3-9623-3444; Http://www. ansett. co. au; Code AN; Year Founded 1990. During the fall of 1990, in preparation for Australia airline deregulation, the pioneering Ansett Airlines of Australia (Pty.), Ltd. is renamed. Despite the change, it will continue to remain the oldest scheduled passenger airline to bear its founder’s name. A new color scheme is applied to the carrier’s 34 aircraft. It features white fuselages, black “Ansett Australia” markings, and a version of the Australian flag on the tail. New uniforms are provided for the company’s 9,611 employees.
In November-December, flight attendants are involved in an exchange program with customer service representatives from America West Airlines. The program, initiated by Ansett Managing Director Graeme J. McMahon, is designed not only to share experiences but to provide some Ansett flight employees experiences in a deregulated environment that they may pass on to others.
A total of 5,276,034 passengers are transported on the year under both names, a 21.7% increase over 1989. Freight traffic jumps 14.3% to 60.25 million FTKs.
The workforce is cut 5.8% in 1991 to 9,050 and the fleet now includes 11 Airbus Industry A320-211s, 5 Boeing 727-277As, including 1 leased out to Polynesian Airlines/Cook Islands International, 16 B-737-377s, 5 B-767-277s, 3 Fokker 50s, including 1 leased to Austrian Air Service, 2 out-of-service Fokker F.27-200s, and 1 F.27-600QC.
During February, new services are started from Perth to Brisbane and Cairns, with both routes operated via Ayers Rock.
B-737-377s enter service in May on the Sydney to Ayers Rock service. In September, keeping pace with Australian Airlines (Pty.), Ltd., the carrier introduces a stringent frequent flyer program that requires an A$30 entrance fee and awards credits good only for one year.
Passenger boardings leap upward by 24.9% to 65,81,369 and freight climbs 41.6% to 83.87 million FTKs. Expenses exceed income and there is a A$23.8-million operating loss.
A twelfth A320-211 joins the fleet in 1992 and orders are placed for 10 A321-111s. A fare and semantics war is entered into with competing Australian Airlines (Pty.), Ltd. during April. To counter Australian’s new Premier Class, Ansett drops its first-class service to business-class level, business to economy, and offers deep discounts on coach seating. In addition, Australian files suit against Ansett, claiming that it’s monopoly use of Hamilton Island Airport violates the national trade practices law. The suit will later be dropped.
Ansett now withdraws from its support contract with Polynesian Airlines, Ltd. (renewed for a decade in 1987); five years of legal wrangling and claims by both sides will ensue.
Rival Australian Airlines (Pty.), Ltd. is taken over by Qantas Airways (Pty.), Ltd. in September, following the government’s surprise July decision to reverse its ban on cross-airline investment. In conciliation to struggling Ansett, the new International Air Services Commission authorizes the company to operate international flights on Asian routes not flown by Qantas. Meanwhile, in August, a code-sharing agreement is signed with the American major Northwest Airlines. It is followed in September by a marketing deal with United Airlines that provides for code-sharing on numerous Ansett domestic services.
Customer bookings for the year increase 35.9% to 7,507,643 while cargo accelerates 22.9% to 86.81 million FTKs. The year’s operating profit is A$12.1 million.
In 1993, Chairman Kenneth E. Cowley and Managing Director McMahon, who began with the company as a mail boy in 1955, employ 11,159 workers. The fleet over the past two years has been expanded by the addition of 3 British Aerospace BAe 146-300s and 1 leased B-737-33A.
As a result of its 25% purchase of Qantas Airways (Pty.), Ltd., British Airways, Ltd. (2) in January drops its frequent flyer affiliation. Ansett immediately takes up new alliances with Alitalia, S. p.A. and Deutsche Lufthansa A. G. The arrangement with the German line will provide for reciprocal frequent flyer programs, shared lounges in Sydney, Melbourne, and Brisbane, and connecting services from Frankfurt to Sydney and Brisbane via Melbourne.
The marketing agreement is initiated with United Airlines in February; the program provides for frequent flyer program linkage, reciprocal lounge access, and code-sharing over various Ansett domestic routes to such destinations as Melbourne, Sydney, and the Gold Coast.
In July, company officials are nearly as surprised as those at Qantas Airways (Pty.), Ltd. when the Australian International Air Services Commission awards Ansett the majority of slots that will become available to Australia when the new airport opens at Osaka (KIX) late in 1994. Ansett is authorized four weekly B-747 services and plans are made to begin service, possibly with leased Jumbojets. In celebration of its international status, the company establishes an international division and prepares to implement a new corporate identity.
In August, the company signs an agreement, effective the following year, to code-share and to participate in the frequent flyer program of Malaysia Airlines, Ltd. (MAS). The company’s first international market, Bali, is opened in September. Flights to the popular Indonesian vacation resort are conducted from Perth, Sydney, Brisbane, Melbourne, and Darwin.
The subsidiary Ansett W. A. (Ansett Western Australia [Pty.], Ltd.) ceases to trade as a company subsidiary and is folded back into its parent, now known as Ansett Australia Holdings, as are the subsidiaries EastWest Airlines, Ltd. and Ansett Express (Pty.), Ltd. Equity partnership discussions are held with both Singapore Airlines, Ltd. and Air New Zealand, Ltd.
Passenger boardings jump 6.4% to 9,260,418 while freight grows by 4.9% to 94.76 million FTKs. The pretax profit is $A42.8 million.
The integration of EastWest Airlines (Pty.), Ltd. and Ansett Express (Pty.), Ltd. is completed on January 1, 1994. During the spring, the company begins to make plans for its own public stock offering, two years hence, during which it hopes to raise upwards of A$1 billion.
Having divested itself of most of its peripheral activities over the past three years, Ansett Transport Industries, Ltd. now changes its name to Ansett Australia Holdings, Ltd. to reinforce its airline focus. The first code-sharing service with Malaysia Airlines, Ltd. (MAS) begins in June on services from Australia to Auckland and Christchurch, New Zealand.
In August, a new blue and gold livery is unveiled, which, although it ends Ansett’s use of a stylized Australian flag, retains the Southern Cross and adds a new seven-point “Ansett Star.” A stylized “A” is painted on aircraft tails and the airline’s name on fuselage sides.
A new subsidiary—Ansett International (Pty.), Ltd.—is created and two, later three, B-747-312s (dubbed “Spaceships”) are leased from Singapore Airlines, Ltd. At the same time, the company relinquishes its rights to fly to Singapore and Malaysia. Employing the chartered Jumbojets, the company in September inaugurates a deep-discount, one-month fare to lure passengers aboard its new services from Sydney to Osaka’s new Kansai International Airport (begun on August 30), as well as its new thrice-weekly roundtrips to Hong Kong.
