MIAMI – Today in Aviation, Ansett Australia (AN), a major Australian airline group, ceased operations in 2002 after 65 years of service.
Ansett Australia, headquartered in Melbourne, was a major Australian airline group. The airline operated throughout Australia and, beginning in the 1990s, to Asian destinations.
Following a financial crisis in 2001, the airline was put into administration and then consolidated liquidation in 2002, according to a deed of company agreement. The last flight landed on March 5, 2002.
Ansett Airways Pty Ltd was founded in 1935 by Reginald “Reg” Ansett. This was an offshoot of his road transport company, which had become so successful that it was threatening Victorian Railways’ freight and passenger revenue.
According to Australian Aviators An Illustrated History, to stifle Ansett’s success, the state government enacted legislation to quite literally force private road transport companies out of business. Reg Ansett countered by forming an airline, however, as aviation was regulated by the federal government and out of reach of state governments.
On February 17, 1936, Ansett launched its first flight between Hamilton and Melbourne, using a Fokker Universal monoplane. Due to the airline’s rapid growth, Ansett decided to float the airline in 1937, thus giving the public the chance to purchase part of its shares.
Ansett Airways then began importing Lockheed Electra aircraft as the carrier’s route network grew. Except for the Hamilton service, AN chose to cancel all scheduled services during WWII. AN fought to re-establish his domestic routes after the war, using surplus Douglas DC-3s converted from C-47s and the last remaining L-10s.
Australian National Airways (ANA), established in 1936 by a consortium of British-funded Australian shipowners, dominated the domestic airline travel market in Australia at the time. The Chifley federal government was dead set on creating a state-owned airline that would handle both domestic and international flights.
After being thwarted in this endeavor by the High Court of Australia, the Chifley federal government formed Trans-Australia Airlines (TAA) to compete with ANA.
Although the Menzies backed TAA because of the high dividends it paid the government, it did not want TAA to have a monopoly on domestic services if ANA went bankrupt, which seemed likely. The only choice, it turned out, was for AN to purchase the ANA operation. AN’s offer of £3.3m had a variety of financial backers, the most notable of which was Shell Oil Company.
By prohibiting the importation of aircraft without a government license, the Menzies government’s ‘Two Airlines Policy’ barred all other domestic interstate operators. From 1957 to the 1980s, Ansett and TAA operations were a mirror image of each other, flying the same planes at the same times, to the same destinations, at the same fares under the strict federal government policy.
After the government of New Zealand opened its skies to the airline, AN expanded into New Zealand through its subsidiary Ansett New Zealand in 1987. After Australia’s government failed to honor a reciprocity deal, Air New Zealand attempted to buy a stake in Qantas (QF) when it went public in 1995 but was denied. Instead, in 1996, it paid A$475m for TNT’s 50% interest in Ansett Australia.
In February 2000, Air New Zealand bought out News Corporation’s interest in Ansett for A$680m, outbidding Singapore Airlines’ (SQ) offer of A$500m.
Alas, with competition from QF and a slew of low-cost carriers (Impulse Airlines and Virgin Blue), a top-heavy and significantly overpaid workforce, an aging fleet, and, due to maintenance irregularities, the grounding of the Boeing 767 fleet during the Christmas 2000 season and a full grounding in Easter 2001, AN was severely cash-strapped, losing as much as A$1.3m per day.
On September 12, 2001, Air New Zealand entrusted the Ansett group of companies to PriceWaterhouseCoopers for voluntary administration. AN’s fleets, as well as those of its subsidiaries Hazelton Airlines, Kendell, Skywest, and Aeropelican, were grounded on September 14 after the administrator determined that it was not feasible to continue operations (primarily due to an apparent shortage of funds to cover fuel, catering, or employee wages).
Ansett resumed limited services between major cities on October 1, 2001, after obtaining a federal government guarantee, using only the Airbus A320 Skystar fleet. Ansett Mark II was the name of the operation, which was managed and funded by Ansett Australia. The aim of having AN back in the air was to find a buyer for the company and produce some cash flow.
In November 2001, AN creditors approved the acquisition of Ansett’s mainline properties by the Tesna group, headed by Melbourne businessmen Solomon Lew and Lindsay Fox. The proposal called for resurrecting the trademark font and “Star Icon” logo while building a “new” Ansett from the ashes of the old.
However, despite being well-advanced, the deal with AN’s administrators fell apart in late February 2002. The administrators declared on February 27, without notice, that Lew and Fox had withdrawn their offer, citing the “inability to complete the transaction on legal advice.”
With no other options and no reasonable chance of reviving AN as a viable company, the administrators had no choice but to shut down all flights a minute before midnight on March 4, 2002, with the last commercial flight, AN152 from Perth to Sydney, operated by A320-211 VH-HYI, landing at 06:53 local the next day.
As the final flight touched down, AN employees flocked to Golden Wing Lounges around the country to say goodbye to the airline after 65 years of operations.
Featured image: Boeing 747-400 Spaceship at Sydney Airport in September 1999. Photo: By Aero Icarus from Zürich, Switzerland – 70cc – Ansett Australia Boeing 747-412; VH-ANA@SYD;04.09.1999, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=26641743. Article sources: Carroll, Brian (1980). Australian Aviators An Illustrated History. North Ryde: Cassell Australia. ISBN 0 726913 99 5, wsws.org.