Paul Phelan/CAIRNS Andrzej Jeziorski/SINGAPORE
Air New Zealand and Ansett are to become more closely integrated, with the scrapping of geographically separate and self-contained business units in favour of a new structure to be organised along functional lines. The move follows the group's announcement of an operating loss for the six months to 31 December.
ANZ group chief executive Gary Toomey says the new structure should improve performance and profitability by streamlining decision-making, reducing duplication and speeding up customer initiatives. ANZ nevertheless says the situation could deteriorate further in the short-term.
The group failed to break out Ansett's trading performance, but group chief financial officer John Dell says it was "very disappointing", while chairman Sir Selywn Cushing admits ANZ may have paid "too much" to acquire the 50% of the Australian carrier it did not already own.
The group took a NZ$1.1 million ($475,000) pre-tax loss in its first half, blaming Ansett's performance and increased competition, fuel prices and exchange rates. Net profits for its first half fell 97% to NZ$3.8 million from NZ$127.2 million in the same period 1999.
With Singapore Airlines' investment capped at 25%, the group is struggling to raise the capital needed to upgrade the Ansett fleet, and Cushing says it will launch a capital note issue over three to four years to raise the cash.
The sale of ANZ's remaining stake in Equant before the end of its financial year in June should contribute NZ$100 million, while ANZ's Christchurch engineering operation is being sold to Pratt & Whitney.
Grant Lily, former general manager of Air New Zealand International, and Gary Kingshott, his Ansett International counterpart, will meanwhile leave the group. Three new divisions under senior vice-presidents have been created.
Andrew Miller will head group sales and distribution while Lesley Grant is to take over customer service. Trevor Jensen will take charge of all Part 121 flying operations and engineering.
Rival Qantas is to cut 25% of its middle-management positions (220 jobs) over the next few weeks, with another 1,250 jobs to go over six months, in response to its own financial woes. The carrier, which reported net profits of A$264million ($138 million) for its first six months (down 22%, or 11% excluding exceptions), is also cutting services to China and Canada. It will "shortly" close other "poorly performing" routes. Sales rose 13.1% to A$5.1 billion, while pre-tax profits were up A$2 million at A$416 million, excluding exceptions. James Strong will relinquish his post as chief executive on 5 March, to be replaced by his deputy Geoff Dixon.Source: Flight International
