Ansett - the real story (Terry McCrann)
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Ansett - the real story (Terry McCrann)
Sat "Herald Sun". .Ansett- the real story. .By TERRY McCRANN. .09feb02
ANSETT Mark II is bleeding at a rate of up to $500 million a year as ticket sales slump and income slows to a trickle.
. .Confidential Ansett documents seen by the Herald Sun show the airline is fighting desperately to stay in the air until the sale to Lindsay Fox and Solomon Lew is done. . .But the documents raise very serious doubts whether the airline could survive for long even after the sale.
Last night, the Herald Sun learned Mr Fox and Mr Lew had sought an urgent meeting with Richard Branson -- the controller of Virgin Blue. That meeting was overnight Friday.
A daily traffic sheet shows only 3200 passengers flew with Ansett on Wednesday. They generated just $311,000 for the airline. Thursday was slightly better. Some 3860 passengers flew, generating $380,000 .
With costs of nearly $2 million a day to keep Ansett's planes in the air, the airline would lose nearly $42 million this month, if those figures continued.
That would be much worse than the $24 million predicted by Ansett's administrators as they try desperately to finalise the sale.
In an effort to stem the bleeding, the administrators have a secret plan to slash 46 flights next week -- with more to come.
But according to the documents, next week's cuts will save just $241,000 -- leaving the airline still running deeply and unsustainably in the red. Almost every figure in the documents paints an extremely bleak picture of Ansett's position.
Ticket sales -- as opposed to tickets actually used -- seem healthier, at around $600,000 a day.
But even those numbers would see the airline losing more than $1.2 million a day -- an annual rate of more than $400 million.
Much worse, most of these tickets are $88 bargain-basement Melbourne-Sydney flights, sold on the Internet.
On Wednesday, 6455 tickets were sold -- just 1045 by phone and the vast bulk, 5410, on the Web. The great majority of the tickets -- 4738 - were $88 fares.
The combination means Ansett is selling virtually none of the sorts of tickets necessary to build a sustainable airline.
Ansett's ticket profile is that of a low-rent Virgin -- and it would be losing at least $200 on each ticket. Plus they could evaporate overnight.
Forward sales look even worse. At the start of the week, according to the documents, Ansett had total bookings of 104,506.
This was barely half the pre-Christmas peak of more than 202,000. The forward booking numbers had been sliding all January.
Crucially, only 40,822 of these forward bookings were for flights in March or later.
While that might sound reasonably high, a detailed analysis showed that daily bookings for flights on or after March 1 averaged just 2064, for $207,000 of revenue.
Again, the overwhelming bulk of these -- 1543 tickets -- were $88 bargain basement ones.
There is no way administrators Mark Mentha and Mark Korda could keep the planes flying for much longer when Ansett is bleeding so much red ink.
Especially as virtually the only customers the airline now has are opportunistic buyers of cheap -- loss-generating -- Web tickets.
[ 08 February 2002: Message edited by: Wirraway ]</p>
ANSETT Mark II is bleeding at a rate of up to $500 million a year as ticket sales slump and income slows to a trickle.
. .Confidential Ansett documents seen by the Herald Sun show the airline is fighting desperately to stay in the air until the sale to Lindsay Fox and Solomon Lew is done. . .But the documents raise very serious doubts whether the airline could survive for long even after the sale.
Last night, the Herald Sun learned Mr Fox and Mr Lew had sought an urgent meeting with Richard Branson -- the controller of Virgin Blue. That meeting was overnight Friday.
A daily traffic sheet shows only 3200 passengers flew with Ansett on Wednesday. They generated just $311,000 for the airline. Thursday was slightly better. Some 3860 passengers flew, generating $380,000 .
With costs of nearly $2 million a day to keep Ansett's planes in the air, the airline would lose nearly $42 million this month, if those figures continued.
That would be much worse than the $24 million predicted by Ansett's administrators as they try desperately to finalise the sale.
In an effort to stem the bleeding, the administrators have a secret plan to slash 46 flights next week -- with more to come.
But according to the documents, next week's cuts will save just $241,000 -- leaving the airline still running deeply and unsustainably in the red. Almost every figure in the documents paints an extremely bleak picture of Ansett's position.
Ticket sales -- as opposed to tickets actually used -- seem healthier, at around $600,000 a day.
But even those numbers would see the airline losing more than $1.2 million a day -- an annual rate of more than $400 million.
Much worse, most of these tickets are $88 bargain-basement Melbourne-Sydney flights, sold on the Internet.
On Wednesday, 6455 tickets were sold -- just 1045 by phone and the vast bulk, 5410, on the Web. The great majority of the tickets -- 4738 - were $88 fares.
The combination means Ansett is selling virtually none of the sorts of tickets necessary to build a sustainable airline.
