The on-again, off-again flirtation between Air New Zealand and Ansett Australia has found a new lease of life with a surprise twist.
At presstime, the Auckland-based flag carrier was within 'a few days' of finalising the purchase of up to half of Ansett - from TNT.
Air NZ had tried to buy News Corp's 50 per cent stake in Ansett earlier this year but got bogged down in the course of negotiations. Now co-owner TNT wants to get out by the end of the year because of concerns about the airline's deteriorating financial performance, but no price has yet been fixed.
TNT chairman Fred Millar declared Ansett's performance in 1994/95 'extremely disappointing' after it lost market leadership to rival Qantas and plunged into the red during the second half. In the year to 30 June operating profit fell 53 per cent to A$98.5 million ($74.6 million) despite a 4 per cent increase in revenue.
This year, all the indications are that Ansett is heading for its worst performance since 1991/2, when the carrier reported an operating loss of A$91.2 million.
The proposed deal clearly leaves the door open for a complete takeover of Ansett by Air NZ, assuming the eventual emergence of a single Australasian aviation market. While Ken Cowley, chairman of News Corp and executive chairman of Ansett, says the media group is now 'a long term shareholder', analysts believe News Corp will sell for the right price, as transport is not a core group asset.
Air NZ wants a speedy resolution to avoid a repeat of the protracted delays that dogged its dealings with News earlier this year.
Tom Ballantyne
Source: Airline Business
