Ansett Australia
How and why did Ansett Australia Collapse?
How and why did Ansett Australia Collapse?
Ansett Australia was an airline that collapsed in 2001. what factors lead to this.
Demise
Air New Zealand, previously a 50% shareholder, acquired full ownership of Ansett in February 2000, buying out News Corporation. Competition from Qantas and a succession of start-up airlines, top-heavy and overpaid staff, an ageing fleet and grounding of the Boeing 767 fleet due to maintenance irregularities left Ansett seriously short of cash. Ansett became a drain on its parent and Air New Zealand itself was ultimately bailed out by the New Zealand Government (with the New Zealand Government giving Air New Zealand one billion dollars to stay afloat). Air New Zealand placed the Ansett group of companies into voluntary administration with PricewaterhouseCoopers on 13 September 2001. A day later, the administrator decided that Ansett was not viable and grounded the fleets of Ansett and its subsidiaries Hazelton Airlines, Kendell, Skywest and Aeropelican. It was alleged by the then administrators that Air New Zealand had engaged in asset stripping of the airline as well as charging of it's fuel costs due to AirNZ failing to hedge it's fuel costs thus leaving it susceptible to major fluctuations in fuel charges during 2000 [1][2]. This claim was angrily denied by then AirNZ Chief Executive Officer Ralph Norris[3] who noted his company intended to mount a vigorous defence against the allegations.
After receiving a federal government guarantee, Ansett resumed limited services between major cities on 1 October 2001. This was referred to as 'Ansett Mark II'. In November 2001 Ansett creditors voted in favour of the Tesna consortium led by Melbourne businessmen Solomon Lew and Lindsay Fox, to purchase Ansett. The plan included very reduced staff numbers and new aircraft. Fox and Lew said they had received no support from the government for their bid, thus withdrawing their proposal. This agreement, although well advanced, collapsed in February 2002. With no other saviours, Ansett ceased operations permanently on 4 March 2002 by which point the administration of the company had transferred to newly formed insolvency firm KordaMentha.
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