Third Airline Imminent (Alan Kohler)must read
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www.stuff.nz
http://www.stuff.co.nz/inl/index/0,1...799a13,FF.html
Deal could save airlines millions
10 June 2002
Air New Zealand and Qantas stand to gain up to A$200 million (NZ$234 million) a year in savings each, if the two struck a deal to work together, according to analysts.
The two carriers are negotiating with Qantas to buy a minority stake in Air New Zealand, which Qantas is understood to want to buy from the Government, which holds 82 per cent.
Qantas was likely to be interested in a 20 per cent holding, the maximum it could go to without triggering the takeover code, requiring it to bid for half the company. However, Qantas could own up to 25 per cent of Air New Zealand without needing Government approval.
A 20 per cent stake would allow Qantas to set up with Air New Zealand, a similar relationship that the Australian national carrier had with British Airways.
Qantas could also gain a strategic 10 per cent holding by buying out the holdings of BIL International and Singapore Airlines, or it could inject up to $300 million in return for an issue of new shares in Air New Zealand, which would dilute other shareholders.
An Australian-based analyst said both carriers would be able to extract savings of between A$100 million and A$200 million a year by pulling planes off duplicated services and in on-ground costs.
"The logic is that there are planes flying which duplicate capacity, there is potential savings on the ground, and when you look at the schedules you could take three or four Boeing 737s off," the analyst said.
The savings that generated, given the annualised costs of capital tied up in those aircraft plus their flying costs, "would represent something certainly in excess of A$100 million for Qantas and the same for Air New Zealand".
The analyst said negotiations over how those benefits would be shared should be relatively straight forward if the arrangement operated in a similar way to Qantas's agreement with British Airways.
Both carriers would take the same number of aircraft off and reap the benefits from that.
"The operational yield is sufficiently good that you wouldn't necessarily bother splitting straws over it," the analyst said.
Both airlines would look at capacity on their respective routes and how that could be maximised.
They would then decide which airline would fly those routes and the savings benefits divided on that basis.
"But you would expect it to be about fifty fifty," the analyst said.
The key focus would be on eliminating any schedule overlaps on the super-competitive Tasman routes and some New Zealand domestic services, the analyst said.
However, another analyst said the battle over how the significant cost savings benefits were divided up would be part of tough negotiations which could be protracted.
Air New Zealand would not allow Qantas to take all the benefits as the larger partner.
"It would come down to who sacrifices more," the analyst said.
If Air New Zealand was required to cut back services, than it should be allowed to gain a "decent share" of the savings.
Qantas would argue that if it pulled out of the New Zealand domestic market, Air New Zealand would again be able to make huge profits on those services, the analyst said.
The Government would also need to be convinced that the country's transport infrastructure costs did not rise substantially if Qantas pulled out.
However, because there were so many issues to be resolved before such a deal was completed, most analysts were not factoring the possibility into their forecasts.
http://www.stuff.co.nz/inl/index/0,1...799a13,FF.html
Deal could save airlines millions
10 June 2002
Air New Zealand and Qantas stand to gain up to A$200 million (NZ$234 million) a year in savings each, if the two struck a deal to work together, according to analysts.
The two carriers are negotiating with Qantas to buy a minority stake in Air New Zealand, which Qantas is understood to want to buy from the Government, which holds 82 per cent.
Qantas was likely to be interested in a 20 per cent holding, the maximum it could go to without triggering the takeover code, requiring it to bid for half the company. However, Qantas could own up to 25 per cent of Air New Zealand without needing Government approval.
A 20 per cent stake would allow Qantas to set up with Air New Zealand, a similar relationship that the Australian national carrier had with British Airways.
Qantas could also gain a strategic 10 per cent holding by buying out the holdings of BIL International and Singapore Airlines, or it could inject up to $300 million in return for an issue of new shares in Air New Zealand, which would dilute other shareholders.
An Australian-based analyst said both carriers would be able to extract savings of between A$100 million and A$200 million a year by pulling planes off duplicated services and in on-ground costs.
"The logic is that there are planes flying which duplicate capacity, there is potential savings on the ground, and when you look at the schedules you could take three or four Boeing 737s off," the analyst said.
The savings that generated, given the annualised costs of capital tied up in those aircraft plus their flying costs, "would represent something certainly in excess of A$100 million for Qantas and the same for Air New Zealand".
The analyst said negotiations over how those benefits would be shared should be relatively straight forward if the arrangement operated in a similar way to Qantas's agreement with British Airways.
Both carriers would take the same number of aircraft off and reap the benefits from that.
"The operational yield is sufficiently good that you wouldn't necessarily bother splitting straws over it," the analyst said.
Both airlines would look at capacity on their respective routes and how that could be maximised.
They would then decide which airline would fly those routes and the savings benefits divided on that basis.
"But you would expect it to be about fifty fifty," the analyst said.
The key focus would be on eliminating any schedule overlaps on the super-competitive Tasman routes and some New Zealand domestic services, the analyst said.
However, another analyst said the battle over how the significant cost savings benefits were divided up would be part of tough negotiations which could be protracted.
Air New Zealand would not allow Qantas to take all the benefits as the larger partner.
"It would come down to who sacrifices more," the analyst said.
