Air New Zealand wins backing for Ansett sale
Air New Zealand has put Ansett Australia up for sale after Australia’s competition watchdog indicated it might give the green light to a Qantas bid for the troubled Australian subsidiary that is losing A$1.3m (US$675,000) a day.
The Australian government has lent its support to the sale despite the fact that a deal with Qantas would give the national carrier a 90 per cent share of the domestic market.
It is more likely Ansett will be carved up. Virgin Blue, Sir Richard Branson’s discount airline, has also entered talks with Qantas over the future of Air NZ’s debt-laden carrier.
John Anderson, Australia’s federal minister for transport, said: “Under the circumstances, [Qantas/Virgin Blue] offers at this point in time the best way forward for an airline facing grave uncertainties.”
In the run-up to an election, the last thing the government needs is the collapse of Ansett, which employs 16,000 people.
Singapore Airlines (SIA) and Brierley Investments, Air NZ’s main shareholders, were only prepared to inject more cash into financially troubled Air New Zealand with Ansett out of the deal.
Jim Farmer, Air New Zealand’s acting chairman, said it was up to the Australian government to help save Ansett.
Only last week Qantas said the Australian Consumer and Competition Commission would never approve such a deal. However, Professor Allan Fels, the ACCC chairman, softened his position following talks with the government and said he did not object to a Qantas bid for Ansett. But added that the ACCC would still have to approve any deals.
One proposal would be for Qantas and Virgin Blue to carve up Ansett’s assets.
Analysts have also not ruled out SIA. Ansett was a target of the Singapore carrier until its financial position was made public.
While the Australian government is encouraging a foreign buyer to rescue Ansett – with New Zealand urging Australia to intervene – it remains unprepared to bail out the ailing airline.
Meanwhile, Air NZ is scheduled to release its annual accounts on Tuesday, with forecasts of an annual loss of more than NZ$200m.
SIA, which hopes to increase its equity in Air New Zealand from 25 per cent to 49 per cent, faced disruptions to its bid last week when Ansett revealed the extent of its troubles and Sir Richard refused to sell Virgin Blue to Ansett for A$250m.
The financial collapse of Ansett also comes as bids close next week for the $4.8bn-plus sale of Sydney Airport.
Financial Times
