A dingo stole my airline
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A dingo stole my airline
From the Christchurch Press.
Probably better if I put up a post rather than attempt to reply to one.
The dingo stole our airline
06 October 2001
Air New Zealand has flown full circle: 12 years after privatisation the airline is returning to public ownership as the taxpayer picks up the tab for the biggest loss in our corporate history. How did it come to this? Colin Espiner untangles the web of intrigue that surrounds the purchase of Ansett Australia – the dingo that brought down our airline.
Gordon McAdam is hopping mad. The owner of 6300 Air New Zealand shares, he has seen the value of his investment slide from $12,000 two years ago to less than $2000 at the airline's current share price.
The semi-retired Christchurch investor is taking the loss on the chin – he's made a tidy profit over the years from his share portfolio, and believes in the adage that you don't risk money you can't afford to lose. What makes him so mad, however, is how his airline has been brought to its knees and is now fighting for its survival.
He is in no doubt who's responsible: "We've been screwed by Australia Incorporated.
"Those Aussies keep underarm bowling us. And we just keep on taking it. Why isn't Ansett back up and flying again? Because it's a dog. And dogs don't fly."
So incensed was he by the histrionics of the Australian unions when Ansett folded two weeks ago that he rang the Australian television networks to complain about their footage of angry, anti-Kiwi Ansett workers demanding revenge for us trashing their airline.
"We had to agree to disagree," he says, "but I got my point across".
What point? Wasn't the crashing of Ansett Australia and Air NZ's consequent $1.4 billion loss a classic case of a Kiwi corporate cock-up? A cut-and-dried "Honey I shrunk the airline"? After all, Air NZ wrested control of Ansett from an Australian company, News Corporation, less than two years ago, and everything was all right until then. Wasn't it?
No. In reality, the Australian Government, the airline's previous owners, its managers, and the Ansett workforce are among the culprits in the witch-hunt for answers that is still continuing. McAdam is not saying the directors of Air NZ shouldn't carry the can for turning a company whose net worth tipped $2 billion in 1999 into a financial wreck now worth some $280 million and with debts of over $4b. He's more than happy to see the back of major shareholder Brierley Investments (BIL), which controlled most of the seats on the airline's board, as soon as possible.
It's abundantly clear, however, that Air NZ didn't just buy a pup when it paid $A580m plus 10 per cent in shares for the second half of Ansett Australia in February 2000 – it bought a fully fledged, 100 per cent Australian dingo. But ask why Air NZ bought it, why they paid so much, and why they were unable to turn the foundering carrier around and one enters a world of politics, ego, arrogance, and ambition. Welcome to the world of aviation.
Air New Zealand was born in 1965 out of Tasman Empire Airways, the Government-owned trans-Tasman carrier, and merged with National Airways Corporation, the domestic operation, in 1978.
Ten years later, Air New Zealand was sold by the Lange-Douglas Labour government, amid controversy. Originally planned as a 25 per cent float, it was aborted and reinstated as a 100 per cent offer, supposedly because Sir Roger Douglas wanted to achieve his $2 billion asset sales target for the 1988-89 year, and after the incoming Labour government promised not to sell any of it.
Then, while Treasury recommended selling to British Airways, Cabinet decided on a consortium led by BIL (60 per cent), plus Qantas (25 per cent), Japan Airlines (7.5 per cent), and American Airlines (7.5 per cent). Together the shareholders paid $660m – a bargain-basement price.
The result, says Air NZ's chief executive at the time, Jim Scott, was not a happy marriage.
"They were difficult times. We were a government department. We had floors and floors of people there to answer the Government's questions.
"Everything was political – where we flew, when we flew. Along comes BIL with a reputation as an asset-stripper and you have a lot of forces pulling in different directions.
"BIL and Qantas had some differences of opinion with management. In fact, everybody who was a significant shareholder presumed they knew what was best. They tended to see themselves as the owners and us as the operators. It was very much a them-and-us situation."
By the time Qantas sold its shares in 1997 for a $120m profit, Air NZ was a vastly different company to the one it had bought into. With BIL leading the way at what it did best – trimming fat – Air NZ shed more than 3000 staff, formed itself into business units and, under the guidance of Scott and his successor Jim McCrea, turned the airline's focus onto inbound tourism.
Air NZ turned a $100m profit in its first full year of private ownership, made $61m the next, lost almost $20m in 1991, and then climbed to a peak of $286m profit in the mid '90s. Operating profits then halved from 1995 to 1998 and return on shareholders' funds plunged from 20.4 per cent to 7.3 per cent.
But it was still making money. In 1991, Air NZ was flying 4.8 million passengers a year. By the time it fully bought Ansett in 2000, it was carrying 7.8 million. Seat capacity had doubled, as did revenue passenger kilometres.
While costs were down and more people were flying on the airline, there was only so much business Air NZ could do without looking across the Tasman.
Since the days of Norman Geary, Air NZ's general manager during the early '80s, Air NZ had been negotiating for rights to fly within Australia, but without success. This was despite a wholly Australian-owned airline, Ansett New Zealand, flying our skies since 1987 – granted permission by the New Zealand Government without a quid pro quo.
The Australian Government, while pocketing dividends it made from Qantas's Air NZ shareholding, was well aware of the head start the privatised Air NZ had made over its own carriers, Qantas and Australian Airlines.
In 1994, days before a single aviation market took effect that would have given Air NZ the same access to Australia that Ansett New Zealand enjoyed here, Canberra cancelled the deal.
The Brereton Fax, as it is now known, (Transport Minister Laurie Brereton faxed his New Zealand counterpart Maurice Williamson with the news the deal was off) arrived just as Qantas was about to enter a crucial share float.
Air NZ then attempted to buy a stake in Qantas itself but lost out to British Airways. It then offered the Australian Government $400m for domestic carrier Australian Airlines. The Government opted for Qantas's offer of the same amount – essentially selling the airline to itself.
In 1996, Air NZ took the only option it had left – buying 50 per cent of another Australian carrier, Ansett, for $A540m, although management control and most of the seats on its board remained in the hands of its Australian owners, News Corporation.
So far so good. Ansett was a good buy because along with Qantas it operated a duopoly within Australia, with almost 90 per cent of all passenger air traffic. This protected situation didn't change until Air NZ made its ill-fated purchase of the second half of Ansett early in 2000. Then, with Ansett out of Australian ownership, the Australian Government relaxed its protectionist policies, allowing cut-price competitors Impulse and Virgin Blue into the domestic market.
The entry of Virgin Blue in particular proved catastrophic for the Air NZ-owned Ansett, which was simply not equipped to compete with a low-cost carrier. According to Air NZ documents obtained by The Press, Ansett's market share fell from 54 per cent to 39 per cent within a year. Eighty-five per cent of Virgin and Impulse's business came from Ansett. Ansett's results for the year ended December 2000 were down 70 per cent.