If Air New Zealand was required to cut back services, than it should be allowed to gain a "decent share" of the savings.
Qantas would argue that if it pulled out of the New Zealand domestic market, Air New Zealand would again be able to make huge profits on those services, the analyst said.
The Government would also need to be convinced that the country's transport infrastructure costs did not rise substantially if Qantas pulled out.
However, because there were so many issues to be resolved before such a deal was completed, most analysts were not factoring the possibility into their forecasts.
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Tues "Melbourne Age"
Ansett terminal sale hits a snag
By Darren Goodsir
June 11 2002
Talks aimed at carving up the former Ansett terminal in Sydney have been delayed until after the airport is sold.
The three private bidders for Sydney Airport have persuaded Sydney Airports Corporation to block Virgin Blue and Qantas from reaching a deal to take new gates.
Both airlines want exclusive rights over 15 of the 18 gates and hoped to start revamped operations next month.
The suspension of talks comes 24 hours before final offers are submitted for the airport, with estimates ranging from $4.2 billion to $4.7 billion.
It will delay until at least late this year the reopening of the terminal, dormant since Ansett stopped operating in March.
A spokesman for Finance Minister Nick Minchin, who is supervising the process of selling Australia's largest single infrastructure asset, refused to comment on the reports.
But it is believed the bidders - Connect, Gateway and Southern Cross - expressed concern about long lease deals.
"They were also conscious about how long lease terms could backfire and be counter-productive to the emergence of a new domestic airline," a source close to the negotiations said.
Sydney is the last capital city airport to be sold. At other privatised airports, some access charges have been introduced. In Melbourne, a $1 surcharge applies to taxis. Such a charge is almost certain to be introduced in Sydney.
Originally, the sale was tipped at more than $5 billion, but Ansett's death and a fall in air travel have affected the price.
The successful bidder is likely to be announced within weeks.
The Star Alliance network of international carriers, especially its key Asia-Pacific members Air New Zealand and Singapore Airlines, have been exploring the possibility of launching a third domestic player to fill the void in their global route structure caused by Ansett's collapse.
If Sydney Airports Corporation's deal with Virgin Blue and Qantas had been approved, only three gates would have remained at the old Ansett terminal, robbing any real chance for a new airline to start operations.
Each bidder believes it can achieve a more profitable commercial deal from the Ansett site.
Qantas has indicated it will expand its terminal unless it can take nine Ansett gates. It will demolish a hangar so that two gates can be added. But it wants the Ansett gates as well, as a base for all regional operations.
Virgin Blue's commercial operations chief, David Huttner, said the airline had been repeatedly assured by the Department of Transport and Regional Services that the bidding process would have no effect on the terminal negotiations.
"These delays will be damaging to the government's long-stated goal of allowing Virgin Blue to grow as quickly as possible to act as a formidable competitor against Qantas," he said. "We are still actively involved in discussions and believe we are very, very close toward reaching a resolution."
A Sydney Airports Corporation spokesman declined to comment on the terminal talks being postponed, saying only the talks were proceeding smoothly.
Ansett terminal sale hits a snag
By Darren Goodsir
June 11 2002
Talks aimed at carving up the former Ansett terminal in Sydney have been delayed until after the airport is sold.
The three private bidders for Sydney Airport have persuaded Sydney Airports Corporation to block Virgin Blue and Qantas from reaching a deal to take new gates.
Both airlines want exclusive rights over 15 of the 18 gates and hoped to start revamped operations next month.
The suspension of talks comes 24 hours before final offers are submitted for the airport, with estimates ranging from $4.2 billion to $4.7 billion.
It will delay until at least late this year the reopening of the terminal, dormant since Ansett stopped operating in March.
A spokesman for Finance Minister Nick Minchin, who is supervising the process of selling Australia's largest single infrastructure asset, refused to comment on the reports.
But it is believed the bidders - Connect, Gateway and Southern Cross - expressed concern about long lease deals.
"They were also conscious about how long lease terms could backfire and be counter-productive to the emergence of a new domestic airline," a source close to the negotiations said.
Sydney is the last capital city airport to be sold. At other privatised airports, some access charges have been introduced. In Melbourne, a $1 surcharge applies to taxis. Such a charge is almost certain to be introduced in Sydney.
Originally, the sale was tipped at more than $5 billion, but Ansett's death and a fall in air travel have affected the price.
The successful bidder is likely to be announced within weeks.
The Star Alliance network of international carriers, especially its key Asia-Pacific members Air New Zealand and Singapore Airlines, have been exploring the possibility of launching a third domestic player to fill the void in their global route structure caused by Ansett's collapse.
If Sydney Airports Corporation's deal with Virgin Blue and Qantas had been approved, only three gates would have remained at the old Ansett terminal, robbing any real chance for a new airline to start operations.
Each bidder believes it can achieve a more profitable commercial deal from the Ansett site.
Qantas has indicated it will expand its terminal unless it can take nine Ansett gates. It will demolish a hangar so that two gates can be added. But it wants the Ansett gates as well, as a base for all regional operations.
Virgin Blue's commercial operations chief, David Huttner, said the airline had been repeatedly assured by the Department of Transport and Regional Services that the bidding process would have no effect on the terminal negotiations.
