Key Australian Aviation Policy Developments: The Ansett Airlines Context 1937–18 July 2003 Chronology

Chronologies ONline

Economics, Commerce and Industrial Relations Group

This Chronology is issued electronically. This is the last update.

All enquiries: John Kain, Director, ECIR Group and Richard Webb, Research Specialist, ECIR Group.

Updated: Rowena Billing, Group Assistant, ECIR Group

18 July 2003

It is reported that 27 former Ansett aircraft, which were expected to raise $200 million towards entitlements, have yet to be sold due to the flood of aircraft on the international market after September 11 and the SARS crisis. KordaMentha had hoped to return 92 cents in the dollar to Ansett workers, but this would only be possible if the 27 aircraft were sold.

A spokesperson for administrators, KordaMetha says that more than $630 million had been raised from asset sales and that the administrators expect a final total of $900 million.

'Ansett Aircraft sale fails to take off', Age, 18 June 2003
17 July 2003 It is reported that court action is still holding up the distribution of entitlements to Ansett employees, almost two years after the airline collapsed. 'Final settlement for former employees of Ansett Airlines held up by court proceedings', 7:30 Report, 17 June 2003
1 July 2003 The Ansett ticket levy ends on 30 June 2003. 'Ansett ticket levy ends', John Anderson, Press Release, A70/2003, 1 July 2003
10 June 2003

The Howard government announces that the $10 Ansett ticket levy will be abolished at the end of the month.

Ansett administrators, Mark Korda and Mark Mentha, publish a notice to Ansett staff. The notice stipulates that all employees are required to prove their debts or claims to establish priority by 30 June 2003.

'Minister abolishes Ansett ticket levy', PM, 10 June 2003

'Advertisement: Notice to Ansett employees', Herald Sun, 10 June 2003

21 May 2003 Shadow transport minister, Martin Ferguson, accuses the Howard Government of intending to continue the Ansett ticket tax in the 2003-04 Budget. 'Budget detail exposes Government plan to keep Ansett tax for the long haul', Martin Ferguson MP, Media Release, 21 May 2003
18 May 2003 10,000 Ansett workers are reportedly still owed over $200 million in entitlements, 14 months after the collapse of the airline. Research also indicates that although 70% of ex-Ansett staff have found work, it is at a lower status or reduced pay. 'Ansett staff owed $200m', Sun-Herald, 18 May 2003
14 May 2003 it is reported that the last of Ansett's freehold properties will be auctioned over the next 12 months, in a scheme to raise a further $7 million. 'Ansett land comes up for grabs', Age, 14 May 2003
13 May 2003 The Ansett Pilots Association are reportedly seeking damages of $700,000 for unpaid wages. Thirty six former Ansett pilots claim that after undergoing flight training for Ansett, they were never paid. 'Ansett pilots sue over lost wages', Australian, 13 May 2003
28 April 2003 It is reported that the Federal Government may consider removing the ticket levy to ease the impact of the SARS scare on the tourism industry. Shadow transport minister, Martin Ferguson, states that the SARS issue is just a convenient cover to axe an unnecessary tax.

'Ansett levy may be reviewed', Age, 28 April 2003

'Scrapping Ansett levy not optional - It's necessary', Martin Ferguson, media release, 28 April 2003

1 April 2003 Federal cabinet decides to leave the Ansett levy in place citing the uncertainty of the outstanding superannuation case as the reason. Shadow transport minister, Martin Ferguson, states that the Government has covered its loan and accuses the Coalition government of amassing a surplus from the tax. 'Ansett levy decision outrageous', Martin Ferguson MP, Media Release, 1 April 2003
25 March 2003

It is reported that due to an appeal regarding the Supreme Court's ruling on staff superannuation funds, more than $360 million in Ansett employees' entitlements will be frozen. If the appeal had not been lodged, administrator Mark Korda says he could have distributed the next round of entitlements within five working days. The Government would have also been able to lift the ticket levy.

'Ansett funds in limbo', Canberra Times, 25 March 2003
7 March 2003 It is reported that in changes to the Ansett ticket levy, airlines will now charge $5 a sector rather than $10 a ticket. This means that a one-way flight will impose a $5 charge rather than $10. The change will bring Qantas' charging system in line with Virgin Blue, which charges $5 a sector as it only sells on-way fares. 'Qantas cuts Ansett tax', Herald Sun, 7 March 2003
4 March 2003

After the sale of a BAE 146 aircraft to Air Albania, Mark Korda states that almost $700 million has been raised through asset sales since Ansett's collapse. Korda says he hopes aircraft sales will raise at least $150 million, giving former employees a return of 88 cents in each dollar owed. Mark Korda states that the administrators still have assets to dispose of.