In October, just two weeks after making application for the only weekly Sydney-Beijing route available, Ansett withdraws its request, deciding that B-747 operations to China will prove too expensive.
The crew of a B-747-377 with 253 passengers (including 247 Japanese), aborts the aircraft’s October 20 flight to Osaka and turns back to Sydney’s Kingsford Smith Airport after an indicator shows low oil pressure in one engine, which is shut down. The plane’s nosewheel mechanism fails to lock on touchdown, sending the 11-year-old jet into an 800-m. skid before it comes to rest 600 m. from the end of the runway. No injuries are reported but investigations reveal the skin of the plane to be damaged on a 10-15-m. stretch forward of the nosewheel area.
Also during the month, the carrier inaugurates code-sharing services with Malaysia Airlines, Ltd. (MAS) via Sydney and Melbourne, to Adelaide, Cairns, Canberra, the Gold Coast, and Hobart and from Sydney, Melbourne, and Adelaide to Kuala Lumpur. The two carriers, under the pact initialed a year earlier, also link their frequent flyer programs.
Plans are made at the end of the year for the introduction into the fleet of the first of 5 A320-211s and the retirement of the last 2 remaining
F.28-1000s and 2 F.28-3000.
Enplanements for the year climb 6.8% to 11,289,000, but freight declines by 3.9% to 104.49 million FTKs. Ansett Holdings reports its revenues up 12.8% to A$2.2 billion and that profits have been generated: A$154.6 million (operating) and A$112.2 million (net).
After two years of cost cutting, the company’s workforce in 1995 totals 15,000. To celebrate the centenary of Banjo Peterson’s famous song Waltzing Matilda, a B-737-377 has a scene from the song painted on its forward fuselage.
Discussions are held concerning possible shareholding for Air New Zealand, Ltd. In addition, new frequencies are inaugurated to Hong Kong, Japan, and Indonesia. The first A320-211s arrive in August. The company begins to shift smaller aircraft off regional routes, which it turns over to such affiliates as Kendall Airlines (Pty.), Ltd.
Code-sharing starts with EVA Air, Ltd. in November over a thrice-weekly B-747-377 route from Sydney via Kuala Lumpur to Taipei; shared seating is also assigned on certain Australian domestic frequencies. The same month, a pact begins with Virgin Atlantic Airways, Ltd. that provides for joint U. K. to Australia via Hong Kong fares and shared marketing in London and Sydney. Meanwhile, a third B-747-377 arrives from Singapore Airlines, Ltd.
During the third week of November, a memorandum of understanding is signed with TNT, Ltd. Under its terms Air New Zealand, Ltd. will purchase from TNT a 25% stake in Ansett Australia for A$200 million. In addition, it has the option through February 15, 1998, to purchase another 25% for A$225 million. If this second stock option is not taken up, TNT will have the option to buy back the initial 25% share. Both the Australian Foreign Investment Review Board and New Zealand’s Commerce Commission must review the deal. By month’s end, the code-shared service between Australia and Malaysia is up to 11 flights each week: daily from Melbourne to Kuala Lumpur, 4 flights direct from Sydney, and 4 flights from Sydney to Kuala Lumpur via Melbourne.
In December, twice-weekly, block-seat, code-sharing flights begin with Aerolineas Argentinas, S. A. on the trans-Tasman service from Sydney to Auckland aboard an Ansett B-747-377. The flights are planned to connect with the Argentine major’s flights to and from Buenos Aires. Also during the month, the carrier undertakes its own weekly flights from Sydney to Taiwan, exclusive of EVA Air, Ltd.
The traffic figures of 11,508,172 represents only domestic passengers.
Airline employment grows by 6.5% in 1996 to 17,977. In a preliminary January ruling, the New Zealand Commerce Commission disapproves of Air New Zealand, Ltd.’s arrangement with TNT, Ltd. It advises all interested parties that they may make written comments on the proposed sale until February 29 and give oral presentations in March, but that it will make a final determination on April 3. Twice-weekly B-747-377 flights to Jakarta commence in February.
To improve connections with regional affiliates and among its own fleet, the carrier, during the first quarter, installs a new flight management system developed by Deutsche Lufthansa, A. G. The new system is able to take the schedules of competing airlines into consideration when revising Ansett’s own schedule.
The New Zealand Commerce Commission, fearing a monopoly over New Zealand’s domestic routes, rules on April 3 that Air New Zealand, Ltd. may not purchase the TNT, Ltd. interest in Ansett.
KLM (Royal Dutch Airlines, N. V.) and Royal Tongan Airlines become partners in April. The former joins in initiating joint international services and joins with Ansett on domestic Australian routes between Adelaide, Brisbane, Cairns, Canberra, Melbourne, and Sydney. Royal Tongan code-shares on Ansett’s trans-Tasman routes. In May, four-times-per-week B-767-324ER service is inaugurated from Sydney to Kuala Lumpur via Jakarta.
The Commerce Commission reverses its April decision in late June after News, Ltd., which also holds 50% interest in Ansett Australia (Pty.), Ltd., steps forward at mid-month and acquires 100% ownership of Ansett New Zealand, Ltd. The new equity arrangement ends New Zealand government’s monopoly concerns; however, the TNT, Ltd. purchase still must be approved by two Australian bodies, the Foreign Investment Review Board and the Competition and Consumer’s Commission. These arrangements will be completed over the summer.
On July 2, Ansett begins to code-share with Korean Airlines/Korean Air (KAL) over return routes from Brisbane and Sydney to Seoul. Company B-747-377s fly the route twice weekly. Other new services are independently inaugurated to Jakarta, Taipei, and Kuala Lumpur.
The formal A$325-million buyout of the TNT, Ltd. interest is approved by the TNT board in early September. Air New Zealand, Ltd. pledges to invest A$150 million in Ansett (taking 65% of the needed funds from its own cash reserves, while borrowing the remainder), while the Australian airline’s remaining half-owner, the News, Ltd., pledges a third of that amount.
The ANZ courtship finally pays off in October as the company is able to acquire both Ansett stockholder and Australian government approval for its purchase of a 50%, A$475-million stake in the Australian independent’s parent, Ansett Holdings. News, Ltd. CEO and Ansett Chair-man/CEO Cowley is given a new contract that retains his services for another five years.
A major commercial agreement is now put in place between the two carriers that will implement code-sharing on trans-Tasman flights to Auckland and internal Australian domestic routes, offer passengers reciprocal frequent flyer program participation, and lounge and club facilities.
To replenish its coffers after the Ansett purchase and to increase the number of shares held by foreign investors from 35% to 49%, Air New Zealand, Ltd. now offers a prorate issue of 121 million shares for sale. The offering brings in NZ$242 million, including NZ$47 million (US$32.9 million) from rival Qantas Airways (Pty.), Ltd., which now holds a 19.4% stake.