"These delays will be damaging to the government's long-stated goal of allowing Virgin Blue to grow as quickly as possible to act as a formidable competitor against Qantas," he said. "We are still actively involved in discussions and believe we are very, very close toward reaching a resolution."
A Sydney Airports Corporation spokesman declined to comment on the terminal talks being postponed, saying only the talks were proceeding smoothly.
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Tuesday June 11, 1:55 PM (Singapore)
SIA Likely To Buy Virgin Blue Stake-ING
STOCK CALL (Dow Jones)--SIA likely to enter cooperative relationship with Virgin Blue, as SIA has been unable to access domestic Australia market after collapse of Ansett last year, says ING. Also says SIA likely to acquire non-controlling equity stake in Virgin Blue. Maintains hold rating and S$13.75 target price, based on 7.0X estimated FY03 EV/EBITDA multiple.(SM
http://sg.biz.yahoo.com/020611/15/2zepr.html
SIA Likely To Buy Virgin Blue Stake-ING
STOCK CALL (Dow Jones)--SIA likely to enter cooperative relationship with Virgin Blue, as SIA has been unable to access domestic Australia market after collapse of Ansett last year, says ING. Also says SIA likely to acquire non-controlling equity stake in Virgin Blue. Maintains hold rating and S$13.75 target price, based on 7.0X estimated FY03 EV/EBITDA multiple.(SM
http://sg.biz.yahoo.com/020611/15/2zepr.html
Last edited by Wirraway; 11th Jun 2002 at 10:19.
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Thurs "Melbourne Age" 13/6/02
Virgin in queue to buy Ansett rights
By Belinda Tasker
June 13 2002
A string of overseas airlines and local discount carrier Virgin Blue have expressed interest in buying Ansett's air operators certificate (AOC), Ansett administrator Mark Mentha said yesterday.
He said talks were progressing and confidentiality agreements had been signed with the interested parties, which are rumoured to include Emirates and Singapore Airlines.
"We have had quite a number of inquiries from overseas airlines in relation to that AOC," he said.
"We have also had Virgin (Blue) express interest in it.
"I think the real issue is time - how long do we maintain the infrastructure versus how long it takes for these parties to determine at what point they will enter the market and if they will enter the market."
Mr Mentha said the AOC included a range of Ansett's infrastructure, including aircraft maintenance facilities and manuals.
The administrators were talking to "parties on every continent" about the sale of the remaining 50 Ansett planes.
So far, the Ansett administrators have sold assets worth $350 million to $500 million, including its Sydney terminal and Melbourne headquarters.
The figure was ahead of expectations, Mr Mentha said, adding that the administrators were ahead in their expectations that priority creditors would get back 92 cents in the dollar on their Ansett investments.
Meanwhile, the administrators are expecting to make an announcement on the sale of Ansett's Melbourne jet base today or tomorrow.
The sale of Ansett's regional operators Kendell Airlines and Hazelton Airlines to Australiawide Airlines was also expected to be wrapped up this week.
"I am meeting in Canberra tomorrow with the Department of Transport and Regional Services to just put the final dots on the i's and crosses on the t's in terms of the sale contract and completion hopefully this week," Mr Mentha said.
Australiawide Airlines, a New South Wales-based consortium of aviation experts, has reached an agreement to buy and merge the former Ansett subsidiaries for an undisclosed sum.
- AAP
Virgin in queue to buy Ansett rights
By Belinda Tasker
June 13 2002
A string of overseas airlines and local discount carrier Virgin Blue have expressed interest in buying Ansett's air operators certificate (AOC), Ansett administrator Mark Mentha said yesterday.
He said talks were progressing and confidentiality agreements had been signed with the interested parties, which are rumoured to include Emirates and Singapore Airlines.
"We have had quite a number of inquiries from overseas airlines in relation to that AOC," he said.
"We have also had Virgin (Blue) express interest in it.
"I think the real issue is time - how long do we maintain the infrastructure versus how long it takes for these parties to determine at what point they will enter the market and if they will enter the market."
Mr Mentha said the AOC included a range of Ansett's infrastructure, including aircraft maintenance facilities and manuals.
The administrators were talking to "parties on every continent" about the sale of the remaining 50 Ansett planes.
So far, the Ansett administrators have sold assets worth $350 million to $500 million, including its Sydney terminal and Melbourne headquarters.
The figure was ahead of expectations, Mr Mentha said, adding that the administrators were ahead in their expectations that priority creditors would get back 92 cents in the dollar on their Ansett investments.
Meanwhile, the administrators are expecting to make an announcement on the sale of Ansett's Melbourne jet base today or tomorrow.
The sale of Ansett's regional operators Kendell Airlines and Hazelton Airlines to Australiawide Airlines was also expected to be wrapped up this week.
"I am meeting in Canberra tomorrow with the Department of Transport and Regional Services to just put the final dots on the i's and crosses on the t's in terms of the sale contract and completion hopefully this week," Mr Mentha said.
Australiawide Airlines, a New South Wales-based consortium of aviation experts, has reached an agreement to buy and merge the former Ansett subsidiaries for an undisclosed sum.
