they (the two Marks) did not force Lew-Fox to give creditors some equity upside in the new Ansett -- say, one share for every $100 of debt.
That said, there really is not going to be any equity upside. At least not in the early days.<hr></blockquote>
By transferring ALL of the REAL ASSETS away from Ansett, FLEW have indicated that the airline is never going to hold any equity, not in the early days - not ever.. .Basically, they will be able to close the doors and walk away any time they desire!
[quote]The new Ansett is going to burn money, as if it were flying on $100 bills, not aviation fuel.<hr></blockquote>
...if you think Virgin Blue's recent rash of near giveaway tickets have been revenue-negative, wait for Ansett Mk3's foray into Oz aviation - the first few months are going to see a frenzied "swim or sink" splash by AN, as it attempts to attract passengers to the detriment of financial gain.
[quote]The opportunity to buy in may arise a few months on, although it will be a race between the moment to invest and the inevitable merger of Ansett and Virgin Blue.<hr></blockquote>
Why would Virgin Blue WANT to merge with Ansett?. .Unless the acquisiton of terminal space were a pre-condition of the deal, Virgin has ABSOLUTELY nothing to gain by merging with another company (Ansett) that operates a non-compatable aircraft type over an existing route structure.. .Virgin Blue merging with Ansett would only mean VB acquiring unwanted dead wood, in the form of extra staff and old, leased Airbus aircraft.
[quote]None of this is really about rebuilding Ansett.
Ultimately, it is all about determining the relative positions of strength -- or, perhaps more accurately, weakness -- for when Lew and Fox get down to hard-knuckle negotiating with Branson and Corrigan.<hr></blockquote>
The "hard-knuckle" negotiations are going to be for extra terminal space for Virgin Blue - and THAT will NOT be held in Ansett's name!
[ 26 January 2002: Message edited by: Kaptin M ]</p>
Moderate, Modest & Mild.
If that was a Terry McCrann article, I am surprised! . .The quality of writing was exceptionally poor, and the whole article had no real substance to it - unlike some of his articles written during the dispute (to which Boeing Belly was inferring, for those of you who have said, "Oh no, not 1989 AGAIN!!"), which were factual, hard-hitting, and informative.
Moderate, Modest & Mild.
Well BB, I can assure you unreservedly, that Terry McCrann and I have never had anything going.
The truth is simply that I thought THIS article - whether written by Terry McCrann or anyone else - not convincing, nor forthcoming with any support for the statement.. .I guess everyone has his "good" and "bad" days, and if this is one of Mr McCrann's articles, to my mind it wasn't written on one of his better days.
So BB, do YOU have any comment on the article itself?
The truth is simply that I thought THIS article - whether written by Terry McCrann or anyone else - not convincing, nor forthcoming with any support for the statement.. .I guess everyone has his "good" and "bad" days, and if this is one of Mr McCrann's articles, to my mind it wasn't written on one of his better days.
So BB, do YOU have any comment on the article itself?