Those who work at Air NZ – staff, management, and members of the board – are bitter at the treatment meted out to the airline by the Australian Government. An Air NZ director, who spoke to The Press on the condition of anonymity, says: "We made an assumption that was one bridge too far, no-one can dispute that. But the Australian Government's shifting of the goalposts made life extremely difficult.
"They created an utterly impossible trading environment for this company ... the malign attitude, or at least indifference, of the Australian Government made life extremely difficult for Air New Zealand."
Dick Smith, electronics entrepreneur and a former chairman of Australia's Civil Aviation Safety Authority, says Ansett managers could have saved over $A1b by supporting reforms of Australia's aviation industry, and that both Ansett and Qantas were highly inefficient and resistant to change.
"Instead of enthusiastically adopting reform, the managements of Ansett and Qantas chose to raise fares and slug the public," Smith says.
"They had a complete lack of understanding about the need for reform. I had meetings with the most senior managers of the airlines and explained that if the highly unionised, very expensive air-traffic control and regulatory systems Australia has had in place since the 1940s remained, they simply would not have a business in the future.
"I think all they have wanted to do was go back to the good old days of a comfortable two-airline policy. Now, through their stupidity, they have gone one better."
Jim Scott points out that no-one forced Air NZ to try to do business in Australia. "We all know the Australian market is difficult: less flexible, more regulated. You hope that will change, but you don't rely on it."
As far as Scott is concerned, the Air NZ board has no-one but itself to blame for its current predicament: "All the comments I hear sound more like excuses than answers.
"People are saying Air NZ was unlucky, but the other side of the coin is that they failed to make the necessary management changes and then got caught by a series of tidal waves, and they weren't able to respond."
Tidal waves, bolts from the blue – whatever your metaphor, Air NZ was certainly struck by a series of calamities soon after buying the rest of Ansett. But were they really acts of God? Didn't the Air NZ board know what it was getting into? And, if it did, why on earth did it buy a dingo like Ansett?
At this point we should look at the Air New Zealand board – a collection of famous faces from New Zealand business, including the heads of the Business Roundtable and several banks – and ask, as Deputy Prime Minister Jim Anderton did, whether they should be entrusted with the stewardship of a corner dairy, let alone our national carrier.
Since its privatisation in 1989, BIL has been at the helm of Air NZ. The board's chairmen, until acting chair Jim Farmer was appointed earlier this year, were from BIL.
For much of Air NZ's corporate history, former BIL chairman Bob Matthew and Sir Selwyn Cushing (also BIL chairman) ruled the roost together, Matthew as Air NZ chairman and Sir Selwyn as his deputy. Sir Selwyn took over in June 1998. He was also a member of Ansett's board, from the time Air NZ bought into Ansett in 1996.
Other BIL members have included former chief executive Paul Collins (retired 2000), who presided over that company's vast losses in Thistle Hotels and was paid $5.4m when his contract was terminated. Philip Burdon was a BIL director; another, Bill Wilson, is chairman of BIL NZ Assets. BIL's chief executive, Greg Terry, was also on the board. Why is this relevant? Market watchers euphemistically say that BIL was not "a good fit" in the airline industry. It has tended to make its money as a short-term investor, an asset-stripper, a company that buys other companies and flicks them on for a profit. It is not known as a company that likes to pour capital in once it has bought an asset. But airlines generally like long-term shareholders who don't mind putting their hands in their pockets.
"BIL were New Zealand's change managers," says Jim Scott. "Whenever they got involved with companies the rate of change was enormous. They had the ability to shake up a company, and they were very good at stripping the fat out. They were always trying to push through strategies that would make short-term gains so they could get out. But that's not a very good strategy for running an airline."
It's difficult to find a broker who will be quoted on the record about BIL. Off the record most are scathing: descriptions range from "good in its day, dead from the mid-'90s" to "the absolute worst investor in the universe". True, BIL lost millions of dollars of shareholders' funds in ventures such as Molokai Ranch in Hawaii and the British-based hotel chain Thistle. But it has also made millions buying in and selling quickly for a profit: Skellerup, Wilson and Horton, Carter Holt Harvey, and Sky City are all examples.
So what stopped BIL doing the same with Air NZ? Until the mid-'90s the returns were good. And when the share price was high, there were few New Zealanders ready or able to pay what BIL wanted for its stake. BIL was also chasing Ansett as a means of raising the value of its stake. It knew Singapore Airlines was interested in buying Ansett, but if Air NZ got there first, SIA would have to buy into Air NZ instead.
Which is exactly what happened. BIL sold SIA a 17 per cent stake in Air NZ at $3 a share, immediately after Air NZ finished purchasing Ansett. To do so, Air NZ paid almost 40 per cent above what SIA had offered. BIL made a healthy profit on the transaction but has suffered along with other shareholders since. Last month BIL declared a loss of $271m for the year, including a write-down of $420m on the value of its remaining Air NZ shares.
All of which brings us to the question of due diligence. Acting chairman Jim Farmer has admitted the board did not have a proper look at Ansett's books but says it was forced to make the deal in a hurry because of pressure from Singapore Airlines.
This is despite the fact that, since Air NZ held a veto over any buyer of Ansett by way of its 50 per cent shareholding from 1996, no-one could take Ansett away without its say-so.
Macquarie Bank, Air NZ's adviser during the purchase, disagreed with the limited due diligence the company performed. Only BIL can answer whether the pressure to buy Ansett came from SIA or from BIL itself – and the company isn't talking. Sir Selwyn's office told The Press he was declining media requests for interviews on legal advice.
The resignations of Air NZ's first two chief executives of the corporate era also bear a BIL stamp. The two Jims, Scott (1988-1991) and McCrea (1991-2000), were known as a good team. Scott was the ideas man, McCrea the finisher. Scott rates McCrea "one of the best people I ever worked with" and believes McCrea could have steered Air NZ through the past 18 months intact.
Both Jims left Air NZ after disagreements with the board, and BIL in particular. On both occasions the chairman – first Matthews, then Cushing – ran the company for a lengthy interim period. But while Scott had an obvious successor in McCrea, the board was not so lucky second time around.
McCrea resigned from his $1.2m-a-year position just weeks after the purchase of the second half of Ansett went through. He won't say why, but The Press understands he left after finding out about an arrangement the board had reached with then Ansett chief executive Rod Eddington – that Eddington would replace McCrea as the new chief executive of the entire Air NZ/ Ansett group after one year.
The man who put the Ansett deal together and who had 44 years experience in the company walked; Eddington was offered the job of chief executive of British Airways. As one market analyst put it, that was "a no-brainer" for Eddington. Air NZ's board was left without a chief executive.
McCrea declined to be interviewed by The Press for this feature, saying he was still too close to Air NZ. But he did say the purchase of Ansett "could have, and should have, worked".
"It's taken an awful long time to get things done," he says. "Speed was of the essence, but speed did not occur. Am I surprised? Not necessarily."