Electronic ticketing comes to Ansett during the third week of November. When the service is introduced on 28 domestic routes, it is so successful its first day that a 20% passenger use rate is experienced. On December 2 the company announces that ticketless travel will be available on all 140 domestic routes by the first of the year. The board now seeks to appoint new leadership; Chairman Cowley and Chief Operating Officer Hugh Thorburn both resign to make way for former Cathay Pacific Airways (Pty.), Ltd. Managing Director Rod Eddington.
Full customer bookings (domestic and international) inch up 2.8% to
12,160,000 and operating income moves up 5.5% to A$2.56 billion. Costs, however, rise 9.5% to A$2.57 billion and leave an A$14.47-mil-lion operating loss. Still, a net A$45.47-million net profit is reported. Debt stands at A$1.7 billion.
The workforce is reduced by 5.1% in 1997 to 17,067. Former Cathay Managing Director Eddington becomes AA’s executive chairman on January 9. On January 28, he joins Sydney Olympic Games chief executive Mal Hemmerling in announcing that the company is one of seven chosen to be official airlines for the Sydney 2000 games.
Code-sharing flights with Air New Zealand, Ltd. commence on February 1 on 66 weekly flights connecting Sydney and Brisbane with Auckland. With a first quarter loss anticipated, the company abandons its attempts to secure the rights to serve Bangkok presently held by Qan-tas Airways (Pty.), Ltd.
Also during the first quarter, an A320-211 is given a special new livery promoting the Sydney 2000 Olympic Games. The plane is unveiled at the Airshows Down Under ’97 exposition.
Ansett, which flies from Sydney to Jakarta four times a week adds a fifth weekly roundtrip on March 20.
Preparations are also made to retire the company’s last six “three-holer” Boeing 727s; those remaining are given special titles denoting the type’s 33 years of service to the airline.
Piloted by Capt. Lionel Griffiths, Flight 36, a B-727-277 with a full complement of passengers, completes Ansett’s final regularly scheduled B-727 service from Hobart to Melbourne’s Tullamarine Airport on April 1. As the aircraft taxis to the gate, it passes through a salute of water cannon spray provided by airport fire trucks. Three days later, the last two B-727-277s fly six special sight-seeing flights over Melbourne for company employees. The A$60-seats for the flights go rapidly and the day is finished with a large and festive send-off party at the Melbourne Jet Base.
At the end of April, CEO Eddington indicates that cost-cutting measures must continue and that certain as-yet unnamed elements should be merged with those of Air New Zealand, Ltd. Thirteen joint task forces are established to work out the process of merging important functions the two airlines now operate separately. The Australian Consumer Commission in early May indicates that Eddington must submit to them any merger plan before it takes effect.
The company also embarks upon fleet rationalization beginning in May. Four F.28-4000s are sold to Flight West Airlines (Pty.), Ltd., along with the former AA routes north of Brisbane to Papua New Guinea, from Brisbane to Prosperine, and from Brisbane to Norfolk Island in the Tasman Sea.
The 5 remaining Fokker 50s are turned over to Skywest Airlines (Pty.), Ltd. Five B-727-277As are withdrawn from service and sent to Aviation Partners in Miami, Florida, for conversion into freighters. Acting on behalf of Kendell Airlines (Pty.), Ltd., the company agrees to trade 4 Fokker 50s to Skyways, A. B. of Sweden in exchange for 4 SAAB 340As. Ansett now elects to delay any decision on long-term fleet replacement program concerning Boeing or Airbus aircraft until the year’s second half, by which time it will have had a chance to consult with Air New Zealand, Ltd.
On the financial front, the state of the company’s coffers and an upcoming second-quarter loss forces CEO Eddington to request that Ansett’s unions delay half of the US$12-million wage increase they had achieved the previous year in an enterprise bargaining arrangement.
When the Australian travel industry threatens to take all of its business to rival Qantas Airways (Pty.), Ltd., Ansett backs off a plan to cut commission rates by 20% for charter and domestic flights booked by travel agents; Qantas has not lowered rates.
Discussions between the carrier, Air New Zealand, Ltd., and Singapore Airlines, Ltd. are revealed in May. Plans are afoot for a codesharing arrangement that will grant the two Australasian carriers new inroads into Europe via Singapore, as well as marketing, sales, and pricing cooperation with the Southeast Asian major.
En route from Osaka (KIX) to Brisbane on May 27, Flight 822, a B-747-312 with 11 crew and 79 passengers, hits a short, sharp pocket of air turbulence south of Papua New Guinea. Sixteen Japanese tourists and a cabin attendant are hurt; upon arrival at the airliner’s destination, 12 are treated on scene for cuts, lacerations, and bruises while five are hospitalized.
As the relationship with Air New Zealand, Ltd. solidifies, Ansett, in early June, announces that it will close its own offices at Auckland, London, Frankfurt, Singapore, and Los Angeles and combine its operations in those cities with its partner.
On June 21, AA, Singapore Airlines, Ltd., and Air New Zealand,
Ltd. jointly sign a memorandum of understanding for the creation of the largest airline alliance in Southeast Asia. The compact contains what has become the normal large-scale partnership compact ingredients of shared networks, codes, marketing, scheduling, reservations, planning, purchasing, cargo, frequent flyer programs, information technologies, and ground and passenger services. Arrangements for certain kinds of financing, fleet rationalization, and relationships with other partners remain to be sorted out. Permission is quickly received from New Zealand regulators, but the process with the Australian Competition and Consumer Commission will take months.
Ansett and Air New Zealand, Ltd. merge their domestic New Zealand courier and air cargo units during July.
Beginning August 18, Ansett runs a special three-week promotion. Those customers who spend A$10 or more at a Shell gasoline station receive scratch cards that give them a chance to win 1 of 10,000 free flights, including 2,000 to Ansett’s foreign destinations.
On September 3 the company and Polynesian Airlines, Ltd. both withdraw their claims against one another in their dispute stemming from Ansett’s 1992 withdrawal from a support contract. The terms agreed to in the court settlement are not made public.
Also during the fall, a marketing and code-sharing agreement is signed with the regional carrier Hazelton Airlines (Pty.), Ltd.
An A320-231 arrives under lease from ILFC in October. Underscoring its alliance with Ansett and its trans-Tasman presence in Australia, Air New Zealand, Ltd. in early October, lists 277.7 million B shares on the Australian Stock Exchange. It is the carrier’s first listing outside of New Zealand.
As the result of a detailed set of recommendations from Bain Consulting, CEO Eddington orders a wide-ranging corporate review of airline practices to begin in November. A staff publication details the procedures to be followed as a concerted method is sought to break into significant profitability.
