DAVID KNIBB SEATTLE
As the sale of Ansett Airlines moves toward completion, there have been heated public exchanges between the parties involved.
Rival bidders, administrators, unions, creditors and even ministers in the same government have clashed with each other over the rescue package. Despite so many conflicting views and claims, the process remains on track and administrators hope to complete the sale of Ansett to a pair of Melbourne businessmen, Lindsay Fox and Solomon Lew, by the end of January.
Details of the A$3.6 billion ($1.8 billion) deal remain under wraps. The Fox-Lew group will pay less than $1 billion for Ansett's assets, but will assume liabilities, commit what is termed "a significant amount" to working capital, and commit a further A$2.5 billion to acquire a fleet of 29 Airbus A320s. In return, it will take over the airline's A320s, terminals, and Melbourne headquarters. The group plans to employ a quarter of Ansett's 16,000 former staff in a full-service, two-class airline, operating under the Ansett name with links to the Star alliance. It does not plan to buy regional subsidiaries or a maintenance operation.
Claiming they are committed to this bid, administrators have refused to consider an 11th hour proposal from Lang Corp, a major freight company, which has strong backing from Virgin Blue. Lang is offering to take Ansett's terminals, 1,500 staff, and maintenance base for A$300 million. Lang's biggest surprise is its proposal to buy 51% of Virgin Blue if its Ansett bid succeeds, apparently with the blessing of Virgin Blue's owner Sir Richard Branson. Lang would then turn Ansett's assets over to Virgin, which would expand as Australia's number two airline. Unless Fox-Lew stumble, however, the bid is simply a backup.
Most dissension has been over the government's refusal to accept sale conditions proposed by Fox-Lew. Some involve requests for tax holidays and commitments to buy government travel from Ansett. Creditors, unions, and administrators have supported Fox-Lew in a heated debate over Canberra's insistence on reimbursement from Ansett proceeds for benefits paid to laid-off Ansett workers. Cabinet ministers have clashed on issues such as a Fox-Lew request for tougher laws against predatory conduct. So far the government has rejected most conditions, however Fox-Lew has still decided to proceed.
Source: Airline Business