Ansett's ticket profile is that of a low-rent Virgin -- and it would be losing at least $200 on each ticket. Plus they could evaporate overnight.
Forward sales look even worse. At the start of the week, according to the documents, Ansett had total bookings of 104,506.
This was barely half the pre-Christmas peak of more than 202,000. The forward booking numbers had been sliding all January.
Crucially, only 40,822 of these forward bookings were for flights in March or later.
While that might sound reasonably high, a detailed analysis showed that daily bookings for flights on or after March 1 averaged just 2064, for $207,000 of revenue.
Again, the overwhelming bulk of these -- 1543 tickets -- were $88 bargain basement ones.
There is no way administrators Mark Mentha and Mark Korda could keep the planes flying for much longer when Ansett is bleeding so much red ink.
Especially as virtually the only customers the airline now has are opportunistic buyers of cheap -- loss-generating -- Web tickets.
[ 08 February 2002: Message edited by: Wirraway ]</p>
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Sat "Daily Telegraph"
Ansett's running on empty . .By ANDREW PAPADATOS. .09feb02
CORPORATE Australia has shunned Solomon Lew and Lindsay Fox's revived Ansett. If the struggling airline does not quickly establish a loyalty program for travelling executives, Qantas will have locked it out of the lucrative executive travel market.
If it hasn't already.
These are the concerns raised by travel agents and aviation experts following The Daily Telegraph learning Ansett had only 100 business-class ticket bookings for February onwards as of the end of last month.
The paltry figure is likely to be causing unease for Ansett's administrators and its owners-in-waiting, the Tesna consortium of millionaires Solomon Lew and Lindsay Fox.
In return for a little more leg room, better food, maybe even a wider smile, airlines pocket fatter profits.
Big Business is big business.
And snaring a share of this market from Qantas will be crucial to Ansett's future – provided the Tesna deal does not collapse before the administrators hand over the airline.
"Ansett should reinstate the loyalty program for the corporate travellers as quickly as possible," said travel.com.au general manager of leisure Helen Demetriou.
"That would be one of the best things they could do for their business."
Ansett's would-be owners, Tesna, has already revealed that they have signed an agreement for the new Ansett to join the global airline loyalty program Star Alliance, which comprises 14 carriers.
The millionaire pair are in Europe to discuss the loyalty program at the moment.
They have already promised attractive deals for corporate accounts and say many chief executives were upset by the high Qantas fares in the weeks after Ansett crashed.
Both are hoping that the contracts Qantas has signed with corporations will not hold up once there are two large airlines bidding for the business market.
Mr Fox and Mr Lew are expected to offer its corporate travellers valet parking, lounges and all the other extras that are provided with a full-service airline.
It is also expected that the renewed company will reinstate its Golden Wing Club.
All this may not be enough – and is probably too late – according to Centre for Asia-Pacific Aviation senior consultant Ian Thomas.
"Most corporates are locked into an agreements with Qantas," Mr Thomas said.
"It moved aggressively after Ansett's collapse and the window of opportunity for Tesna has closed."
Besides, he said, "some of the larger corporate travel agencies maybe unwilling to deal with what is essentially an untried product".
Ansett's administrators remain convinced the Tesna deal will eventually get off the ground.
If they are wrong, the business case for operating a second full-service airline will not diminish.
Enter Richard Branson's Virgin Blue and Chris Corrigan's Lang Corp (Patrick), whose joint proposal to buy some Ansett assets was shunned.
They may take another look at the carrier if the Tesna plan fails.
"We're not in any active discussions with Lang," said Virgin Blue's head of commercial operations David Huttner.
"The previous proposal really wouldn't apply in the present situation.
"(But), if tomorrow we had a call from Lang, we'd talk to them."
During the week Mr Corrigan said Lang was monitoring developments with Ansett and "continued to have an interest in that business in certain circumstances".
Ansett's running on empty . .By ANDREW PAPADATOS. .09feb02
CORPORATE Australia has shunned Solomon Lew and Lindsay Fox's revived Ansett. If the struggling airline does not quickly establish a loyalty program for travelling executives, Qantas will have locked it out of the lucrative executive travel market.
If it hasn't already.
These are the concerns raised by travel agents and aviation experts following The Daily Telegraph learning Ansett had only 100 business-class ticket bookings for February onwards as of the end of last month.
The paltry figure is likely to be causing unease for Ansett's administrators and its owners-in-waiting, the Tesna consortium of millionaires Solomon Lew and Lindsay Fox.
In return for a little more leg room, better food, maybe even a wider smile, airlines pocket fatter profits.
Big Business is big business.
And snaring a share of this market from Qantas will be crucial to Ansett's future – provided the Tesna deal does not collapse before the administrators hand over the airline.
"Ansett should reinstate the loyalty program for the corporate travellers as quickly as possible," said travel.com.au general manager of leisure Helen Demetriou.