In the event, Cushing hired Qantas No. 2 Gary Toomey to take McCrea's place. But Toomey was unable to start for almost six months. In the meantime, Cushing ran the airline himself. The hiatus was to prove crucial in Air NZ's failure over Ansett.
To say that Toomey and the clutch of Qantas executives he brought with him to Air NZ were thrown in the deep end is an understatement. In the words of one Air NZ staffer, Toomey was thrown a live hand grenade with the pin out.
The group's integration process was in tatters. Air NZ managers seconded to Melbourne were met with taunts of "F**k off Kiwi" when they attempted to suggest new ways of doing things.
"That attitude was right through the company (Ansett)," says an Air NZ manager involved in the project. "It was, `We're a great airline – **** off back to New Zealand.' The Kiwis were not welcome in Australia."
Air NZ had hoped to integrate the group's pilots but this also met a hostile response. Ansett pilots forced to attend a workshop with their Air NZ colleagues to discuss synergies within the group arrived wearing "Australian flying for Australian pilots" badges.
But while Toomey has since received death threats from Australians over the destruction of Ansett and may yet resign as Air NZ's CEO, insiders say it is impossible to blame him for the series of disasters that befell the airline this year. In fact, The Press has learned that in the nine months before Ansett folded Toomey cut $A120m from Ansett and identified $A500m more in potential savings.
He planned to slash 3000 jobs across the Tasman, including shifting the administration of Ansett's Global Rewards frequent-flier programme to Christchurch, where up to 500 jobs were to be created at Christchurch Technology Park.
He planned to cut Ansett pilots' pay, integrating their contract with Air NZ pilots on a new scale that would have seen pilots able to fly in either country. Ansett pilots' salaries would have been cut while Air NZ pilots would have received a slight increase.
Toomey also drew up a new fleet plan. Included were 19 additional aircraft for Ansett – mainly Boeing 767s and 747s, including five more jumbo jets for Ansett International, plus five more aircraft for Air NZ, and three more for its subsidiary, Freedom Air.
Toomey wanted to reduce the different types of aircraft Ansett flew, and to get rid of the carrier's troublesome old 767s. His plan hinged on the purchase of Australian cut-price carrier Virgin Blue. Toomey saw Air NZ expanding its own cut-price Freedom brand into Australia, using Virgin's network to operate a low-cost carrier in both countries.
The snag? New Air NZ shareholder Singapore Airlines had agreed to help pay for Ansett's fleet upgrade (with the first $1b due later this year) only if the Virgin purchase went through. Toomey spend six months negotiating with owner Richard Branson for the purchase of Virgin Blue for $250 million, only to have the theatrical Branson rip up what he claimed was Air NZ's cheque on national television. Ansett, Branson said, was "worth more dead than alive".
Toomey took no fewer than 16 plans for saving the Air NZ/Ansett group to the board. Yet the plan they selected – buying Virgin Blue – had no fallback option. As rumours of Ansett's financial problems grew, Air NZ was forced to disclose to the New Zealand Stock Exchange that Ansett was losing $A1.6m a day. The New Zealand Government refused to help bail out the group while Ansett remained attached, and on September 12 Ansett was placed in voluntary administration. The next day Air NZ wrote its entire investment off, declaring an annual loss of $1.4 billion – the biggest in New Zealand corporate history.
As the majority of Air NZ's board walks from the wreckage this week, passengers and taxpayers are left pondering how things have come full circle. Twelve years on from deregulation, the public is about to take a fresh stake in Air NZ, possibly as much as 80 per cent. Plans are afoot to cut routes, staff, and aircraft to deal with both the Ansett dingo and the global aviation slow-down caused by the terrorist attacks on America.
But we still have our national carrier – just. The airline is surviving on its cashflow, which is understood to be positive, although forward bookings have fallen considerably, particularly across the Tasman.
Scott says Air NZ will need to fight hard to regain its reputation and to ensure it is not marginalised by Qantas in the future. With the Government indicating it does not want to be a long term shareholder itself, the public should also beware a new attempt by the Aussie red tail to buy back in to our airline, he says.
"It was a dumb idea then and it's an even dumber idea now. We'd become the Tasmania of Australia."
Macquarie Bank analyst Arthur Lim is more optimistic. "One thing Air NZ can fall back on is its great reputation in the marketplace, earned over years and years. What it needs now is a balance sheet that can actually allow it to get through the next 18 months of turbulence."
As far as shareholder Gordon McAdam is concerned, what Air NZ needs now is a dose of nationalism, perhaps taking a leaf out of Australia's book. Fly your national carrier, he says. We're all shareholders now. Use it, or lose it. Ansett was overstaffed, its pilots overpaid, and its maintenance sloppy before Air NZ took over. Ansett Australia could have operated the same service on half the number of staff – 8000 instead of 16,000 – at the time it was put into voluntary administration.
Documents obtained by The Press show its workers were among the best rewarded in Australia. Its pilots cost $NZ91 million a year; Air NZ pilots flying the same routes and the same hours would have cost $58 million.
Particularly expensive were the company's Boeing 737 pilots – also the mainstay of the Ansett fleet. An Ansett Boeing 737 captain flying 70 hours a month (the industry norm) earned $NZ112,000 more than the New Zealand counterpart; an Ansett 767 captain earned $98,000 more, and a 747 captain $75,000 more. Over all, Ansett's fleet of 25 Boeing 737s cost the company 32 per cent more to fly than if Air NZ pilots had been in the cockpit.
Telephone surveys found waiting times to speak to an Ansett customer service representative peaked at 40 minutes. The airline's unions had set minimums of staff that could be on duty in airports. Some staff had more than 170 weeks of leave owing. Just before Air NZ's takeover of the company, all staff received an 8 per cent increase.
Ansett's financial reporting systems were so bad the airline did not know which of its routes were profitable. It operated no fewer than five different types of aircraft, including Boeing, Airbus, and British Aerospace-made planes. It had engineering bases for all aircraft types throughout Australia, each with engineers and workshops rated to work on each aircraft type. Its aircraft fleet was the second-oldest among the 50 biggest carriers.
Maintenance schedules appeared almost non-existent. Aircraft were regularly grounded after passing the limit of official tolerance (10 per cent) allowed by Australia's Civil Aviation Safety Authority (Casa) before essential maintenance was done.
Air NZ engineers say Ansett aircraft flown across the Tasman to the company's Christchurch workshops often arrived in poor condition – when their Australian counterparts agreed to release the work.
"They were flying outside the latitude (allowed by the CAA), they were flying them dangerously, and they weren't letting us repair them," one Air NZ engineer said. "When they did send one, it would arrive with seven Ansett engineers rather than just one. We had all these guys here on jollies, going skiing and basically wasting money."
On one occasion no fewer than 12 Ansett aircraft were required to have major scheduled servicing at the same time.
