Ansett Airlines Shut Down; NZ PM Blockaded In Melbourne; Howard Returns To Parochial Political Realities

The Prime Minister, John Howard, has returned to Australia this morning to be confronted by chaos in the nation’s airports, following the overnight shutdown of Ansett Airlines.

AnsettThe airline was shut down at 2am today, but thousands of passengers have arrived at airports unaware of the closure. Passengers expecting connections with other flights are also stranded. Radio reports say that queues of up to a thousand people have formed at capital city airports.

The Deputy Prime Minister, John Anderson, has made a number of angry appearances on television and radio condemning the decision of Air New Zealand to cut Ansett adrift. Anderson claims he was only told on Sunday of the true extent of the airline’s financial difficulties. He says the Administrator appointed this week to manage the airline asked for around $170 million to keep the airline flying over the next two days.

A statement was issued by Ansett’s Administrator, Peter Hedge, of Price Waterhouse Coopers, earlier this morning:

The administrators were appointed on Wednesday evening and have been examining the airline with a view to determining viable options for the sustained operation of Ansett Australia and its subsidiary companies.

After due consideration of the issues involved, and examination of associated daily operating costs, it is with regret that it has been necessary to suspend immediately all flight operations of Ansett Australia, Ansett International, Hazelton Airlines, Kendell Airlines (Aust) Pty Limited, Skywest Airlines and Aeropelican.

The decision to ground the airline group was made with great difficulty early this morning, following meetings with numerous parties including representatives of all key unions.

It is important to clarify that this action, to cease flight operations, is due to the lack of necessary cash or facilities to fund the operation.

I must however stress that we remain in discussions with a number of interested parties regarding future options for Ansett Airlines and other parts of the group.

I am acutely aware as is the Ansett management team, of the impact this regrettable action will have on the employees, customers, suppliers and many regional centres, cities and towns across Australia.

However after considering the immediate financial position of the company, the level of daily losses being incurred, and in the absence of any immediately viable solution, it was decided there was no other option.

Meanwhile, Ansett baggage handlers have prevented the departure from Melbourne’s Tullamarine airport of an Air New Zealand jet carrying New Zealand Prime Minister, Helen Clark. The jet has been on the ground since just after 6am. Trucks have been parked behind the aircraft to prevent its departure.

Economically, the collapse of Ansett carries with it major job losses in a range of industries, notably tourism and hospitality. Regional airline services will be particularly hard hit because many centres have been serviced only by Ansett.

Politically, the Ansett crisis will fuel rural and regional discontent, and bring further pressure on State and Federal governments to step back from deregulation and competition policies.

Whilst the attention of the world has been focused on the horrific events in the United States this week, the Prime Minister will now be forced to deal with more parochial, domestic issues.

 

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