DAVID KNIBB SEATTLE
The resurrection of a scaled-down Ansett looks set to complete soon if, as expected, creditors approve a buy-out plan which now involves the influential US Air Partners investment group.
If approved, which seems almost certain, a syndicate headed by Melbourne businessmen Lindsay Fox and Solomon Lew will take over Ansett. The carrier has been under court-supervised administration since Air New Zealand (ANZ) abandoned it last September. For the past four months, Ansett has operated a skeleton service under the direction of its administrators.
Ansett Mark II will be a scaled down replica of the 66-year-old Australian domestic airline. Instead of 16,000 employees, it will retain around 4,000, and it will start with its current fleet of 16 Airbus A320s. The plan is to add around three new A320s each month until it reaches 30 and then start replacing older jets. In addition, the new airline would not seek to cover the entire Australian network but instead fly only trunk routes between capital cities.
Nonetheless, Ansett aims to be a full-service carrier with two-class cabins, in-flight amenities, lounges, and the prospect of a new livery and design. It plans to launch a new loyalty programme while remaining a member of the Star Alliance.
The Lew-Fox group gained a major boost in December when backing was offered by the Air Partners investment group, which is headed by US entrepreneur David Bondermanand Bill Franke, who headed America West until last August. Bonderman and Franke have gained reputations as airline turnaround specialists from their rescues of America West and Continental Airlines. Bonderman is also chairman of Europe's Ryanair, in which he invested strongly.
Subject to Canberra's approval, their group, Air Partners III Australia, will take an estimated 40% stake in the Fox-Lew syndicate. Fox and Lew will co-chair it, but Franke has been in Melbourne working with them. One of their first joint efforts was to select Ansett's new senior management. James Hogan, who was chief operating officer for bmi British Midland, is the new chief executive. Adam Moroney, Air New Zealand's former chief financial officer, is taking that same slot at Ansett.
The entry of Air Partners ended an extended Singapore Airlines flirtation with Ansett. Despite a long-standing interest, it could never reach an agreement with the Fox-Lew group over critical control issue, asking for more autonomy than they would give in selecting routes, frequencies and work conditions.
Ansett is entering a decidedly hostile environment for newcomers. Rivals Qantas and Virgin Blue are offering fares as low as A$5 ($2.57) on some routes slated to coincide with its relaunch. February-March is also one of the slowest periods for Australian traffic. Some analysts are already sceptical as to whether Ansett can survive in a market dominated by Qantas and the aggressive growth of low-fare carrier Virgin Blue.
Source: Airline Business