According to Air NZ records, the average turnaround for each service in Australia was 28 days. In New Zealand? Four days.
"Our aircraft were virtually gold-plated compared to some of the aircraft (from Ansett) we had to work on," the Air NZ engineer told The Press.
"The 767s shouldn't have been flying around – they were dangerous."
Certainly Casa had doubts about their airworthiness, grounding Ansett's entire 767 fleet in April after finding a series of irregularities in the company's maintenance procedures.
The groundings were a disaster for Ansett, costing the company at least $A20 million during the week aircraft sat on the tarmac. Worse, it did untold damage to the company's reputation and its market share, which never recovered.
Eyebrows have been raised about the nature and timing of Casa's actions. Why shut down Ansett on the eve of Easter, the longest public holiday? And how come Casa never had any concerns about Ansett's aircraft when they were in the hands of News Corporation?
"If they had been paid to deliberately sabotage the opportunity of this company to remedy some pretty slack management practices," one Air NZ insider says, "they could not have done it more effectively."
For good measure, average fuel costs for the airline rose from 1.7c per available seat kilometre to 2.2c in the past year, while the Australian dollar fell more than 10 per cent against the US – the currency of aviation.
As costs rose and revenue fell, Ansett booked operational losses of $1.6m a day since June, forcing Air NZ to write out a cheque for $180m just to cover loan payments and aircraft leases. Ansett collapsed owing its fellow business unit, the Christchurch engineering workshop, $6m for parts and labour.
This week, Air NZ agreed to pay Ansett's administrator $A150m and to write off a further $A160m in debt.
Probably better if I put up a post rather than attempt to reply to one.
The dingo stole our airline
06 October 2001
Air New Zealand has flown full circle: 12 years after privatisation the airline is returning to public ownership as the taxpayer picks up the tab for the biggest loss in our corporate history. How did it come to this? Colin Espiner untangles the web of intrigue that surrounds the purchase of Ansett Australia – the dingo that brought down our airline.
Gordon McAdam is hopping mad. The owner of 6300 Air New Zealand shares, he has seen the value of his investment slide from $12,000 two years ago to less than $2000 at the airline's current share price.
The semi-retired Christchurch investor is taking the loss on the chin – he's made a tidy profit over the years from his share portfolio, and believes in the adage that you don't risk money you can't afford to lose. What makes him so mad, however, is how his airline has been brought to its knees and is now fighting for its survival.
He is in no doubt who's responsible: "We've been screwed by Australia Incorporated.
"Those Aussies keep underarm bowling us. And we just keep on taking it. Why isn't Ansett back up and flying again? Because it's a dog. And dogs don't fly."
So incensed was he by the histrionics of the Australian unions when Ansett folded two weeks ago that he rang the Australian television networks to complain about their footage of angry, anti-Kiwi Ansett workers demanding revenge for us trashing their airline.
"We had to agree to disagree," he says, "but I got my point across".
What point? Wasn't the crashing of Ansett Australia and Air NZ's consequent $1.4 billion loss a classic case of a Kiwi corporate cock-up? A cut-and-dried "Honey I shrunk the airline"? After all, Air NZ wrested control of Ansett from an Australian company, News Corporation, less than two years ago, and everything was all right until then. Wasn't it?
No. In reality, the Australian Government, the airline's previous owners, its managers, and the Ansett workforce are among the culprits in the witch-hunt for answers that is still continuing. McAdam is not saying the directors of Air NZ shouldn't carry the can for turning a company whose net worth tipped $2 billion in 1999 into a financial wreck now worth some $280 million and with debts of over $4b. He's more than happy to see the back of major shareholder Brierley Investments (BIL), which controlled most of the seats on the airline's board, as soon as possible.
It's abundantly clear, however, that Air NZ didn't just buy a pup when it paid $A580m plus 10 per cent in shares for the second half of Ansett Australia in February 2000 – it bought a fully fledged, 100 per cent Australian dingo. But ask why Air NZ bought it, why they paid so much, and why they were unable to turn the foundering carrier around and one enters a world of politics, ego, arrogance, and ambition. Welcome to the world of aviation.
Air New Zealand was born in 1965 out of Tasman Empire Airways, the Government-owned trans-Tasman carrier, and merged with National Airways Corporation, the domestic operation, in 1978.
Ten years later, Air New Zealand was sold by the Lange-Douglas Labour government, amid controversy. Originally planned as a 25 per cent float, it was aborted and reinstated as a 100 per cent offer, supposedly because Sir Roger Douglas wanted to achieve his $2 billion asset sales target for the 1988-89 year, and after the incoming Labour government promised not to sell any of it.
Then, while Treasury recommended selling to British Airways, Cabinet decided on a consortium led by BIL (60 per cent), plus Qantas (25 per cent), Japan Airlines (7.5 per cent), and American Airlines (7.5 per cent). Together the shareholders paid $660m – a bargain-basement price.
The result, says Air NZ's chief executive at the time, Jim Scott, was not a happy marriage.
"They were difficult times. We were a government department. We had floors and floors of people there to answer the Government's questions.
"Everything was political – where we flew, when we flew. Along comes BIL with a reputation as an asset-stripper and you have a lot of forces pulling in different directions.
"BIL and Qantas had some differences of opinion with management. In fact, everybody who was a significant shareholder presumed they knew what was best. They tended to see themselves as the owners and us as the operators. It was very much a them-and-us situation."
By the time Qantas sold its shares in 1997 for a $120m profit, Air NZ was a vastly different company to the one it had bought into. With BIL leading the way at what it did best – trimming fat – Air NZ shed more than 3000 staff, formed itself into business units and, under the guidance of Scott and his successor Jim McCrea, turned the airline's focus onto inbound tourism.
Air NZ turned a $100m profit in its first full year of private ownership, made $61m the next, lost almost $20m in 1991, and then climbed to a peak of $286m profit in the mid '90s. Operating profits then halved from 1995 to 1998 and return on shareholders' funds plunged from 20.4 per cent to 7.3 per cent.
But it was still making money. In 1991, Air NZ was flying 4.8 million passengers a year. By the time it fully bought Ansett in 2000, it was carrying 7.8 million. Seat capacity had doubled, as did revenue passenger kilometres.
While costs were down and more people were flying on the airline, there was only so much business Air NZ could do without looking across the Tasman.
Since the days of Norman Geary, Air NZ's general manager during the early '80s, Air NZ had been negotiating for rights to fly within Australia, but without success. This was despite a wholly Australian-owned airline, Ansett New Zealand, flying our skies since 1987 – granted permission by the New Zealand Government without a quid pro quo.
The Australian Government, while pocketing dividends it made from Qantas's Air NZ shareholding, was well aware of the head start the privatised Air NZ had made over its own carriers, Qantas and Australian Airlines.
In 1994, days before a single aviation market took effect that would have given Air NZ the same access to Australia that Ansett New Zealand enjoyed here, Canberra cancelled the deal.