- AAP
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Dow Jones
Wednesday June 12, 6:50 PM (Singapore)
Singapore Air Likely To Buy Virgin Blue Stake -Analysts
By Shen Hong
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--With Singapore Airlines Ltd. still mulling its options in Australia - a lucrative market key to the airline's long-term growth - analysts are betting SIA will wind up purchasing a stake in Australian domestic discount carrier Virgin Blue.
Compared with the cost of setting up of a third airline in Australia following the collapse of Ansett Australia Holdings Ltd., analysts say an investment in the promising Virgin Blue appears to be a much better option.
An SIA spokesman declined to comment on the airline's plans. But earlier this month, SIA said it is "seeking a solution" in Australia and is "leaving all options open."
Ansett, which folded in September, was Australia's second-largest domestic carrier behind now-dominant Qantas Airways Ltd. and SIA's erstwhile partner down-under. Virgin Blue was launched by U.K. tycoon Richard Branson in mid-2000 as a low cost competitor to Qantas. Branson later sold half the airline to Australia's Patrick Corp. for A$260 million.
"We view the likelihood of SIA acquiring a non-controlling equity stake in Virgin Blue as high," Philip Wickham, a Hong Kong-based regional airline analyst at ING Barings, said in a recent research note.
Some analysts say they expect SIA to take a maximum 25% stake in Virgin Blue, and Wickham predicts the Singapore flag carrier will have to pay more per share than Patrick did considering the subsequent growth in Virgin Blue's market share.
But analysts also caution not to expect a quick decision by SIA, as the carrier is still nursing its wounds from its failed investment in Australasia last year.
Before any deal happens, SIA is expected to enter into a cooperative relationship with Virgin Blue, such as a code-sharing agreement, as SIA has been unable to access the domestic Australian market since the collapse of Ansett.
SIA had been an indirect shareholder in Ansett through a 25% stake in Ansett's parent Air New Zealand Ltd. Its stake shrank to 4.5% after the New Zealand government nationalized the carrier, but that still left SIA with a bill of S$267 million for its share of Ansett's - and hence Air New Zealand's - losses.
Despite that previous setback, John Casey, a regional airline analyst at DBS Vickers Securities, says acquiring a stake in Virgin Blue makes good strategic sense because "the most important issue for SIA is that the Australian market doesn't become so lacking in competition that Qantas can subsidize its international expansion with profits from domestic operations."
In fact, the key rationale for SIA's original investment in Air New Zealand was to block Qantas' threat overseas by ensuring it had a strong competitor at home.
And SIA already has strong ties with Branson's business empire: it owns 49% of Virgin Atlantic, the tycoon's international carrier.
Australia An Important Market
The land down-under is an important market for SIA, with Australia-Europe routes contributing 8%-10% of the carrier's total passenger revenue, says ING Barings' Wickham.
The bankruptcy of Ansett resulted in SIA's Australian network contracting by two destinations and flight frequencies to Adelaide, for example, declining by over 70%, Wickham adds.
While there has been speculation that SIA may be interested in helping launch a third Australian airline to fill the vacuum left by Ansett, such a move would be expensive and wouldn't necessarily guarantee good returns, analysts say.
Earlier this month, SIA denied that it is in talks to acquire Ansett's airline-operating certificate and some other assets, suggesting that it isn't considering starting from scratch.
Qantas' recent offer to buy a 25% stake in Air New Zealand and form a trans-Tasmanian alliance also makes a strong case for a SIA-Virgin Blue tie-up.
Masya Spek, an analyst at G.K. Goh Research in Singapore, says that if the Qantas-Air New Zealand deal goes through, it would almost certainly result in the New Zealand carrier joining Qantas in the OneWorld airline alliance, the arch-rival of SIA's Star Alliance.
"SIA/Star Alliance might not have any other choice but to team up with Virgin Blue," Spek says.
Analysts are bullish on Virgin Blue's prospects, particularly as Branson said in March that profit at the unlisted airline will soar to at least A$25 million for the year ending March 2003.
In April, Virgin Blue also unveiled ambitious expansion plans worth A$3.6 billion, including a fleet upgrade and terminal purchases.
And to some extent, Qantas must tolerate Virgin Blue's current 18% share of the domestic market and a comfortable duopoly, as a Qantas monopoly simply wouldn't be allowed by the industry regulator, analysts say.
Analysts also brush off concerns that passengers pampered by SIA's highly-regarded service will balk at transferring to a no-frills airline for the domestic leg of their journey. SIA, they note, already has code-sharing agreements with smaller domestic carriers that lack premium services, such as British Midland and Varig Brazilian Airways.
Shares of SIA closed Wednesday unchanged at S$13.10.
-By Shen Hong, Dow Jones Newswires; 65-4154-156; [email protected]
Wednesday June 12, 6:50 PM (Singapore)
Singapore Air Likely To Buy Virgin Blue Stake -Analysts
By Shen Hong
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--With Singapore Airlines Ltd. still mulling its options in Australia - a lucrative market key to the airline's long-term growth - analysts are betting SIA will wind up purchasing a stake in Australian domestic discount carrier Virgin Blue.
Compared with the cost of setting up of a third airline in Australia following the collapse of Ansett Australia Holdings Ltd., analysts say an investment in the promising Virgin Blue appears to be a much better option.
An SIA spokesman declined to comment on the airline's plans. But earlier this month, SIA said it is "seeking a solution" in Australia and is "leaving all options open."