Also in November, it is announced that the carrier will replace the unprofitable first-class service offered aboard its B-747-200s with an enhanced business-class product. Simultaneously, it is noted that Ansett is investing A$167 million (US$116 million) in a renovation of its domestic terminal at Sydney Airport in preparation for the 2000 Olympic Games.
Beginning in November, Subway™ sandwiches are served during afternoon tea on flights from Sydney, Melbourne, Brisbane, and Adelaide that depart between 1:30-4:00 p. m.
During December, both Ansett and Qantas Airways (Pty.), Ltd. are absolved by the government of any responsibility to surrender slots to new entrants starting service from any of Australia’s airports.
Enplanements this year jump 10.8% as 13,469,000 passengers are transported. Revenues for Ansett Holdings inch up 1% to A$2.188 billion, while costs rise.02% to A$3.183 billion. This year, there is a small A$5.05-million operating profit and a nice A$38.31-million net gain.
At the beginning of 1998, Ansett Australia is the 24th largest airline in the world in terms of passenger boardings and 25 th in number of employees. The fleet of 72 aircraft is 93.1% Stage III certified and includes 5 Fokker F.28s, 22 B-737s, 3 B-747s, 11 B-767s, 20 A320s, and 11 BAe 146s.
The familiar hat sported by domestic flight attendants is dropped from the corporate wardrobe on January 1.
During the first week of January, a team of six legendary swimming stars (Australians Murray Rose and Shane Gould, Americans Greg Louganis and Mark Spitz, Krisztina Egerszegi from Hungary, and Vladimir Salnikov from Russia) serve as media representatives for the company during the World Swimming Championships at Perth.
Noting that traffic is down by over 65%, the company, also in January, joins with Qantas Airways (Pty.), Ltd. and Air New Zealand, Ltd. in planning for a suspension of service to Seoul and other Korean cities. At the same time, the carrier joins with Air New Zealand, Ltd. and Singapore Airlines, Ltd. in petitioning the Australian Competition and Consumer Commission for approval of their strategic alliance.
With the start of the business travel year on February 2, the company makes several schedule changes for the times of departure from Sydney, Melbourne, Adelaide, Perth, and Darwin. Noting a sharp drop in traffic, the biweekly Sydney-Seoul-Brisbane-Sydney service is suspended on February 8.
Early in the year, a three-way code-sharing pact is entered into with Air New Zealand, Ltd. and EVA Airways, Ltd. The pact takes effect on April 1 with the introduction of dual-designator flights to Taipei. Plans for code-shares to Hong Kong, Osaka, and China are shelved because the bilateral agreements between the affected nations do not allow third country code-shares.
Also at the beginning of the second quarter, the company institutes a new program under which employees will receive significant benefits if they retire early. Over 1,000 workers indicate interest.
On April 4, a new Saturday-only night roundtrip is introduced from Brisbane to Bali.
On May 14, the company joins with Air New Zealand, Ltd. in signing a memorandum of understanding to join the “Star Alliance” in 1999. Certain unspecified “customer benefit” prerequisites must now be fulfilled.
Due to a lack of traffic and discounts that produced losses, the carrier, on May 31, suspends its daily roundtrips from Sydney to Kuala Lumpur via Jakarta.
On June 8, the Australian Competition and Consumer Commission gives its draft approval for the airline’s alliance with Air New Zealand, Ltd. and Singapore Airlines, Ltd.
Meetings are held between management and representatives from 10 unions on June 11 to inform them that it will sell its in-flight catering operations and its Ansett Air Freight door-to-door retail freight business in 1999 as part of a drive to cut $135 million from its operating costs. It also begins discussions on the latest enterprise bargaining agreement, or labor agreement.
Continuing to signal a return to its core airline operations, Ansett, at the beginning of July, sells its remaining resort interest, the Hayman Island resort, together with its controversial half-interest in Hamilton Island Airport, to an Australian hotel owners’ group for A$59 million ($36.5 million).
On July 31, the Australian Competition and Consumer Commission grants regulatory approval of the tripartite pact between Ansett, Air New Zealand, Ltd., and Singapore Airlines, Ltd. The endorsement allows Chairman Eddington to move more quickly on a whole range of operational and marketing strategies he has been publicly discussing in order to cut costs and increase market share.
Saturday-only B-737-300 roundtrips commence on August 1 from Sydney and Melbourne to Broome via Alice Springs, with connections to Darwin and Ayers Rock.
Early in September, Chairman Eddington is appointed deputy chairman of Rupert Murdoch’s News, Ltd., half-owner of the airline. Eddington will also remain in charge at Ansett Australia.
Beginning on September 16, Chairman Eddington starts to reveal to employees and the public the first of some 70 points of a 3-year initiative designed to produce 10% profits that can be sustained.
In addition to planning for a five-year, A$1-billion fleet renewal undertaking, the initiation of new alliances, and cost-cutting, Eddington announces that it will turn over most of its East Coast regional routes to its low-cost subsidiary Kendell Airlines, Ltd. To operate the new services, the Kendell board approves the acquisition of 12 new regional jets, either Canadair CRJs or Embraer ERJs. Within a month, the airline chooses the former.
In this plan, flights to Launceston will end, while only one daily service will be retained from Melbourne to Hobart. Flights to Rockhampton, Mackay, Bellina, and Coffs Harbour are also suspended. Frequencies will end between Canberra and Brisbane and between Canberra and Adelaide, while those from Canberra to Melbourne and Sydney will be reduced. Kendell will assume all of these flights in November 1999.
Having lost A$55 million ($33 million) on Asian services the previous year and continuing to take losses this year, Eddington notes that flights to a number of destinations must cease.
In addition, a significant cut will be made in the senior executive ranks. The jobs of 300 managers are vacated and these personnel are required to reapply for posts in a streamlined bureaucracy—and many will not be successful.
It is noted on October 5 that the route from Sydney to Shanghai has been suspended because of China’s delay in granting Australia preferred tourist destination status. A new flight to Taipei will, however, be added, along with service to Fiji, on October 25.
Glenn Mitchell of the Victoria Herald Post reports on October 26 that Ansett has entered the record books with a “first” it probably would as soon have not earned. Increasing heroin and amphetamine use on its domestic and international aircraft have forced it to, controversially, fit its planes with syringe disposal bins. The dramatic public health step against a clear risk to the safety of customers and staff, taken after consultation with the Los Angeles-based International Airline Medical Advisory Council, is applauded by the Australian Medical Association, but condemned as “insane” by Prime Minister John Howard’s National Council on Drugs. The Ansett action has been triggered by the September arrest of an Ansett passenger who had publicly injected heroin while on a flight from Melbourne to Brisbane. The airline, like others, reports that syringes containing heroin and amphetamines have been found in toilet bowls and in seat pockets by cabin-cleaning crews.