'Albania takes Ansett plane', Herald Sun, 4 March 2003


26 February 2003 Martin Ferguson, shadow minister for Transport and Gavan O'Connor, shadow minister for Tourism, urge the Government to end the Ansett tax. As at 31st December 2002 the Ansett levy had collected $182.3 million and asset sales had returned a net profit of $290 million. Therefore, O'Connor and Ferguson argue, the Government has raised more than enough to cover the $330 million loan. 'Stop the con on the Ansett ticket tax', Martin Ferguson and Gavan O'Connor, Media Release, 26 February 2003
11 February 2003

it is reported that Air NZ has secretly settled a claim by Orica, a chemicals company, over Ansett's collapse. Orica claimed that Air NZ failed to fulfill a deal to provide discount air travel. The company agreed to settle for less than $1 million. Ansett administrator Mark Metha said he was not aware of the Orica claim.

"Air NZ in secret deal over Ansett", Daily Telegraph, 11 February 2003
30 January 2003 The shadow minister for Transport, Martin Ferguson MP, states that now it is clear the Government will recoup its $330 million loan and the Ansett levy is redundant. He accuses the Government of creating a "political slush fund" and damaging the tourism industry. '$1/2 Billion Slush Fund Growing Under False Pretences: Time to end the rort!', Media Release, Martin Ferguson MP, 30 January 2003
22 January 2003

It is reported that in a letter obtained by the Australian Newspaper, Air NZ has stated that it will not secure its Australian based workers entitlements because they have access to government safety nets. Australian Services Union Assistant National Secretary, Linda White, states that Air NZ has left the responsibility of entitlements with the Australian taxpayer and the Federal Government.

Australian Democrats Workplace Relations spokesperson, Senator Andrew Murray, blames the Coalition government and the Labor Party for not agreeing to the 1998 Harmer Law Reform Commission recommendations, which would make companies in certain circumstances liable for the debts and obligations of their subsidiaries. He states that the Coalition has refused to accept the Democrats' amendments four times already and that it was time the Government passed the amendments in the Senate.

The federal Government says that Air NZ remains bound, legally and morally, to meet entitlements.

'Air NZ staff left to rely on safety net', Australian, 22 January 2003

'Kiwis Should pay', Media Release 03/31, Senator Andrew Murray, 23 January 2003


'NZ can't jettison Aussies', Australian, 24 January 2003

28 December 2002

It is reported that under a plan being considered by the Howard Government, the Ansett levy could be suspended from February. $140 million has been collected by the Ansett levy to date and, with the administrators expecting to recover $300 million, the Government feels it is close to recovering its $400 million loan.

Shadow transport minister Mr Martin Ferguson states that the Ansett levy is no longer necessary and that continuing the Ansett levy over the holiday period would hurt the tourism industry.

'Plan to put $10 Ansett levy on hold', Weekend Australian, 28 December 2002

'Ansett tax now a rip-off: Labor', Canberra Times, 29 December 2002

20 December 2002

Ansett staff come closer to receiving their entitlements after the Supreme Court rules that the Ansett Australia grounded staff superannuation fund does not have a priority over other creditors. The ruling means that the entire Ansett workforce will have first access to the money being held by Ansett's administrators. Joint Ansett administrator Mark Korda says he is 'delighted' at the ruling.

'Win for Ansett workers' Age, 21 December 2002

17 December 2002 The Victorian government releases the results from a survey entitled 'the post-retrenchment labour market experiences of Ansett workers'. The survey found that while almost 80% of former Ansett staff have found new employment, much of this work is not permanent. Almost one in five ex-Ansett staff are still looking for employment.

The post-retrenchment
labour market experiences
of Ansett workers

'Ansett staff hired, but downgraded', Australian Financial Review, 18 December 2002

'Most former Ansett staff find new jobs', Age, 18 December 2002

16 December 2002

John Howard addresses a group of Ansett workers outside his Sydney residence today and says he would discuss what could be done about releasing funds from the airline's administrators.

Ansett administrator Mark Korda states that the $390 million from aircraft sales is still frozen by court action and that entitlements will not be issued until next year, not before Christmas as he originally stated.


'Ansett staff sing for Christmas pay', Australian, 17 December 2002

'Ansett Money stays frozen: administrator', Canberra Times, 17 December 2002

8 December 2002 The Prime Minister Mr John Howard discusses the Ansett entitlements and states that the Government had kept their promise to employees. The Government guaranteed to fund unpaid holiday pay, long service leave, pay in lieu of notice and eight weeks redundancy pay. Mr Howard states that any further outstanding entitlements are the responsibility of the liquidator. 'Prime Minister discusses terrorist threat; Max Moore-Wilton; soccer World Cup; PM's visit; and Ansett employees', Transcript of the Prime Minister The Hon John Howard MP Interview with Rob Duckworth and Greg Henricks Radio C91.3, 8 December 2002
29 November 2002 It is reported that Taiwan's national carrier, China Airlines, interviewed 55 pilots in Sydney last week, as it seeks to employ 200 pilots over the next year. The majority of the pilots interviewed were from Ansett and at least three quarters of those who applied will be offered jobs. 'Ansett vets in Taiwan flight plan', Australian, 29 November 2002
27 November 2002 Ansett's former Melbourne headquarters is sold to property developer PDG Corporation, for more than $30 million. 'Ansett headquarters sold', Herald Sun, 27 November 2002
15 November 2002

The Australian Transport Safety Bureau (ATSB) releases its report, Aviation Safety Investigation into Ansett Australia maintenance safety deficiencies and the control of continuing airworthiness of Class A aircraft.