The Brereton Fax, as it is now known, (Transport Minister Laurie Brereton faxed his New Zealand counterpart Maurice Williamson with the news the deal was off) arrived just as Qantas was about to enter a crucial share float.
Air NZ then attempted to buy a stake in Qantas itself but lost out to British Airways. It then offered the Australian Government $400m for domestic carrier Australian Airlines. The Government opted for Qantas's offer of the same amount – essentially selling the airline to itself.
In 1996, Air NZ took the only option it had left – buying 50 per cent of another Australian carrier, Ansett, for $A540m, although management control and most of the seats on its board remained in the hands of its Australian owners, News Corporation.
So far so good. Ansett was a good buy because along with Qantas it operated a duopoly within Australia, with almost 90 per cent of all passenger air traffic. This protected situation didn't change until Air NZ made its ill-fated purchase of the second half of Ansett early in 2000. Then, with Ansett out of Australian ownership, the Australian Government relaxed its protectionist policies, allowing cut-price competitors Impulse and Virgin Blue into the domestic market.
The entry of Virgin Blue in particular proved catastrophic for the Air NZ-owned Ansett, which was simply not equipped to compete with a low-cost carrier. According to Air NZ documents obtained by The Press, Ansett's market share fell from 54 per cent to 39 per cent within a year. Eighty-five per cent of Virgin and Impulse's business came from Ansett. Ansett's results for the year ended December 2000 were down 70 per cent.
Those who work at Air NZ – staff, management, and members of the board – are bitter at the treatment meted out to the airline by the Australian Government. An Air NZ director, who spoke to The Press on the condition of anonymity, says: "We made an assumption that was one bridge too far, no-one can dispute that. But the Australian Government's shifting of the goalposts made life extremely difficult.
"They created an utterly impossible trading environment for this company ... the malign attitude, or at least indifference, of the Australian Government made life extremely difficult for Air New Zealand."
Dick Smith, electronics entrepreneur and a former chairman of Australia's Civil Aviation Safety Authority, says Ansett managers could have saved over $A1b by supporting reforms of Australia's aviation industry, and that both Ansett and Qantas were highly inefficient and resistant to change.
"Instead of enthusiastically adopting reform, the managements of Ansett and Qantas chose to raise fares and slug the public," Smith says.
"They had a complete lack of understanding about the need for reform. I had meetings with the most senior managers of the airlines and explained that if the highly unionised, very expensive air-traffic control and regulatory systems Australia has had in place since the 1940s remained, they simply would not have a business in the future.
"I think all they have wanted to do was go back to the good old days of a comfortable two-airline policy. Now, through their stupidity, they have gone one better."
Jim Scott points out that no-one forced Air NZ to try to do business in Australia. "We all know the Australian market is difficult: less flexible, more regulated. You hope that will change, but you don't rely on it."
As far as Scott is concerned, the Air NZ board has no-one but itself to blame for its current predicament: "All the comments I hear sound more like excuses than answers.
"People are saying Air NZ was unlucky, but the other side of the coin is that they failed to make the necessary management changes and then got caught by a series of tidal waves, and they weren't able to respond."
Tidal waves, bolts from the blue – whatever your metaphor, Air NZ was certainly struck by a series of calamities soon after buying the rest of Ansett. But were they really acts of God? Didn't the Air NZ board know what it was getting into? And, if it did, why on earth did it buy a dingo like Ansett?
At this point we should look at the Air New Zealand board – a collection of famous faces from New Zealand business, including the heads of the Business Roundtable and several banks – and ask, as Deputy Prime Minister Jim Anderton did, whether they should be entrusted with the stewardship of a corner dairy, let alone our national carrier.
Since its privatisation in 1989, BIL has been at the helm of Air NZ. The board's chairmen, until acting chair Jim Farmer was appointed earlier this year, were from BIL.
For much of Air NZ's corporate history, former BIL chairman Bob Matthew and Sir Selwyn Cushing (also BIL chairman) ruled the roost together, Matthew as Air NZ chairman and Sir Selwyn as his deputy. Sir Selwyn took over in June 1998. He was also a member of Ansett's board, from the time Air NZ bought into Ansett in 1996.
Other BIL members have included former chief executive Paul Collins (retired 2000), who presided over that company's vast losses in Thistle Hotels and was paid $5.4m when his contract was terminated. Philip Burdon was a BIL director; another, Bill Wilson, is chairman of BIL NZ Assets. BIL's chief executive, Greg Terry, was also on the board. Why is this relevant? Market watchers euphemistically say that BIL was not "a good fit" in the airline industry. It has tended to make its money as a short-term investor, an asset-stripper, a company that buys other companies and flicks them on for a profit. It is not known as a company that likes to pour capital in once it has bought an asset. But airlines generally like long-term shareholders who don't mind putting their hands in their pockets.
"BIL were New Zealand's change managers," says Jim Scott. "Whenever they got involved with companies the rate of change was enormous. They had the ability to shake up a company, and they were very good at stripping the fat out. They were always trying to push through strategies that would make short-term gains so they could get out. But that's not a very good strategy for running an airline."
It's difficult to find a broker who will be quoted on the record about BIL. Off the record most are scathing: descriptions range from "good in its day, dead from the mid-'90s" to "the absolute worst investor in the universe". True, BIL lost millions of dollars of shareholders' funds in ventures such as Molokai Ranch in Hawaii and the British-based hotel chain Thistle. But it has also made millions buying in and selling quickly for a profit: Skellerup, Wilson and Horton, Carter Holt Harvey, and Sky City are all examples.
So what stopped BIL doing the same with Air NZ? Until the mid-'90s the returns were good. And when the share price was high, there were few New Zealanders ready or able to pay what BIL wanted for its stake. BIL was also chasing Ansett as a means of raising the value of its stake. It knew Singapore Airlines was interested in buying Ansett, but if Air NZ got there first, SIA would have to buy into Air NZ instead.
Which is exactly what happened. BIL sold SIA a 17 per cent stake in Air NZ at $3 a share, immediately after Air NZ finished purchasing Ansett. To do so, Air NZ paid almost 40 per cent above what SIA had offered. BIL made a healthy profit on the transaction but has suffered along with other shareholders since. Last month BIL declared a loss of $271m for the year, including a write-down of $420m on the value of its remaining Air NZ shares.
All of which brings us to the question of due diligence. Acting chairman Jim Farmer has admitted the board did not have a proper look at Ansett's books but says it was forced to make the deal in a hurry because of pressure from Singapore Airlines.
This is despite the fact that, since Air NZ held a veto over any buyer of Ansett by way of its 50 per cent shareholding from 1996, no-one could take Ansett away without its say-so.
Macquarie Bank, Air NZ's adviser during the purchase, disagreed with the limited due diligence the company performed. Only BIL can answer whether the pressure to buy Ansett came from SIA or from BIL itself – and the company isn't talking. Sir Selwyn's office told The Press he was declining media requests for interviews on legal advice.