Ansett, which folded in September, was Australia's second-largest domestic carrier behind now-dominant Qantas Airways Ltd. and SIA's erstwhile partner down-under. Virgin Blue was launched by U.K. tycoon Richard Branson in mid-2000 as a low cost competitor to Qantas. Branson later sold half the airline to Australia's Patrick Corp. for A$260 million.
"We view the likelihood of SIA acquiring a non-controlling equity stake in Virgin Blue as high," Philip Wickham, a Hong Kong-based regional airline analyst at ING Barings, said in a recent research note.
Some analysts say they expect SIA to take a maximum 25% stake in Virgin Blue, and Wickham predicts the Singapore flag carrier will have to pay more per share than Patrick did considering the subsequent growth in Virgin Blue's market share.
But analysts also caution not to expect a quick decision by SIA, as the carrier is still nursing its wounds from its failed investment in Australasia last year.
Before any deal happens, SIA is expected to enter into a cooperative relationship with Virgin Blue, such as a code-sharing agreement, as SIA has been unable to access the domestic Australian market since the collapse of Ansett.
SIA had been an indirect shareholder in Ansett through a 25% stake in Ansett's parent Air New Zealand Ltd. Its stake shrank to 4.5% after the New Zealand government nationalized the carrier, but that still left SIA with a bill of S$267 million for its share of Ansett's - and hence Air New Zealand's - losses.
Despite that previous setback, John Casey, a regional airline analyst at DBS Vickers Securities, says acquiring a stake in Virgin Blue makes good strategic sense because "the most important issue for SIA is that the Australian market doesn't become so lacking in competition that Qantas can subsidize its international expansion with profits from domestic operations."
In fact, the key rationale for SIA's original investment in Air New Zealand was to block Qantas' threat overseas by ensuring it had a strong competitor at home.
And SIA already has strong ties with Branson's business empire: it owns 49% of Virgin Atlantic, the tycoon's international carrier.
Australia An Important Market
The land down-under is an important market for SIA, with Australia-Europe routes contributing 8%-10% of the carrier's total passenger revenue, says ING Barings' Wickham.
The bankruptcy of Ansett resulted in SIA's Australian network contracting by two destinations and flight frequencies to Adelaide, for example, declining by over 70%, Wickham adds.
While there has been speculation that SIA may be interested in helping launch a third Australian airline to fill the vacuum left by Ansett, such a move would be expensive and wouldn't necessarily guarantee good returns, analysts say.
Earlier this month, SIA denied that it is in talks to acquire Ansett's airline-operating certificate and some other assets, suggesting that it isn't considering starting from scratch.
Qantas' recent offer to buy a 25% stake in Air New Zealand and form a trans-Tasmanian alliance also makes a strong case for a SIA-Virgin Blue tie-up.
Masya Spek, an analyst at G.K. Goh Research in Singapore, says that if the Qantas-Air New Zealand deal goes through, it would almost certainly result in the New Zealand carrier joining Qantas in the OneWorld airline alliance, the arch-rival of SIA's Star Alliance.
"SIA/Star Alliance might not have any other choice but to team up with Virgin Blue," Spek says.
Analysts are bullish on Virgin Blue's prospects, particularly as Branson said in March that profit at the unlisted airline will soar to at least A$25 million for the year ending March 2003.
In April, Virgin Blue also unveiled ambitious expansion plans worth A$3.6 billion, including a fleet upgrade and terminal purchases.
And to some extent, Qantas must tolerate Virgin Blue's current 18% share of the domestic market and a comfortable duopoly, as a Qantas monopoly simply wouldn't be allowed by the industry regulator, analysts say.
Analysts also brush off concerns that passengers pampered by SIA's highly-regarded service will balk at transferring to a no-frills airline for the domestic leg of their journey. SIA, they note, already has code-sharing agreements with smaller domestic carriers that lack premium services, such as British Midland and Varig Brazilian Airways.
Shares of SIA closed Wednesday unchanged at S$13.10.
-By Shen Hong, Dow Jones Newswires; 65-4154-156; [email protected]
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I wouldn't get too excited about it, considering from whence it has come, it looks like the usual "lets run this idea up the mast and see who salutes it" routine fed to a friendly analyst by you know who.
They can play all the games they like at the end of the day they are going to have to deal with some realities about who actually runs this country and makes the rules.
Virgin with the UA code share currently hold a number of Aces, they should not be in any hurry.
They can play all the games they like at the end of the day they are going to have to deal with some realities about who actually runs this country and makes the rules.
Virgin with the UA code share currently hold a number of Aces, they should not be in any hurry.
Last edited by gaunty; 13th Jun 2002 at 09:51.
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Gaunty & rmm
rmm, If your information on Patricks picking up the ground
equipment today is right, and Bugmasher is on the money that
VB have bought the Melbourne jetbase, with Dr Choong
rejecting the story that SIA are persuing the Ansett AOC,
and now finding that Dragon Air is also not after the AOC,
the only dark horse that the 2 Marks can possibly have if
any is Emirates. What do you think, will SQ get into bed with DJ ?
Wirraway
HK's Dragonair says not in talks with Ansett
HONG KONG, June 13 (Reuters) - Hong Kong's second passenger carrier, Dragon Airlines Ltd, is not in talks to buy loss-making airline Ansett Australia's air operators certificate or its assets, its major shareholder said on Thursday.