"That would be one of the best things they could do for their business."
Ansett's would-be owners, Tesna, has already revealed that they have signed an agreement for the new Ansett to join the global airline loyalty program Star Alliance, which comprises 14 carriers.
The millionaire pair are in Europe to discuss the loyalty program at the moment.
They have already promised attractive deals for corporate accounts and say many chief executives were upset by the high Qantas fares in the weeks after Ansett crashed.
Both are hoping that the contracts Qantas has signed with corporations will not hold up once there are two large airlines bidding for the business market.
Mr Fox and Mr Lew are expected to offer its corporate travellers valet parking, lounges and all the other extras that are provided with a full-service airline.
It is also expected that the renewed company will reinstate its Golden Wing Club.
All this may not be enough – and is probably too late – according to Centre for Asia-Pacific Aviation senior consultant Ian Thomas.
"Most corporates are locked into an agreements with Qantas," Mr Thomas said.
"It moved aggressively after Ansett's collapse and the window of opportunity for Tesna has closed."
Besides, he said, "some of the larger corporate travel agencies maybe unwilling to deal with what is essentially an untried product".
Ansett's administrators remain convinced the Tesna deal will eventually get off the ground.
If they are wrong, the business case for operating a second full-service airline will not diminish.
Enter Richard Branson's Virgin Blue and Chris Corrigan's Lang Corp (Patrick), whose joint proposal to buy some Ansett assets was shunned.
They may take another look at the carrier if the Tesna plan fails.
"We're not in any active discussions with Lang," said Virgin Blue's head of commercial operations David Huttner.
"The previous proposal really wouldn't apply in the present situation.
"(But), if tomorrow we had a call from Lang, we'd talk to them."
During the week Mr Corrigan said Lang was monitoring developments with Ansett and "continued to have an interest in that business in certain circumstances".
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AAP:. . . . Ansett keeps fighting for airport lease
Ansett administrators have stepped up tough negotiations over the Sydney domestic terminal lease as they await a vital Federal Court decision which could force the airline from the skies.
Administrators remain confident Ansett will keep flying but on Friday said if Federal Court judge Justice Alan Goldberg refused to support their decision to keep operating with a $6 million-a-week loss, they would have to reassess the situation.
"We'll cross that bridge when we come to it. Let's see what happens on Tuesday," administrator Mark Korda said outside the court on Friday.
Meanwhile, negotiators continue the push to settle all outstanding issues as the 30-day extension given to Tesna to seal the sale deal moves closer to deadline.
Ten days in, the reports of the administrators progress vary from day to day and party to party.
"We're pushing full steam ahead to get settlement with Tesna," Mr Korda said.
"But there's a number of fleet issues to be done.
"There's airport issues to be done, and IT (information technology) issues.
"There's lots of issues but we're pressing on."
While there were plenty of "ifs", on balance Mr Korda said he was confident the sale would proceed.
But all parties are getting edgy, with huge amounts of money being lost every week and the threat of action by disgruntled creditors if the sale falls through.
A special Federal Court hearing was called on Friday to clarify the Australian Securities and Investments Commission (ASIC) position after lawyers objected to newspaper reports of Thursday's hearing.
ASIC barrister Michael Sifris said ASIC opposed the administrators' request for the Federal Court support for its decision to keep trading while suffering massive losses.
However, he said the ASIC did not oppose their right to do so.
Mr Korda said he took this as a vote of support from the financial watchdog and was confident of the judge's support.
"We've spent a lot of time at the Federal Court. We've been here for directions when we entered into a deal with Air New Zealand and for the federal government loan.
"This is the same thing."
Justice Goldberg will hand down his decision on Tuesday.
Parties are likely to return to the court in the coming weeks to settle a number of other issue including the shortfall in the Ansett employees superannuation fund, and legal problems surrounding the transfer of the Sydney terminal lease.
. . İAAP 2002
Ansett administrators have stepped up tough negotiations over the Sydney domestic terminal lease as they await a vital Federal Court decision which could force the airline from the skies.
Administrators remain confident Ansett will keep flying but on Friday said if Federal Court judge Justice Alan Goldberg refused to support their decision to keep operating with a $6 million-a-week loss, they would have to reassess the situation.
"We'll cross that bridge when we come to it. Let's see what happens on Tuesday," administrator Mark Korda said outside the court on Friday.
Meanwhile, negotiators continue the push to settle all outstanding issues as the 30-day extension given to Tesna to seal the sale deal moves closer to deadline.
Ten days in, the reports of the administrators progress vary from day to day and party to party.
"We're pushing full steam ahead to get settlement with Tesna," Mr Korda said.
"But there's a number of fleet issues to be done.
"There's airport issues to be done, and IT (information technology) issues.
"There's lots of issues but we're pressing on."
While there were plenty of "ifs", on balance Mr Korda said he was confident the sale would proceed.