The resignations of Air NZ's first two chief executives of the corporate era also bear a BIL stamp. The two Jims, Scott (1988-1991) and McCrea (1991-2000), were known as a good team. Scott was the ideas man, McCrea the finisher. Scott rates McCrea "one of the best people I ever worked with" and believes McCrea could have steered Air NZ through the past 18 months intact.
Both Jims left Air NZ after disagreements with the board, and BIL in particular. On both occasions the chairman – first Matthews, then Cushing – ran the company for a lengthy interim period. But while Scott had an obvious successor in McCrea, the board was not so lucky second time around.
McCrea resigned from his $1.2m-a-year position just weeks after the purchase of the second half of Ansett went through. He won't say why, but The Press understands he left after finding out about an arrangement the board had reached with then Ansett chief executive Rod Eddington – that Eddington would replace McCrea as the new chief executive of the entire Air NZ/ Ansett group after one year.
The man who put the Ansett deal together and who had 44 years experience in the company walked; Eddington was offered the job of chief executive of British Airways. As one market analyst put it, that was "a no-brainer" for Eddington. Air NZ's board was left without a chief executive.
McCrea declined to be interviewed by The Press for this feature, saying he was still too close to Air NZ. But he did say the purchase of Ansett "could have, and should have, worked".
"It's taken an awful long time to get things done," he says. "Speed was of the essence, but speed did not occur. Am I surprised? Not necessarily."
In the event, Cushing hired Qantas No. 2 Gary Toomey to take McCrea's place. But Toomey was unable to start for almost six months. In the meantime, Cushing ran the airline himself. The hiatus was to prove crucial in Air NZ's failure over Ansett.
To say that Toomey and the clutch of Qantas executives he brought with him to Air NZ were thrown in the deep end is an understatement. In the words of one Air NZ staffer, Toomey was thrown a live hand grenade with the pin out.
The group's integration process was in tatters. Air NZ managers seconded to Melbourne were met with taunts of "F**k off Kiwi" when they attempted to suggest new ways of doing things.
"That attitude was right through the company (Ansett)," says an Air NZ manager involved in the project. "It was, `We're a great airline – **** off back to New Zealand.' The Kiwis were not welcome in Australia."
Air NZ had hoped to integrate the group's pilots but this also met a hostile response. Ansett pilots forced to attend a workshop with their Air NZ colleagues to discuss synergies within the group arrived wearing "Australian flying for Australian pilots" badges.
But while Toomey has since received death threats from Australians over the destruction of Ansett and may yet resign as Air NZ's CEO, insiders say it is impossible to blame him for the series of disasters that befell the airline this year. In fact, The Press has learned that in the nine months before Ansett folded Toomey cut $A120m from Ansett and identified $A500m more in potential savings.
He planned to slash 3000 jobs across the Tasman, including shifting the administration of Ansett's Global Rewards frequent-flier programme to Christchurch, where up to 500 jobs were to be created at Christchurch Technology Park.
He planned to cut Ansett pilots' pay, integrating their contract with Air NZ pilots on a new scale that would have seen pilots able to fly in either country. Ansett pilots' salaries would have been cut while Air NZ pilots would have received a slight increase.
Toomey also drew up a new fleet plan. Included were 19 additional aircraft for Ansett – mainly Boeing 767s and 747s, including five more jumbo jets for Ansett International, plus five more aircraft for Air NZ, and three more for its subsidiary, Freedom Air.
Toomey wanted to reduce the different types of aircraft Ansett flew, and to get rid of the carrier's troublesome old 767s. His plan hinged on the purchase of Australian cut-price carrier Virgin Blue. Toomey saw Air NZ expanding its own cut-price Freedom brand into Australia, using Virgin's network to operate a low-cost carrier in both countries.
The snag? New Air NZ shareholder Singapore Airlines had agreed to help pay for Ansett's fleet upgrade (with the first $1b due later this year) only if the Virgin purchase went through. Toomey spend six months negotiating with owner Richard Branson for the purchase of Virgin Blue for $250 million, only to have the theatrical Branson rip up what he claimed was Air NZ's cheque on national television. Ansett, Branson said, was "worth more dead than alive".
Toomey took no fewer than 16 plans for saving the Air NZ/Ansett group to the board. Yet the plan they selected – buying Virgin Blue – had no fallback option. As rumours of Ansett's financial problems grew, Air NZ was forced to disclose to the New Zealand Stock Exchange that Ansett was losing $A1.6m a day. The New Zealand Government refused to help bail out the group while Ansett remained attached, and on September 12 Ansett was placed in voluntary administration. The next day Air NZ wrote its entire investment off, declaring an annual loss of $1.4 billion – the biggest in New Zealand corporate history.
As the majority of Air NZ's board walks from the wreckage this week, passengers and taxpayers are left pondering how things have come full circle. Twelve years on from deregulation, the public is about to take a fresh stake in Air NZ, possibly as much as 80 per cent. Plans are afoot to cut routes, staff, and aircraft to deal with both the Ansett dingo and the global aviation slow-down caused by the terrorist attacks on America.
But we still have our national carrier – just. The airline is surviving on its cashflow, which is understood to be positive, although forward bookings have fallen considerably, particularly across the Tasman.
Scott says Air NZ will need to fight hard to regain its reputation and to ensure it is not marginalised by Qantas in the future. With the Government indicating it does not want to be a long term shareholder itself, the public should also beware a new attempt by the Aussie red tail to buy back in to our airline, he says.
"It was a dumb idea then and it's an even dumber idea now. We'd become the Tasmania of Australia."
Macquarie Bank analyst Arthur Lim is more optimistic. "One thing Air NZ can fall back on is its great reputation in the marketplace, earned over years and years. What it needs now is a balance sheet that can actually allow it to get through the next 18 months of turbulence."
As far as shareholder Gordon McAdam is concerned, what Air NZ needs now is a dose of nationalism, perhaps taking a leaf out of Australia's book. Fly your national carrier, he says. We're all shareholders now. Use it, or lose it. Ansett was overstaffed, its pilots overpaid, and its maintenance sloppy before Air NZ took over. Ansett Australia could have operated the same service on half the number of staff – 8000 instead of 16,000 – at the time it was put into voluntary administration.
Documents obtained by The Press show its workers were among the best rewarded in Australia. Its pilots cost $NZ91 million a year; Air NZ pilots flying the same routes and the same hours would have cost $58 million.
Particularly expensive were the company's Boeing 737 pilots – also the mainstay of the Ansett fleet. An Ansett Boeing 737 captain flying 70 hours a month (the industry norm) earned $NZ112,000 more than the New Zealand counterpart; an Ansett 767 captain earned $98,000 more, and a 747 captain $75,000 more. Over all, Ansett's fleet of 25 Boeing 737s cost the company 32 per cent more to fly than if Air NZ pilots had been in the cockpit.