On January 5, 1999, Ansett sells its 68.2% stake in the Australian Diners Club payment card company to Diners Club International. The move is made as part of the airline’s effort to improve its profit margin.
After a two-day period in which special decals are applied, a B-737-377 is unveiled on January 19 wearing a striking, 12 m.-long visual image of the 3 Sydney 2000 Olympic Games mascots—Olly the kookaburra, Syd the platypus, and Millie the echidna. The aircraft, with actors in costumes representing the three, depart Sydney for a goodwill flight around Australia. They will visit Broome, Port Hedland, Kalgoorlie, Alice Springs, Hobart, Adelaide, Brisbane, Melbourne, and other points.
Having elected not to take a stake in China Airlines, Ltd. (CAL), Singapore Airlines, Ltd. now turns its attention to Ansett.
Beginning on February 1, Ansett places its code aboard Flight West Airlines (Pty.), Ltd. daily roundtrip flights operating from North Queensland to Port Moresby.
Two B-747-412s are leased from Singapore Airlines, Ltd. on February 4. On February 10, Ansett joins with Qantas Airways (Pty.), Ltd. in voicing opposition to the “open skies” aviation policy currently being studied by the government’s Productivity Commission.
A strategic agreement with All Nippon Airways Company, Ltd. (ANA) is announced on February 16. Under its terms, the two companies link their frequent flyer programs and offer common use of airport lounges and through check-in services. Code-sharing on revenue passenger flights will commence shortly.
Accompanied by Chairman Eddington and Deputy Chairman/CEO Cheong Choong Kong of Singapore Airlines, Ltd., News Corp. Senior Executive Vice President Lachlan Murdough, on behalf of owner Rupert Murdoch, meets with Australian Prime Minister John Howard and Treasurer Peter Costello in Canberra on March 22. Singapore had unsuccessfully attempted to gain shareholding in Qantas Airways (Pty.), Ltd. in 1992 and has remained desirous of a gaining a larger foothold in the big Australian domestic market. The conference follows on the heels of a visit to Canberra earlier in the month by Singapore Prime Minister Goh Chok Tong.
As reported in The Age next day, the men lobby the government leaders for permission to have Singapore Airlines buy a stake in Ansett, which is now jointly owned by News Corp. and Air New Zealand, Ltd. Although unstated, Singapore’s stake is believed to be the same 25% that British Airways, Ltd. holds in Qantas Airways. Doreen Siow of Reuters reports that the arrangement will see News Corp. turn over its 50% stake in Ansett for more than A$500 million. As Prime Minister Howard tells the Australian Broadcasting Corporation, half of Ansett Australia is already foreign-owned and any sale to Singapore Airlines would be a simple foreign transaction that should be worked out by the companies involved under Australian law. Approval is expected from the Foreign Investment Review Board, which will next review the offer.
Also at the time of their visit, Murdoch and Eddington ask Howard and opposition leader Kim Beazley to oppose a national “open skies” policy toward foreign airlines.
At a joint news conference on March 25, News Corp. Chairman Murdoch, Chairman Eddington, and Deputy Chairman/CEO Kong formally announce the understanding under which News Corp. is selling its 50% stake in Ansett to Singapore Airlines for A$500 million. Several hurdles remain to be jumped before the deal is officially completed, including regulatory approvals, due diligence, Air New Zealand, Ltd.’s preemptive right to buy News’ stake in place of Singapore Airlines, and the conclusion of a sale and purchase contract. If these conditions are satisfied, the transaction will be finalized in the months after July 1 and Eddington will remain in his post for at least two years.
At a news conference on March 27, Sir Selwyn Cushing, chairman of Air New Zealand, Ltd. and of its major shareholder, Brierley Investments, indicates that his airline may exercise its preemptive right to match the Singapore Airlines offer. To that end, a task force is put together to investigate the possibility of full ownership of Ansett.
Air New Zealand, Ltd. and Ansett formally become the seventh and eighth members of the “Star Alliance” on March 28; Singapore Airlines, which hopes to purchase Ansett as well as a stake in Thai Airways International, Ltd. (THAI) , has indicated that it, too, wishes to join the multinational alliance.
Under terms of the code-sharing arrangement, daily ANA service between Osaka (KIX) and Sydney via Brisbane is replaced, also on March 28, by Ansett-operated B-747-412 flights carrying ANA’s code.
At the beginning of April, Ansett renews its agreement with Hazelton Airlines (Pty.), Ltd. for another five years. Ansett also gains right of first refusal on a minimum 20% of Hazelton’s shares.
As the Singapore merger perks along in April, Ansett and its rival, Qantas Airways (Pty.), Ltd. continue to find themselves on the same side in their continued opposition to the government’s proposed “open skies” policy for domestic routes. Both companies hint broadly that they will reduce regional services if foreign airlines are allowed to operate within Australia.
Representatives from the two carriers meet with the Australian federal transport minister, employing various commercial arguments to support their opposition. Their efforts are apparently made to no avail; indeed, on April 30, both airlines are publicly rebuked by the minister, whose spokesman informs the Australian Associated Press that the civil leader objects to their using services to regional Australians as a bargaining chip.
On May 3, both carriers deny allegations reported in the Sydney Morning Herald that they are considering a blackout on discounts for domestic airfares before and during the 2000 Sydney Olympic games.
Airline officials submit a complaint to the Australian Football League (AFL) on May 24 concerning disruptive and abusive behavior by members of the Adelaide Kangaroo team on a June 23 return flight from Perth. The AFL promises an investigation.
Brierley Investments, Ltd. announces on May 25 that it has spent approximately NZ$106 million (US$57 million) to purchase Air New Zealand, Ltd. shares on-market. This was done to lift its stake in the flag carrier from 42% to 47.11% and increase its influence in the wider Australasian airline scene now being played with Ansett Australia and Singapore Airlines, Ltd. Some analysts suggest that the next step may be for ANZ to exercise its preemptive right to acquire the News Corp. share in Ansett and when fully in control of the Australian line to invite Singapore to buy into a merged entity. Others speculate that Brierley is seeking a way to prop up an unprofitable asset before selling it. Neither Ansett nor Singapore offer comment.
The Singapore Shipping Times on May 27 quotes Glenn Robertson, Ansett’s Olympics General Manager, as stating that his carrier has already achieved A$650 million in new and projected sales from its sponsorship of the 2000 Sydney games. It is anticipated that, by the time the contests commence in September next, Ansett will have earned at least A$900 million, as against sponsorship costs of A$50 million in cash and kind.