"We are not in talks and there is very little synergy for us to move into the Australian market," said Thomas Tsang, executive director of Beijing-backed China National Aviation Company Limited .
He said it would make more sense for the airline to focus on expanding its Greater China operations.
Dragonair's network serves 27 destinations across the Asia-Pacific but most of its routes are to mainland China. It does not fly to Australia.
Ansett administrator Mark Mentha said on Wednesday that a handful of overseas airlines, including an Asian carrier, were looking to buy Ansett's airline domestic operations.
Industry watchers put Singapore Airlines at the top of the list of likely contenders.
Ansett assets worth around A$350-500 million ($200-285 million) have so far been sold, although the sale of the airline's remaining 50 planes could take another two years.
Mentha said planes, manuals and maintenance facilities would likely to sold in a package to any airline which bought Ansett's air operators certificate, effectively Ansett's license to fly.
Dragonair is 43.29 percent owned by China National Aviation Co , 29.35 percent by red chip CITIC Pacific Ltd
, 17.79 percent by leading Hong Kong carrier Cathay Pacific and 7.71 percent by Swire Pacific Ltd
. Other shareholders own 1.86 percent of the company.
Cathay spokeswoman Lisa Wong said the airline was not interested in Ansett.
Reuters
rmm, If your information on Patricks picking up the ground
equipment today is right, and Bugmasher is on the money that
VB have bought the Melbourne jetbase, with Dr Choong
rejecting the story that SIA are persuing the Ansett AOC,
and now finding that Dragon Air is also not after the AOC,
the only dark horse that the 2 Marks can possibly have if
any is Emirates. What do you think, will SQ get into bed with DJ ?
Wirraway
HK's Dragonair says not in talks with Ansett
HONG KONG, June 13 (Reuters) - Hong Kong's second passenger carrier, Dragon Airlines Ltd, is not in talks to buy loss-making airline Ansett Australia's air operators certificate or its assets, its major shareholder said on Thursday.
"We are not in talks and there is very little synergy for us to move into the Australian market," said Thomas Tsang, executive director of Beijing-backed China National Aviation Company Limited .
He said it would make more sense for the airline to focus on expanding its Greater China operations.
Dragonair's network serves 27 destinations across the Asia-Pacific but most of its routes are to mainland China. It does not fly to Australia.
Ansett administrator Mark Mentha said on Wednesday that a handful of overseas airlines, including an Asian carrier, were looking to buy Ansett's airline domestic operations.
Industry watchers put Singapore Airlines at the top of the list of likely contenders.
Ansett assets worth around A$350-500 million ($200-285 million) have so far been sold, although the sale of the airline's remaining 50 planes could take another two years.
Mentha said planes, manuals and maintenance facilities would likely to sold in a package to any airline which bought Ansett's air operators certificate, effectively Ansett's license to fly.
Dragonair is 43.29 percent owned by China National Aviation Co , 29.35 percent by red chip CITIC Pacific Ltd
, 17.79 percent by leading Hong Kong carrier Cathay Pacific and 7.71 percent by Swire Pacific Ltd
. Other shareholders own 1.86 percent of the company.
Cathay spokeswoman Lisa Wong said the airline was not interested in Ansett.
Reuters
Last edited by Wirraway; 13th Jun 2002 at 10:59.
Wirraway,
Local paper said last week that EK are not interested in Oz domestic market as they are too busy expanding, making money and taking over the world! So they can be ruled out with Dragonair.
I guess VB will be a growing.
Don
Local paper said last week that EK are not interested in Oz domestic market as they are too busy expanding, making money and taking over the world! So they can be ruled out with Dragonair.
I guess VB will be a growing.
Don
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Wirraway
I do not nor ever have had any inside info on this issue other than a bit of world experience.
IMHO Virgin hold most, if not now all, of the Aces to keep any other contender out.
Neither do they have to roll over to any suitor carrying a bag of promises. I think Mr Branson has that worked out.
I would have thought it was obvious to most rational thinkers by now that a third airline in Australia has always been and still is a very very hard ask unless you do it Virgin style and seeing as how Virgin have claimed that ground as their own and QF have pretty well sewn up the rest it's GAME OVER for a fair while.
There is a reality about the Oz airline business, and the OZ airline picture as we now see it, seems to be the "natural one" and is pretty much as near to optimum as we'll get. Any other players blundering around in it will only distort the picture and services and produce a lesser not better result for all of us.
Sorry Mr Mentha but the Ansett AOC has no intrinsic value to anyone really, other than as a "frightener" and on that basis not much more either.
BTW I am not surprised when we hear anecdotal stuff about the so called "decline" in QF service etc, if that is so, it is, IMHO a short term issue.
Personally I think they have done a magic job in picking up the wreckage of AN and keeping the whole system going for us ordinary Ozzers whilst they consolidate.
They know that they are going to have to perform and keep performing in the new Oz airline paradigm
a. to keep a third airline out.
b. to keep Virgin under pressure.
Guess who wins US Ozzers, its called competition.
The "old" system with QF/AN and the Government "protection' was born and evolved as a necessity to protect and nuture a very fragile and widely dispersed market. Then.