But all parties are getting edgy, with huge amounts of money being lost every week and the threat of action by disgruntled creditors if the sale falls through.
A special Federal Court hearing was called on Friday to clarify the Australian Securities and Investments Commission (ASIC) position after lawyers objected to newspaper reports of Thursday's hearing.
ASIC barrister Michael Sifris said ASIC opposed the administrators' request for the Federal Court support for its decision to keep trading while suffering massive losses.
However, he said the ASIC did not oppose their right to do so.
Mr Korda said he took this as a vote of support from the financial watchdog and was confident of the judge's support.
"We've spent a lot of time at the Federal Court. We've been here for directions when we entered into a deal with Air New Zealand and for the federal government loan.
"This is the same thing."
Justice Goldberg will hand down his decision on Tuesday.
Parties are likely to return to the court in the coming weeks to settle a number of other issue including the shortfall in the Ansett employees superannuation fund, and legal problems surrounding the transfer of the Sydney terminal lease.
. . İAAP 2002
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Real Story ? Bulls*^t.
Mcrann is dredging up info most of which has been publicly released at the creditor's meeting and through the federal court this week. He must be desperate.
As others have said on this forum, it ain't over till the fat lady sings.
I'll still put my money on a TESNA start.
Mcrann is dredging up info most of which has been publicly released at the creditor's meeting and through the federal court this week. He must be desperate.
As others have said on this forum, it ain't over till the fat lady sings.
I'll still put my money on a TESNA start.
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McCrann has QF shares.His crap,unaccountable journalism will cost pax whilst under admin`.
Deal will be stitched up soon.F/L primarily talking to Airbus and Airpartners.Why not talk to Branson too.
Tesna has a media ban,reason for wild speculation.
FF scheme announced next week and exec appointments,some from Europe.
Deal will be stitched up soon.F/L primarily talking to Airbus and Airpartners.Why not talk to Branson too.
Tesna has a media ban,reason for wild speculation.
FF scheme announced next week and exec appointments,some from Europe.
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Arctaurus,
Don't know about Virgin or Adelaide, sorry mate?
For your sake I hope it is wrong then, but that is the word up here, Ansett will be finished by next weekend at the latest, sorry.
Don't know about Virgin or Adelaide, sorry mate?
For your sake I hope it is wrong then, but that is the word up here, Ansett will be finished by next weekend at the latest, sorry.
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Mc Crann is not just re-cycling stuff from the creditors meeting . He seems to have laid his hands on very recent info like last Thursdays loads. No business even in receivership can trade on for long taking $ 300,000 in cash whilst costing $ 1m plus a day to earn that cash. (This is just the loss on the flying operations). The longer this sorry saga drags on un-resolved the worse it will get as very few travellers will be willing to book AN for risk of getting stranded as has happened on three previous occasions.(Christmas, Easter, September 12).. .No wonder Fox & Lew are in London talking to RB,. .no wonder a lot of people are getting very nervous. The fat lady hasn't sung yet, but the. .wheels of the piano are squeaking onto the stage as the goanna is readied for the performance . Based on the latest trading info and that Fox & Lew are in London (NOT in Sydney sorting out SACL lease), and that daily more business bleeds from AN to other carriers ( both pax and freight), . .it looks more likely that the fat lady will sing. .soon and that it is not likely (sadly) to be a very happy song.
Moderate, Modest & Mild.
I happen to call things as I see them, Boeing Belly. Generally I`ve found Mr McCrann`s articles "spot on", however as he is only human (like most of you ), he, like I, is entitled to his occasional "Off" days.
My greatest wish for the Ansett staff (with notable exceptions - and I believe you fall under THAT category, Boeing Belly - would be to see them get ALL of their payout entitlements, the possibilty of which, I believe, is diminishing extremely rapidly, according to Mr McCrann`s account of the situation.
), he, like I, is entitled to his occasional "Off" days.My greatest wish for the Ansett staff (with notable exceptions - and I believe you fall under THAT category, Boeing Belly - would be to see them get ALL of their payout entitlements, the possibilty of which, I believe, is diminishing extremely rapidly, according to Mr McCrann`s account of the situation.
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As long as I have flown loads have always been low in February. Makes perfect sense. Christmas holidays over kids back to school. QF & AN always have offered discount tickets this time of year in an attempt to pick up loads.. .My friends who have joined DJ say their loads are down too. . .Normal February activity guys. Don't jump to conclusions. . .If nothing else from all, this we've learnt the media never let the facts get in the way of a good story!
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My guess is the key will be if the 2 Marks can hold their nerve . .if the Fed Court does not give them immunity against . .creditors sueing them on Tuesday, Fox/Lew might . .want to keep going, but Andersons would really be . .vunerable if they keep going and then the sale falls through.. . . .Wirraway