News Corp., Ltd., on June 9, recesses its talks with both Air New Zealand, Ltd. and Singapore Airlines, Ltd., but indicates that, once the two have come to terms concerning their equity investment in Ansett, discussions may continue. A day later, Singapore pulls out of the negotiations altogether, indicating that it will now look at investing in the flag carriers of Thailand or South Africa. In fact, Air New Zealand, Ltd. has quietly exercised its preemptive right over the News Corp. shares to block the SIA bid. Within a few days, News Corp. raises the prospective sale price for the airlines by almost A$200 million.
On July 1, Ansett begins to code-share on all Singapore Airlines, Ltd. services from Australia to Singapore, plus seven weekly roundtrips to London and four-times-a-day flights to Bangkok.
In October, Ansett, as official airline of the 2000 Summer Olympics, unveils a B-737-33A adorned with the Olympic mascots “Syd,” “Millie,” and “Olly.”
Also during the fall, Brierley Investments works to put its own financial house in order and attend to the fiscal base of Air New Zealand, Ltd. At the same time, Ansett employees are able to put forward an A$500-million counterbid for the News Corp. shares.
On November 15, 2 B-757s are sold to DHL Worldwide Express. A dedicated BAe 146 freighter service is inaugurated on November 30 from Melbourne and Adelaide to Alice Springs and Darwin. Frequencies between Sydney and Hong Kong become daily on December 3.
Customer bookings dip 0.4% on the year to 13,399,000. Group operating revenues inch up 0.1% to A$2.32 billion even as expenses fall 2.4% to A$2.23 billion. The operating profit jumps to A$97.56 million while net gain nearly doubles to A$103.64 million.
The workforce stands at 14,876 at the start of 2000, reflecting a 7.7% reduction in force over the previous 12 months. Among the world’s top 25 airlines at the beginning of the new millennium, Ansett Group has the 25 th largest net gain.
Most Australian domestic service is cancelled on February 11 as company employees meet to discuss working conditions. Thrice-weekly roundtrips from Sydney to Taipei end next day.
Air New Zealand, Ltd. acquires the outstanding News Corp. 50% stake on February 18 for A$680 million. Payment includes A$580 million (NZ$744 million) up front plus another installment within a two - to four-year period equal to 10.5% of ANZ’s issued shares (or a cash equivalent). When the transaction is completed, Ansett will have an effective value of A$1.36 billion. Although Qantas Airways (Pty.), Ltd. objects, the Australian government, which has eliminated ownership requirements on foreign ownership of domestic carriers in order to pump up airline competition, permits the sale. The new airline combine boasts A$6.7 billion in assets, an A$5.8-billion revenue base, and 24,000 employees.
The company’s licensed aircraft mechanics launch a series of three-hour strikes at Australian airports on March 6 to protest against potential job losses coming from the company’s sale to ANZ.
In a move planned the previous year, both Ansett and Air New Zealand, Ltd. join the “Star Alliance” on March 28. On April 4, a meeting of ANZ shareholders authorizes the carrier’s executives to pay the NZ$744 million (A$580 million) in up-front tranche for Ansett Australia as soon as the paperwork for the acquisition is completed. As earlier agreed, the second installment will come later.
During the spring, Air New Zealand, Ltd. begins to review future group opportunities, including personnel and fleet requirements, as well as the stalled CRJ strategy of Ansett subsidiary Kendell Airlines, Ltd. and potential competition from, among others, Sir Richard Branson’s newly formed Virgin Blue, Ltd.
Out of a job almost from the moment of the ANZ takeover, Executive Chairman Eddington is elected the new CEO of British Airways, Ltd. (2), assuming his new post on May 1. Craig Wallace, general manager of commercial planning and a close Eddington associate, is named his interim successor. The last B-727-200F operated by Ansett Australia Cargo is withdrawn on May 22 and returned to its lessor, Kitty Hawk Aircargo.
Also during late May, a company B-767-324ER brings the Olympic flame from Athens to New Zealand via Guam. On May 30, Ansett General Manager Garry Kingshott announces that, after the merger, neither carrier will change its name.
On June 8, the specially chartered A320 Unity flies the Olympic flame (in a miner’s lantern) to Ayers Rock, where it is carried off the plane by a Sydney Games board member, Anna Booth, to begin a 100-day trans-Australia torch relay prior to the Sydney XXVIIth Olympiad in September.
Permission for the Ansett takeover is granted by the Australian Competition and Consumer Commission in late June. The authority requires that Ansett International be ensured of continued service development into and out of Australia and subjects Air New Zealand, Ltd. to conditions limiting its right to rationalize Ansett personnel and routes.
The Ansett purchase is completed on June 23. Three days later, ANZ Managing Director Jim McCrae indicates that the integration of Ansett’s business fully into ANZ will take up to 18 months, although most of the work is expected to be finished within a year.
Despite fuel hedging that has saved A$37.4 million over the past year, it is acknowledged in July that avgas costs over that period have risen 49.5% to A$362.4 million.
During the first week of August, Singapore International Airlines,
Ltd. is able to complete a 25% purchase into Ansett’s new parent, thereby gaining three board seats and a voice in the management of the Australian subsidiary.
ANZ Chairman Sir Selwyn Cushing announces a regrouping of the two merger partners on August 10 into a new Air New Zealand Group, Ltd. structure.
The carrier and Qantas Airways (Pty.), Ltd. now become involved in a fare war with discount airline Impulse Airlines (Pty.), Ltd., which is offering A$33 one-way seats between Brisbane and Sydney.
On August 14, the two begin to match the upstart’s prices for the route.
When the Air New Zealand Group, Ltd. comes into effect, also on August 14, it features three coordinating core units and special purpose business units. The core units include a strategic leadership Corporate Centre, a Commercial and Operational Core, and an Australasian Airline System Core, which coordinates the group’s three domestic airline families (Ansett Australia, the Ansett regionals in Australia, and the New Zealand domestics). Ansett International and Air New Zealand International are left as separate entities, along with cargo, terminal, and engineering services.
Cushing also announces certain personnel changes. Ansett’s interim CEO Wallace is now replaced by Andrew Miller, ANZ’s domestic operations chief, while ANZ’s marketing boss, Garry Kingshott, is named to lead the Ansett international division. Three other Ansett executives are released.
With assets of A$6.69 billion (NZ$8.58 billion), 24,000 staff, 186 aircraft, and 19 million annual passengers, the new group is viewed as one of the top 20 airline groups in the world.
The fare wars intensify as the month continues. To grab the initiative before Virgin Blue, Ltd. starts up in early September, Ansett and Qantas both offer a presale for one day of 250,000 tickets discounted by 85%; fares for shorter trips drop as low as A$55 while transcontinental tickets can be had for A$165. As the XXVII Olympics open on September 15, the carriers find that Australian demand for flights to Sydney is much lower than expected—most residents decide to view the games on television.