AN had the running alongside QF and had been, like QF, brought to that privileged position with OUR hard earned dollars. Then.
They the AN owners, not the Govt, AirNZ, Virgin or anyone else blew it from this position of privilege.
It, "that system", served its purpose well, but is no longer required in its "old" form, but neither are we yet comletely out of the woods.
One has only to look at our nearest comparable geographic, social and political structure and demographic in Canada to see the problems they have had and something like the final results if there is any such thing.
My advice to the pilots who are hanging around waiting for a ressurection or other miracle is DONT.
Go wherever and however you can for the jobs that are there NOW.
All the breast beating and hopeful posting on this and other forums about who should do what or deserves that are not going to change the facts about the Oz market place as she now is.
Trust me I have been there done that
The analysts can analyse and the "Centre for whatever and whoever" happens to be paying them at the time can pontificate and prognosticate all they like. Most assume they do it as some esoteric public service or information bureau, trust me they do not.
If they are all so clever and can see so clearly the furture, why aren't they doing it themselves???
Read very carefully between the lines and decode the code and even then who knows.
For example, dont confuse inscrutability with some complex game play design, its code for we haven't the faintest idea either, but if we wait long enough for enough of the pieces to fall into place, we can see where to go, if it's forward, then we can be seen as all wise, if its stay still or go backwards we do and can still be seen as all wise. In the meantime the analysts, they're the kids just out of business school, I know I've raised three of em, impute all manner of clever strategies to no strategies at all.
I do not nor ever have had any inside info on this issue other than a bit of world experience.
IMHO Virgin hold most, if not now all, of the Aces to keep any other contender out.
Neither do they have to roll over to any suitor carrying a bag of promises. I think Mr Branson has that worked out.
I would have thought it was obvious to most rational thinkers by now that a third airline in Australia has always been and still is a very very hard ask unless you do it Virgin style and seeing as how Virgin have claimed that ground as their own and QF have pretty well sewn up the rest it's GAME OVER for a fair while.
There is a reality about the Oz airline business, and the OZ airline picture as we now see it, seems to be the "natural one" and is pretty much as near to optimum as we'll get. Any other players blundering around in it will only distort the picture and services and produce a lesser not better result for all of us.
Sorry Mr Mentha but the Ansett AOC has no intrinsic value to anyone really, other than as a "frightener" and on that basis not much more either.
BTW I am not surprised when we hear anecdotal stuff about the so called "decline" in QF service etc, if that is so, it is, IMHO a short term issue.
Personally I think they have done a magic job in picking up the wreckage of AN and keeping the whole system going for us ordinary Ozzers whilst they consolidate.
They know that they are going to have to perform and keep performing in the new Oz airline paradigm
a. to keep a third airline out.
b. to keep Virgin under pressure.
Guess who wins US Ozzers, its called competition.
The "old" system with QF/AN and the Government "protection' was born and evolved as a necessity to protect and nuture a very fragile and widely dispersed market. Then.
AN had the running alongside QF and had been, like QF, brought to that privileged position with OUR hard earned dollars. Then.
They the AN owners, not the Govt, AirNZ, Virgin or anyone else blew it from this position of privilege.
It, "that system", served its purpose well, but is no longer required in its "old" form, but neither are we yet comletely out of the woods.
One has only to look at our nearest comparable geographic, social and political structure and demographic in Canada to see the problems they have had and something like the final results if there is any such thing.
My advice to the pilots who are hanging around waiting for a ressurection or other miracle is DONT.
Go wherever and however you can for the jobs that are there NOW.
All the breast beating and hopeful posting on this and other forums about who should do what or deserves that are not going to change the facts about the Oz market place as she now is.
Trust me I have been there done that
The analysts can analyse and the "Centre for whatever and whoever" happens to be paying them at the time can pontificate and prognosticate all they like. Most assume they do it as some esoteric public service or information bureau, trust me they do not.
If they are all so clever and can see so clearly the furture, why aren't they doing it themselves???
Read very carefully between the lines and decode the code and even then who knows.
For example, dont confuse inscrutability with some complex game play design, its code for we haven't the faintest idea either, but if we wait long enough for enough of the pieces to fall into place, we can see where to go, if it's forward, then we can be seen as all wise, if its stay still or go backwards we do and can still be seen as all wise. In the meantime the analysts, they're the kids just out of business school, I know I've raised three of em, impute all manner of clever strategies to no strategies at all.
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From what I can read of this, all the "parties" appear to be still posturing.
The sale of the AN AOC is just not as simple as it sounds. The bits and pieces that go with an AOC are EVERY bit as important as the piece of paper itself. So, unles the "purchaser" complies with ALL of the documentation, CASA would probably withdraw the approval.
Virgin proponents may disagree, but in reality, it just cannot utilise the AN AOC.
If this is true, SQ would have to be in the front running to start a third airline and have 100 % compliance with this AOC.
I also wonder if there is a time decay element with all of this and that if it drags out much longer, the AOC may have little value anyway.
The AOC is only part of the issue. QF, Virgin and a possible "third" operator will also need to tie up gate space as protection for their respective operations.
The sale of the AN AOC is just not as simple as it sounds. The bits and pieces that go with an AOC are EVERY bit as important as the piece of paper itself. So, unles the "purchaser" complies with ALL of the documentation, CASA would probably withdraw the approval.
