However the Singaporean stake in this company is said to be much larger than it appears. An approximate estimate made by a local journalist, noted that this figure could be closer to 50 or 60%, although this is difficult to substianted due to the difficulty in getting accurate information from the Singapore government.

Singapore's Temasek Holdings has a large stake in the Camerlin Group (Msia). Also included in this elite grouping are the family of the since disgraced ex-president of Indonesia, Gen. Suharto's (via the Salim Group).

cafca@chch.planet.org.nz

Ansett calls in receiver

By Steve Creedy, Michelle Gilchrist and Jeremy Roberts

http://www.theaustralian.news.com.au/common/story_page/0,5744,2848938%255E2702,00.html September 13, 2001 ANSETT Holdings was placed in voluntary administration last night after Qantas said the airline's problems were too great for it to take on.

In a terse statement, the Air New Zealand board said it had made the move to enable Ansett to keep trading while new expressions of interest were pursued. PricewaterhouseCoopers was appointed as voluntary administrator, a form of receivership that leaves the company a slim chance of survival. Spokeswoman Robyn Newman said Ansett would operate as normal today, and that the airline was still taking forward bookings. "We don't have any deadlines imposed around the voluntary administration so the immediate message is we're still flying," she said. "We're still going to be operating some 400 flights a day and we have around about 30,000 customers booked tomorrow." The announcement ended a confusing day in which the Qantas rejection was followed by two further proposals from Air NZ. Qantas looked at Ansett's books but joined Singapore Airlines in concluding the loss-making airline was too much of a liability. "The numbers didn't stack up for what we're doing," Qantas chief executive Geoff Dixon said. Transport Minister and Acting Prime Minister John Anderson said he was disappointed at Qantas's decision, but recognised Qantas had to put shareholders' interests first. The decision to place Ansett in administration gives some breathing space to the airline's 16,000 workers. Air NZ originally threatened to place Ansett in liquidation last night, after legal advice that directors could no longer leave the company or themselves exposed to the Australian carrier's losses. The move came after Air NZ unsuccessfully tried to convince the Australian Government it should liquidate Ansett and start a new low-cost airline called Ansett 2. The Kiwis wanted Canberra to underwrite Ansett's operating losses and pay out redundancies. The Government's refusal to come to the party leaves an employee buyout by a consortium of Ansett pilots, engineers and management as the airline's last hope. But this hinges on government support to keep the airline flying. The Ansett Pilots Association said it had started talks with several leading investment banks and a "significant international airline". The union would not name the airline but industry speculation centred on Star Alliance partner Lufthansa. The consortium has retained New York management buyout specialist Keilin & Co and legal firm Corrs Chambers Westgarth for the bid. The Australian Licensed Engineers Association called for government backing for the voluntary administrator for 30 days, and proposed a restructuring that would see the airline publicly listed in 12 months. It called on the Government to back Ansett for 30 days while the administrator investigated restructuring the airline with staff equity participation. The Government would not comment on the Ansett 2 proposal but repeated it did not support a full bail-out. Mr Anderson's office did not rule out other means of support. The fate of worker entitlements remains in doubt, and unions are expected to take court action in an attempt to secure them. The corporate watchdog will seek assurances about the employee entitlements and check on solvency. "We are particularly concerned to receive an early assurance from the administrator that Ansett is able to pay in full all employee entitlements," Australian Securities & Investments Commission chairman David Knott said. "We will also be asking the administrator to provide an opinion on Ansett's compliance with the solvent trading provisions of the Corporations Act." The Australian Services Union described voluntary administration as "the least worst option". "This is a time when cool heads have to prevail," said ASU assistant national secretary Linda White. "We have an aviation meltdown in the US and globally. This is not the time to make pre-emptive decisions and we say the Australian Government has got to be prepared to put in some money to keep it trading." Ansett employees filed into a briefing at Sydney airport by the airline's airport manager, Geoff Stirk. Most talk from staff was of lost opportunities for the once strong airline and betrayal by governments and directors. "Air New Zealand over-extended themselves and never really had the capital to buy us in the first place," said five-year employee Rod Chapman. Opposition transport spokesman Martin Ferguson described the airline's collapse as a monumental crisis that should have been avoided.