Qantas Airways (Pty.), Ltd. Deputy CEO Gary Toomey is named Air New Zealand, Ltd. CEO on September 28, effective in December.
Ansett begins code-sharing on ANZ domestic services in New Zealand on October 2. Four days later, Ansett Holdings purchases a 20% stake in the east coast regional Hazelton Airlines (Pty.), Ltd. from the Hazelton family. On October 12, the holding company makes an A$15.3 million (US$14.2 million) offer for the 13.11% ownership the family retains.
On October 29, the carrier begins four-times-a-week roundtrip service from Melbourne to Hong Kong.
ANSETT EXPRESS (PTY.), LTD.: Australia (1990-1992). In preparation for Australian airline deregulation, the former Ansett NSW (Pty.), Ltd. changes its name during the fall of 1990. Hubbing at Brisbane rather than Sydney, the carrier expands from New South Wales, becoming a point-to-point operator to other states. Under both names, General Manager Jon Hutchinson’s 309-employee company, equipped with 2 new Fokker 50s and 6 F.28-4000s, the latter acquired from East-West Airlines (Pty.), Ltd., flies a total of 553,773 passengers on the year, a 68.7% boost over 1989.
The workforce is cut 2.6% in 1991 to 301 and the fleet now includes 7 Fokker 50s, 3 of which are out of service, 2 Fokker F.28-1000s, 2 F.28-3000s leased from Cimber Air, A. S., 5 F.28-4000s, and 1 Mohawk 298 chartered from Southern Pacific Regional Airlines, Ltd. A number of new routes are initiated including a high-speed Sydney-Canberra shuttle, service to Canberra, Rockhampton, and Mackay. In addition, frequencies are launched to Tasmania from Brisbane, Canberra, and Launceston. Customer bookings inch up 1.8% to 549,319.
Operations continue apace in 1992 and, in late 1993 the company ceases to trade as an Ansett subsidiary and is folded into its parent.
ANSETT NEW ZEALAND, LTD.: New Zealand (1986-2000). In August 1986, the subsidiary Ansett New Zealand, Ltd. is formed to provide New Zealand government-ordered competition with Air New Zealand, Ltd. over domestic routes. The older Ansett entity, Airlines of New Zealand (Pty.), Ltd., together with Newman’s Air, Ltd., forms the basis upon which the new company will be built. The concern is jointly owned by Ansett (50%), Newman’s Air, Ltd. (22.5%), and Brierly Investments (the remainder). Former Air New Zealand, Ltd. executive Ross B. Keenan is CEO.
The new entrant is provided with two de Havilland Canada DHC-7-102s in July 1987. Daily commuter flights are now begun from Auckland to Wellington and Christchurch. The first purpose-built terminal is opened at Wellington on July 23.
Flights are added in September to Glentanner near Mount Cook, Rotorua, and Queenstown. Two more terminals are opened—Auckland on October 30 and Christchurch on November 5.
Claiming release of its traffic figures will weigh against it in the competition with Air New Zealand, Ansett refuses to make available any results. It does, however, begin to install its award-winning Golden Wing lounges at the major New Zealand airports.
In January 1988, the carrier shares with Air New Zealand, Ltd. the 1987 “Passenger Service Award” from Air Transport World magazine. During the summer, 5 Boeing 737-177s are leased from the parent, which has obtained them from Deutsche Lufthansa, A. G. by way of America West Airlines.
New destinations visited, starting in July, include Dunedin and Palmerston North. In October, daily nonstop and direct first-class and hot meal service is initiated between Auckland and Christchurch, while earlier services to Mount Cook, Queenstown, and Rotorua are maintained.
Although traffic figures are again withheld, the press notes how the privatized state carrier’s monopoly is broken by the Boeings and follows the new competition, widely denounced in some quarters.
Brierley Investments withdraws from the airline and Newman’s has no option but to follow. Ansett Transport Industries takes up the vacated shareholding and the carrier becomes a wholly owned ATI subsidiary.
Early in 1989 orders are placed for 7 British Aerospace BAe 146-300 Whisper Jets and 2 BAe 146-200QC Quick Convertibles. In April, a New Zealand Airpass is introduced for international travelers planning extensive travel in the country; it allows them to construct their own itineraries at considerable savings.
Wellington-Nelson roundtrips begin in June. In addition, Rex Aviation, Ltd. becomes a Tranzair commuter affiliate, offering connecting services across Cook Strait.
The premier Whisper Jet arrives in July and allows the carrier to provide the nation’s first jet service into Queenstown. Also during the month, frequencies are initiated to Invercargill and withdrawn from Glentanner. Orders are now placed for 6 B-737-500s.
Northern Air, Ltd. becomes a commuter affiliate, providing a Tranz-air link to Auckland from Whangarei.
Former Polynesian Airlines, Ltd. General Manager John Buchanan is appointed CEO in October and the first BAe 146-200QC enters service, operating as a passenger plane by day and a freighter at night.
A major 39% expansion of service is launched across the flight network in November. Frequencies between Auckland and Christchurch are increased from 46 to 87 per week while, percentage-wise, service between Auckland and Wellington grows by 21% and between Wellington and Christchurch, 15%. Indeed, the new schedule, taking advantage of the newly delivered BAes, increases the company’s total number of flights per week from 350 to 551. Beginning in December, smoking is banned on all flights.
The 1990 fleet is increased by the addition of a second BAe 146-200QC and two de Havilland Canada DHC-8-100s, which replace the DASH-7s. Authority is sought to begin flights to Asia, North America, and into the Pacific.
Executive Class service is introduced in January; it replaces first-class service entirely and, offering several amenities, is available for NZ$33 over regular fares. Also during the first quarter, the former German B-737-177s are all withdrawn.
In May-June, the company nearly stops flying, but agrees to continue on after receiving reassurances from the New Zealand government. This, plus a promise from Qantas Airways (Pty.), Ltd. to continue flying Ansett passengers to the country even after its purchase (in conjunction with Japan Air Lines Company, Ltd. (2) and American Airlines) of Air New Zealand, Ltd. is implemented. Also in June, the airline introduces New Zealand’s first in-flight bar service on domestic flights.
In November, Auckland to Christchurch service is increased from 47 to 87 flights per week.
In January 1991, the company begins nonstop BAe 146-300 “Whis-perjet” service from Queenstown to Rotorua. Rex Aviation, Ltd. begins Tranzair roundtrips in October between Wellington and Blenheim.
For the first time, customer bookings exceed one million this year.
Operations continue apace in 1992 and, in September, a marketing and code-sharing agreement is signed with United Airlines that give the U. S. major access to various New Zealand destinations via Auckland.