Virgin proponents may disagree, but in reality, it just cannot utilise the AN AOC.
If this is true, SQ would have to be in the front running to start a third airline and have 100 % compliance with this AOC.
I also wonder if there is a time decay element with all of this and that if it drags out much longer, the AOC may have little value anyway.
The AOC is only part of the issue. QF, Virgin and a possible "third" operator will also need to tie up gate space as protection for their respective operations.
There is no AOC
'Ansett's' AOCs have expired.
Even if they had not expired, they cannot be sold.
The only person that can exercise the authorisations on an AOC is the person to whom it was issued.
Anyone reckon that if they sold their pilot's licence, the purchaser would be entitled to exercise its privileges?
Even if they had not expired, they cannot be sold.
The only person that can exercise the authorisations on an AOC is the person to whom it was issued.
Anyone reckon that if they sold their pilot's licence, the purchaser would be entitled to exercise its privileges?
Not true cream puff,
Pilots license if different as it is issued to an idividual. AOCs are issued to companies.
If the AOC has not expired it can be sold, along with the entity (read company with ACN) that it was issued to. This assumes that the entity is intact in CASAs eyes; approved Chief Pilot etc.
From the AOC Manual
3.2.6 Change of Company Ownership
A change in ownership of a company does not affect the status of the legal entity itself.
(I do not know if Ansetts AOC has expired or not, just commenting on AOC transfer)
Gibbo
Pilots license if different as it is issued to an idividual. AOCs are issued to companies.
If the AOC has not expired it can be sold, along with the entity (read company with ACN) that it was issued to. This assumes that the entity is intact in CASAs eyes; approved Chief Pilot etc.
From the AOC Manual
3.2.6 Change of Company Ownership
A change in ownership of a company does not affect the status of the legal entity itself.
(I do not know if Ansetts AOC has expired or not, just commenting on AOC transfer)
Gibbo
Last edited by Gibbo; 14th Jun 2002 at 03:48.
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Could it be that the 2 Marks are telling porkies with their
statement on Wednesday that all these airlines are chasing
this AOC, and said airlines are denying any knowledge
of this happening, very strange goings on indeed. and no
press here in Australia have mentioned that the S/pore analysts
are betting on SIA buying into VB. Interesting to see what
happens next, a bit like "Days of our lives"
Wirraway
statement on Wednesday that all these airlines are chasing
this AOC, and said airlines are denying any knowledge
of this happening, very strange goings on indeed. and no
press here in Australia have mentioned that the S/pore analysts
are betting on SIA buying into VB. Interesting to see what
happens next, a bit like "Days of our lives"
Wirraway
Is true Gibbo
The only corporate entity that could have exercised the authorisations on the (now expired) AOC issued to Ansett Airways Limited ACN 004 216 291, is Ansett Airways Limited ACN 004 216 291. That entity is a little impecunious at the moment.
If someone wants to 'buy' the Ansett Airways Limited ACN 004 216 291 carcass from the administrators, then good luck to them. And even if the purhasers could get CASA to commit a breathtakingly corrupt act by issuing an AOC to the carcass, it would still only be the carcass that held the AOC.
What they cannot do is sell the carcass's AOC to another person, corporate or otherwise.
Wirraway: the political game that's being played at the moment is despicable.
If someone wants to 'buy' the Ansett Airways Limited ACN 004 216 291 carcass from the administrators, then good luck to them. And even if the purhasers could get CASA to commit a breathtakingly corrupt act by issuing an AOC to the carcass, it would still only be the carcass that held the AOC.
What they cannot do is sell the carcass's AOC to another person, corporate or otherwise.
Wirraway: the political game that's being played at the moment is despicable.
Last edited by Creampuff; 14th Jun 2002 at 04:03.
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Would have to agree that it is highly unlikely that anyone will start a third airline. It would make much better business sense to either buy into VB or push for oncarriage rights (third freedom I think).
VB has a reasonable product which is not unappealing to an economy passenger for the connection. Business class will still connect with QF which would not be a great impact in overall cost for a connection to LON etc.
Even oncarriage would only be suitable for a couple of city pairs considering the size of aircraft that most international operators are using. This would depend on the ultimate destination i.e PER/ADL for Africa, PER/SYD for USA, BNE/SYD for Japan etc.
IMHO, unless we get a nutcase with too much money we will not see a 'major' third airline in the near future. It is more likely that an operator may fly some selected routes and have a very gradual expansion. Outside of the capital cities, Australia is a very small market. This is something that the car manufacturers have already come to realise.
VB has a reasonable product which is not unappealing to an economy passenger for the connection. Business class will still connect with QF which would not be a great impact in overall cost for a connection to LON etc.
Even oncarriage would only be suitable for a couple of city pairs considering the size of aircraft that most international operators are using. This would depend on the ultimate destination i.e PER/ADL for Africa, PER/SYD for USA, BNE/SYD for Japan etc.
IMHO, unless we get a nutcase with too much money we will not see a 'major' third airline in the near future. It is more likely that an operator may fly some selected routes and have a very gradual expansion. Outside of the capital cities, Australia is a very small market. This is something that the car manufacturers have already come to realise.