Telephone surveys found waiting times to speak to an Ansett customer service representative peaked at 40 minutes. The airline's unions had set minimums of staff that could be on duty in airports. Some staff had more than 170 weeks of leave owing. Just before Air NZ's takeover of the company, all staff received an 8 per cent increase.
Ansett's financial reporting systems were so bad the airline did not know which of its routes were profitable. It operated no fewer than five different types of aircraft, including Boeing, Airbus, and British Aerospace-made planes. It had engineering bases for all aircraft types throughout Australia, each with engineers and workshops rated to work on each aircraft type. Its aircraft fleet was the second-oldest among the 50 biggest carriers.
Maintenance schedules appeared almost non-existent. Aircraft were regularly grounded after passing the limit of official tolerance (10 per cent) allowed by Australia's Civil Aviation Safety Authority (Casa) before essential maintenance was done.
Air NZ engineers say Ansett aircraft flown across the Tasman to the company's Christchurch workshops often arrived in poor condition – when their Australian counterparts agreed to release the work.
"They were flying outside the latitude (allowed by the CAA), they were flying them dangerously, and they weren't letting us repair them," one Air NZ engineer said. "When they did send one, it would arrive with seven Ansett engineers rather than just one. We had all these guys here on jollies, going skiing and basically wasting money."
On one occasion no fewer than 12 Ansett aircraft were required to have major scheduled servicing at the same time.
According to Air NZ records, the average turnaround for each service in Australia was 28 days. In New Zealand? Four days.
"Our aircraft were virtually gold-plated compared to some of the aircraft (from Ansett) we had to work on," the Air NZ engineer told The Press.
"The 767s shouldn't have been flying around – they were dangerous."
Certainly Casa had doubts about their airworthiness, grounding Ansett's entire 767 fleet in April after finding a series of irregularities in the company's maintenance procedures.
The groundings were a disaster for Ansett, costing the company at least $A20 million during the week aircraft sat on the tarmac. Worse, it did untold damage to the company's reputation and its market share, which never recovered.
Eyebrows have been raised about the nature and timing of Casa's actions. Why shut down Ansett on the eve of Easter, the longest public holiday? And how come Casa never had any concerns about Ansett's aircraft when they were in the hands of News Corporation?
"If they had been paid to deliberately sabotage the opportunity of this company to remedy some pretty slack management practices," one Air NZ insider says, "they could not have done it more effectively."
For good measure, average fuel costs for the airline rose from 1.7c per available seat kilometre to 2.2c in the past year, while the Australian dollar fell more than 10 per cent against the US – the currency of aviation.
As costs rose and revenue fell, Ansett booked operational losses of $1.6m a day since June, forcing Air NZ to write out a cheque for $180m just to cover loan payments and aircraft leases. Ansett collapsed owing its fellow business unit, the Christchurch engineering workshop, $6m for parts and labour.
This week, Air NZ agreed to pay Ansett's administrator $A150m and to write off a further $A160m in debt.
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Hey H F that's a great question. I've always wondered that when QF had it, always, for free (who else would you fly to & from OZ with?).
I have the awful feeling that D was made on this side of the Tas to give ANZ market share into/out of OZ, bl**dy expensive if you ask me!
[ 11 October 2001: Message edited by: Red under the Bed ]
I have the awful feeling that D was made on this side of the Tas to give ANZ market share into/out of OZ, bl**dy expensive if you ask me!
[ 11 October 2001: Message edited by: Red under the Bed ]
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Albatross,
I didn't read your entire post, but I get the gist of what you're saying.
Let me put you straight. Ansett has always made good profits, and has always had to prop up other lesser profit making concerns.
The profits went out of here to keep Air NZ afloat, but even our profits weren't sufficient. Toomey, just a couple of months ago, sold off aircraft and simulators and leased them back. Where did the capital raised go? That's it - across the Tasman to support the ailing Air NZ, and for why? It still fell in a hole and has had to bailed out by the Kiwi government.
I didn't read your entire post, but I get the gist of what you're saying.
Let me put you straight. Ansett has always made good profits, and has always had to prop up other lesser profit making concerns.
The profits went out of here to keep Air NZ afloat, but even our profits weren't sufficient. Toomey, just a couple of months ago, sold off aircraft and simulators and leased them back. Where did the capital raised go? That's it - across the Tasman to support the ailing Air NZ, and for why? It still fell in a hole and has had to bailed out by the Kiwi government.
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Did anyone else spot the extraordinary quote in the lead article on this thread? ”Air NZ had hoped to integrate the group's pilots but this also met a hostile response. Ansett pilots forced to attend a workshop with their Air NZ colleagues to discuss synergies within the group arrived wearing "Australian flying for Australian pilots" badges.
If the incident actually occurred, given the makeup of the senior ranks of the Ansett pilot workforce post 1989, I suspect the signs should have read “"Australian flying for Australian pilots, ya’ll.”
Where, I wonder, were those noble sentiments among the same group of Australian pilots in 1989-90?
Heroes, every one of ‘em (the senior AN pilots) – with very short, or should that be ‘selective?’ memories – a trait, judging by the ‘We wuz robbed’ screams now coming from across the Tasman - (selective memories) - shared by many Kiwis.
[ 11 October 2001: Message edited by: Wiley ]
If the incident actually occurred, given the makeup of the senior ranks of the Ansett pilot workforce post 1989, I suspect the signs should have read “"Australian flying for Australian pilots, ya’ll.”
Where, I wonder, were those noble sentiments among the same group of Australian pilots in 1989-90?
Heroes, every one of ‘em (the senior AN pilots) – with very short, or should that be ‘selective?’ memories – a trait, judging by the ‘We wuz robbed’ screams now coming from across the Tasman - (selective memories) - shared by many Kiwis.
[ 11 October 2001: Message edited by: Wiley ]
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Hey Schlong, in this part of the world that means 'Big D*ck', well chosen. Either read the post or leave it alone instead of regurgitating your preconceived notions of what screwed a great ozzie airline.
Even Ansett claimed to only have made a profit for about two out of the last 10 years, the two just before ANZ bought the 2nd 50%. Bit of creative accounting from Reddy Eddy I'd say. Makes you wonder who actually stripped the assets when, recalling the surprise about leased vs (formerly) owned aircraft when the administrator got in.
Even Ansett claimed to only have made a profit for about two out of the last 10 years, the two just before ANZ bought the 2nd 50%. Bit of creative accounting from Reddy Eddy I'd say. Makes you wonder who actually stripped the assets when, recalling the surprise about leased vs (formerly) owned aircraft when the administrator got in.
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Taken from Murdock's address in AD today.
" Mr Murdoch told shareholders Air NZ had blocked News Corp's bid
to expand Ansett overseas when it had been a shareholder.
"We knew very well that it had to expand, it had to expand
overseas and have US dollar earnings and foreign currency earnings," he
said.