The Demise of Ansett: There's a Lesson for Asia

How callousness and stupidity killed a good airline

By ASSIF SHAMEEN, Asiaweek.com

http://www.asiaweek.com/asiaweek/daily/foc/0,8773,175141,00.html

Wednesday, September 19, 2001

Web posted at 01:25 p.m. Hong Kong time, 01:25 a.m. GMT

Once upon time there was an airline called Ansett. But now it's history. It was liquidated last week and its planes have been grounded. Whodunit?

The New Zealand government and Air New Zealand blame the Australian government for refusing to recognize that Ansett had been a basket case for too long. The Australian government, which faces an election soon -- and must now deal with a backlash from 16,000 angry former Ansett employees and tens of thousands of stranded passengers -- blames the New Zealand government. Singapore Airlines, the main shareholder of Air New Zealand, blames both the New Zealand and Australian governments.

How did an airline that serves some of the most expensive routes in the world, such as Sydney-Melbourne, die when it was in such a cozy duopoly? The truth is that Ansett didn't have to perish. It was killed off by callous behavior by Australia and New Zealand, as well as by antiquated views on how companies work in today's globalized and ultra-competitive environments.

The decline of Ansett from ruddy health to death bed is startling. Just seven years ago, it had 55% of Australia's domestic market. It was then jointly owned by Rupert Murdoch's News Corp. and the Australian cargo company TNT. Because neither was really interested in running the airline, they just let it rot. Singapore Airlines, which draws 17% of its traffic from Australia and New Zealand, had been salivating over Ansett since it lost the bid to control Qantas to British Airways in 1992. Air New Zealand bought half of Ansett in 1996 from TNT and then blocked News Corp. selling its half of Ansett to SIA in 1998. Air New Zealand paid nearly $600 million for the entire airline in late 1998. That was just too much for the Auckland-based carrier. Ansett's fleet grew older and older until it was the oldest of the world's large commercial carriers. Its market share plummeted because its owners minimized marketing and sales expenses. Its reputation took a dive. Add to that increased fuel costs and the higher cost of maintenance, insurance and all the rest. Getting the picture?

But really the fault must lie squarely on the shoulders of New Zealand Prime Minister Helen Clark and her Australian counterpart, John Howard. Singapore Airlines just months ago was ready to pour hundreds of millions into Ansett and its parent, Air New Zealand, provided it had control or 49% of Air New Zealand. That was unacceptable to Clark. She wanted the airline to remain a New Zealand entity. But, ma'am, Singapore Airlines had at no time said it would buy more than 49%! Howard's government, for its own political purposes, wanted the Australian flag-carrier, Qantas, to benefit from Ansett's problems, with utter disregard for the airlines 16,000 Australian employees and for 40,000 workers at suppliers and contractors. It approved the sale of Impulse, a small regional carrier, to Qantas earlier this year, knowing well that it would cripple Ansett because it would increase Qantas's market share and clout. It then backed a plan for Qantas to take over Air New Zealand, knowing that it would complicate SIA's bid.

I wrote in this space some weeks ago that SIA should just walk away from Ansett and Air New Zealand lest it be caught with more red ink. That's what has happened. Though SIA has now been allowed (and it has agreed to) to increase its stake in Air New Zealand to 35% through a fresh $64 million cash injection, it's too late. SIA has already lost $155 million on writing off its part of Air New Zealand's Ansett stake. The Australian government now says SIA is liable for another $55 million that liquidators must pay the employees of the failed airline. And the Singapore carrier has lost some $50 million or so in the diminution in value of its Air New Zealand stake. Even with 35% of Air New Zealand, SIA has no control over the management or operations of the airline, which needs hundreds of millions more in capital just to survive.

There's still time for SIA to abandon Air New Zealand before it too goes belly up. In the wake of last week's terrorist attacks on the U.S., fuel costs have already risen sharply and air travel has plummeted, making a recovery even more difficult.

New Zealand Prime Minister Clark must wake up to the reality that the days are long gone when every country with a seat in U.N. had its own airline. You don't encourage tourism by having a state-controlled airline or a privately owned flag-carrier. You boost tourism by encouraging competition and keeping fares as low as they can possibly go.

As for Australia, it needs to look at its aviation policy once again. It has to allow foreign airlines to start local subsidiaries if it wants to bring its outrageous domestic air fares down to more realistic levels. For starters, it could allow foreign airlines to pick up local passengers and ferry them between Sydney and Melbourne. If it doesn't, Australian domestic fares could soar as high as Qantas wants to take them.

Ansett may no longer fly the skies, but the way it became grounded for good should be a lesson for all Asian governments and flag-carriers about the need for more competition.