In 1993, Managing Director Craig Wallace employs a workforce of 1,015 and operates a leased fleet comprising 7 BAe 146-300s, 2 DHC-8-102s, and 2 BAe 146-200QCs. The Canadian-built de Havil-lands offer commuter flights to Blenheim, Nelson, Palmerston North, Whakatane, and Whangarei. Fierce competition continues with Air New Zealand, Ltd. and the operating loss increases from NZ$18 million to NZ$20 million.
The employee population grows by 1% in 1994 to 1,030, although the fleet is not changed. A new livery is introduced in January and, in June, Malaysia Airlines, Ltd. (MAS) begins to code-share on the Auckland-Christchurch routes.
All frontline personnel (reservations, ground handling, etc.) receive new uniforms in July. A new corporate logo and livery are introduced in November.
Enplanements for the year total 1.9 million and the loss “improves” to minus NZ$5 million.
Twenty-eight new employees join the company in 1995, a workforce increase of 6.8%. The first BAe 146-300 to wear the new livery enters service early in January. It immediately goes on tour, introducing the Auckland Warrior’s Rugby League team to the country.
Additionally, a third de Havilland, chartered from Flight West Airlines (Pty), Ltd. joins the fleet, and replaces a BAe 146-300 on the Christchurch to Invercargill service. The freed-up capacity allows the company to put on additional BAe 146-300 flights during March-April on the main trunk route between Auckland and Wellington while the B-737-200 fleet of rival Air New Zealand, Ltd. is grounded for engine repairs.
While on approach to Palmerston North after a June 9 service from Auckland, Flight 703, a DHC-8-102 with 3 crew and 18 passengers is unable to completely lower its main landing gear. As the crew struggles to accomplish this task, the aircraft falls below minimum altitude, hits the peak of a tree line, and crashes 8 km. from the runway (4 dead).
In the late fall, Rex Aviation, Ltd. takes over the Northern Air, Ltd. Tranzair link between Whangarei and Auckland.
A national air traffic controllers’ strike occurs on December 4-6 and 12-15. The job action has an impact on traffic as, for example, on December 14, when the company is only able to operate 7 of its usual 15 Wellington to Auckland services.
Plans are made late in the year to begin flying to Hamilton. Passenger bookings ascend 5.6% to 1.9 million, but financial results are not reported.
The Tranzair commuter brand is replaced on February 29, 1996, by a new Ansett New Zealand Regional service. Rex Aviation, Ltd. takes over the Whakatane to Auckland route previously flown by Bell Air, Ltd. Rex now provides all Ansett New Zealand Regional flights with a fleet of 5 Embraer EMB-110P-1 Bandeirantes.
In March, flights commence in cooperation with Cathay Pacific Airways (Pty.), Ltd. on trans-Tasman routes to Auckland and Christchurch. In early April, fearing that a monopoly would be created over domestic routes, the New Zealand Commerce Commission refuses an application by Air New Zealand, Ltd. for permission to purchase a half-interest in Ansett Australia (Pty.), Ltd.
The Commerce Commission reverses its April decision in late June after the News Corp., which also holds 50% interest in Ansett Australia (Pty.), Ltd., steps forward at mid-month and acquires 100% ownership of Ansett New Zealand, Ltd. The new equity arrangement ends New Zealand government’s monopoly concerns; however, the TNT, Ltd. purchase still must be approved by two Australian bodies, the Foreign Investment Review Board and the Competition and Consumer’s Commission. The government panels approve the acquisition in September and ANZ is reformed with a separate new board of directors and management.
In October, Rex Aviation, Ltd., operating as Ansett New Zealand Regional, ceases services to Whakatane. The Bandeirantes are relocated to the Auckland-Whangarei sector, replacing the Piper PA-31-350 Navajo Chieftains that had operated the route previously.
The fleet in 1997 includes 10 BAe 146s and 3 DHC-8-102s. Arrival of a fourth DHC-8-102, on lease from Flight West Airlines (Pty.), Ltd., in the spring allows Hamilton service to begin and the company now controls 30% of the domestic market in competition with Air New Zealand, Ltd.
Throughout the first half of the year, merger discussions are held between the carrier’s new leadership and the management of Qantas Airways (Pty.), Ltd. concerning a possible takeover of the New Zealand regional by the Australian major.
When merger discussions break down during the summer of 1997, Qantas Airways (Pty.), Ltd. gives consideration of moving the BAe 146 fleet of its Nation’s Jet System (Pty.), Ltd. subsidiary to New Zealand and entering the Kiwi domestic market directly. It may also elect to compete only on the more profitable of Ansett New Zealand’s local routes.
To mark the occasion of its tenth anniversary in July, the airline commissions artist Dick Frizzell to turn one of its Whisper Jets into a flying display of children’s’ artwork as a fund-raiser for the staff-administered Ansett Stars Charitable Trust.
During the fall, negotiations with Qantas resume.
A cooperative agreement with Qantas Airways (Pty.), Ltd. is signed during the first quarter of 1998. Under its terms, the two companies agree to link their frequent flyer programs and Ansett New Zealand is able to introduce ticketless travel. Although discussions concerning a possible takeover continue, no firm decisions are made.
Route rationalization is undertaken and, as the result of continuing losses, the route between Auckland and Whangarei is closed on August 1. The DHC-8-102s begin flying to Dunedin in September while a BAe Jetstream 32 is placed on the route between Wellington and Rotorua in October.
On revenues of NZ$261 million, a loss of NZ$2.9 million must be reported. Heavy competition, the Asian economic crisis, and a huge drop in New Zealand tourism have all contributed to the downturn.
The first of 3 additional Jetstream 32s is delivered in March 1999, replacing the long-serving Bandeirantes. A new terminal is opened at Wellington in June, the same month in which partner Rex Aviation becomes a wholly owned subsidiary.
Midyear, the carrier is plagued by a series of one-day strikes for the carrier to cut its weekly schedule from 100 to 18 services, with some destinations dropped entirely. The strife leads to a pilot lockout on September 16 after the aviators fail to accept a new cost-cutting contract.
The airline refuses to negotiate with the pilots and, instead, prepares to hire replacement pilots, including many newly available after the failure of Debonair Airways, Ltd. on September 30. The flyers accept the earlier-offered contract on October 14 and ratify it on October 24; most services are back to normal by year’s end.
The carrier is sold by News Corp., Ltd. in March 2000 to a New Zealand investors group headed by the airline’s CEO Kevin Doddrell and Clavell Capital executive David Belcher. In early June, the carrier is renamed Tasman Pacific Airlines of New Zealand, Ltd.; shortly thereafter, the renamed entity is awarded the first ever Qantas franchise and is rechristened Qantas New Zealand, Ltd. on June 26. Launch day for the new carrier is September 4.
World History