"We had ambitions to take it on routes which we were entitled to
take, which certainly would have been profitable.
"At every point in that, Air New Zealand, as a 50 per cent
shareholder, blocked us."
I guess while this is no excuse for what's
been go'in on, if you don't feed the dingo,
it's gunna bite.
Max
" Mr Murdoch told shareholders Air NZ had blocked News Corp's bid
to expand Ansett overseas when it had been a shareholder.
"We knew very well that it had to expand, it had to expand
overseas and have US dollar earnings and foreign currency earnings," he
said.
"We had ambitions to take it on routes which we were entitled to
take, which certainly would have been profitable.
"At every point in that, Air New Zealand, as a 50 per cent
shareholder, blocked us."
I guess while this is no excuse for what's
been go'in on, if you don't feed the dingo,
it's gunna bite.
Max
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How? Only 3 directors on the Board & no management input.
From casual observation Ansett International grew quite a bit since '96 and were actually going to take over LAX-SYD-LAX from Air NZ in the summer time-table until some [miserable] american pointed out that the service was a NZ right not an Oz one. At one stage they were also going to get our RR powered B747-400s, or rumour had it.
Without specific and credible proof I'm going to consider his comments as "Well, he would say that, wouldn"t he?" material.
From casual observation Ansett International grew quite a bit since '96 and were actually going to take over LAX-SYD-LAX from Air NZ in the summer time-table until some [miserable] american pointed out that the service was a NZ right not an Oz one. At one stage they were also going to get our RR powered B747-400s, or rumour had it.
Without specific and credible proof I'm going to consider his comments as "Well, he would say that, wouldn"t he?" material.
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I should have added to the end of my last post: “The Kiwis ‘wuz robbed’ all right – but it wasn’t by Qantas or the Australian Government (who I don’t think are smart enough to have orchestrated such a plan).
You ‘wuz robbed’ by the man or men on the Air NZ Board who (for whatever reason), agreed to pay the ridiculous price Air NZ paid for the last 50% of the empty shell the previous owners had turned AN into over the last 20 years. (However the question must be asked: how can Air NZ now claim they didn’t know what a parlous financial state AN was in when they had already owned half of it for some years and therefore surely has full access to the books?)
There’s an old truism used by law enforcement agencies: follow the money trail. The guilty will usually be where the money went. Now where did all that money for the last 50% of AN go?
You ‘wuz robbed’ by the man or men on the Air NZ Board who (for whatever reason), agreed to pay the ridiculous price Air NZ paid for the last 50% of the empty shell the previous owners had turned AN into over the last 20 years. (However the question must be asked: how can Air NZ now claim they didn’t know what a parlous financial state AN was in when they had already owned half of it for some years and therefore surely has full access to the books?)
There’s an old truism used by law enforcement agencies: follow the money trail. The guilty will usually be where the money went. Now where did all that money for the last 50% of AN go?
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Mr Mcadam
another dopey investor,probably a pilot.Should have bought $12000 in QF shares,they`d be worth $30000 now.Our valiant Transport Minister surely did.
Out of interest,how does QF 737 pay compare to Air NZ/Freedom?Dixon could use Kiwi crews like he uses Impulse crews,on those unprofitable routes(milk runs between all those little Sth Pacific nations).Think we have found AirNZ`s new niche market when QF inevitably expands.
another dopey investor,probably a pilot.Should have bought $12000 in QF shares,they`d be worth $30000 now.Our valiant Transport Minister surely did.
Out of interest,how does QF 737 pay compare to Air NZ/Freedom?Dixon could use Kiwi crews like he uses Impulse crews,on those unprofitable routes(milk runs between all those little Sth Pacific nations).Think we have found AirNZ`s new niche market when QF inevitably expands.
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Lies,damned lies and statistics!
The APA were never "forced" to go to the integration meetings. My sources tell me the ANZ pilots( of which there are three distinct and separate groups) were the ones stalling the discussions because they wanted all the expansion and the APA pilots were trying to stop that. The Kiwis had the attitude that we took over you so we'll do all the flying thanks!.
In terms of the salaries, the Kiwi pilots on seeing the brevity of our contract and doing a few quick comparisons between attendee's determined that there wasn't really anything in it once all the Kiwi add ons were allowed for compared to the AN pilots purely hourly pay. By my calculation of the Kiwi 737 contract a pilot gets over 600nz extra for working an RDO. We got zero extra for that, only the normal hour rate.
The APA were never "forced" to go to the integration meetings. My sources tell me the ANZ pilots( of which there are three distinct and separate groups) were the ones stalling the discussions because they wanted all the expansion and the APA pilots were trying to stop that. The Kiwis had the attitude that we took over you so we'll do all the flying thanks!.
In terms of the salaries, the Kiwi pilots on seeing the brevity of our contract and doing a few quick comparisons between attendee's determined that there wasn't really anything in it once all the Kiwi add ons were allowed for compared to the AN pilots purely hourly pay. By my calculation of the Kiwi 737 contract a pilot gets over 600nz extra for working an RDO. We got zero extra for that, only the normal hour rate.
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Dasha.
Please read the rules to which agreed as a part of your posting rights.
W
[ 12 October 2001: Message edited by: Woomera ]
What does the truth hurt ?
Whinging South Sea Island Poms !
[ 13 October 2001: Message edited by: Dassha ]
Please read the rules to which agreed as a part of your posting rights.
W
[ 12 October 2001: Message edited by: Woomera ]
What does the truth hurt ?
Whinging South Sea Island Poms !
[ 13 October 2001: Message edited by: Dassha ]
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Two things I extracted from the article were that:
1) The Australians were fools for tearing up open skies and closing the door on Air NZ flying domestic in Oz when Ansett were already across the ditch.
2) The New Zealanders were fools for attempting to buy an airline they couldn't afford and didn't know how to run and especially when their Oz consultants told them to stay well away. (What do you pay consultants for?????)
As a bond trader once told me "there's a fool in every market if you can't see the fool it's because you are the fool...."
And now we are all the poorer for it.
1) The Australians were fools for tearing up open skies and closing the door on Air NZ flying domestic in Oz when Ansett were already across the ditch.
2) The New Zealanders were fools for attempting to buy an airline they couldn't afford and didn't know how to run and especially when their Oz consultants told them to stay well away. (What do you pay consultants for?????)
As a bond trader once told me "there's a fool in every market if you can't see the fool it's because you are the fool...."
And now we are all the poorer for it.
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Dassha,
This a very unsavory subject to get into and one I notice a few Aussies have brought up. Perhaps you might like to go to www.airsafe.com and check up on hull loss, accident rates of major Australian airlines and learn a thing or two.
This a very unsavory subject to get into and one I notice a few Aussies have brought up. Perhaps you might like to go to www.airsafe.com and check up on hull loss, accident rates of major Australian airlines and learn a thing or two.