Martin Ferguson, the shadow minister for Regional and Urban Development, Transport, Infrastructure and Tourism, states that the report confirms that the Civil Aviation Safely Authority was complacent in its handling of the Ansett issue.


'CASA had its eye off the ball on Ansett' Media Release, Martin Ferguson MP, 15 November 2002
30 October 2002

The Labor Party leader, Mr Simon Crean, announces that the Ansett levy can no longer be justified and argues that it should end immediately. The Labor Party say the levy should be scrapped as they feel the government will recoup the $330 million through what has already been collected from the levy, plus the approximate $200 million from the Ansett administrators.

Federal Transport and Regional Services Minister, John Anderson, raises the prospect of ending the levy soon.


'Labor to scrap Ansett Levy', Statement by the leader of the Opposition the Hon Simon Crean, 30 October 2002


'Ansett ticket levy may end at Christmas', Age, 31 October 2002



29 October 2002

In a question on notice in Parliament, Mr John Anderson, Minister for Transport and Regional Services, confirms that not all the money raised by the Ansett ticket tax would go to the former airline workers. $1.3 million of the levy had been paid to the Department of Transport and the Department of Employment and Workplace Relations to meet administration costs, as set out under the Air Passenger Ticket Levy (Collection) Act 2001.

A spokesperson for the Minister for Transport and Regional Services, Mr Anderson, states that the Government's $330 million loan would be recouped through Ansett administrators and the ticket tax. So far the levy has recovered $123 million. Ansett administrators will repay the loan before any of the $430 million in employee entitlements is paid.

Govt admits taking $1.3m for Ansett ticket fund, Canberra Times, 29 October 2002



'Minister discusses sugar levy; and Ansett', The World Today, 30 October 2002

3 October 2002 Federal Tourism minister, Ian MacFarlane, refuses to rule out making the Ansett levy permanent in an interview with the Australian Financial Review. Mr MacFarlane appears to be at odds with John Anderson, the Minister for Transport and Regional Services, who told a tourism summit last week that the levy would be terminated at the 'earliest possible moment'. So far the Government has collected $123 million from the levy. 'Ansett ticket tax may stay', Australian Financial Review, 4 October 2002
26 September 2002 The Minister for Employment and Workplace Relations, Mr Tony Abbott, announced that since Ansett's collapse, the Government's Special Employee Entitlements Scheme for Ansett Workers (SEESA) has advanced $330 million in entitlements and a quarter of employees have been paid 100% of their entitlements. 'Ansett worker entitlements', Hon. Tony Abbott, media release 07102, 26 September 2002.
25 September 2002

At the third meeting of creditors, it is stated that Ansett's terminal at Perth Airport will be sold. However, the creditors and the former employees may not receive any of the proceeds. The administrators said that it would depend on the outcome of legal action and plane sales, which are expected to be difficult in the post-September 11 market where all airlines had surplus planes.

It is reported that the Federal Government will take $185 million out of the expected employee payout of $220 million as repayment of a loan which guaranteed employee entitlements of up to eight weeks redundancy. The payout to the government, however, depends on the success of a $200 million legal action against an employees' superannuation fund. The ACTU and the Australian Services Union have accused the government of 'double dipping' by demanding repayment of the $330 million loan while keeping $110 million raised by the Ansett levy.

'Hope slim for staff of Ansett', West Australian, 26 September 2002


'Canberra paid before Ansett staff', Australian, 26 September 2002

24 September 2002

Robert McClelland, the shadow minister for Workplace Relations, accuseds the Howard government of letting the Ansett executives 'off the hook' with its legislation to 'claw-back corporate bonuses' and cited a lack of support for the former Ansett workers. He states that the Howard government expects tax payers and the travelling public to pay for the Ansett collapse, but are allowing the executives to escape legal action and keep their $3.3 million in bonuses.

Qantas and three regional carriers move into the former Ansett terminal in Sydney today. It is reported that Virgin Blue has taken legal action to uphold a $18 million a year deal relating to the access to nine gates at the Sydney terminal, pier A.

'Government lets Ansett executives off the hook again', Robert McClelland MP, statement, 24 September 2002


'Qantas leads way to Ansett gates', Australian Financial Review, 25 September 2002

16 September 2002

The shadow minister for Workplace Relations, Robert McClelland, accuses the Howard government of ignoring 'corporate mismanagement' by not commenting on the reported $25 million in payments to executive staff. '

The Prime Minister is asked in Parliament about the fairness of executives awarding themselves such large sums of money while loyal Ansett workers are still waiting for their entitlements. While Mr Howard admitts that such payouts were "a bit rich" he states "I make no observation on the particular conduct".

In a report to creditors, it is stated that Ansett workers could receive a further 20 cents in the dollar by the middle of next year if the legal action brought against the administrators by superannuation funds is resolved. If the trustees of three of Ansett's superannuation funds are successful in their claim for up to $200 million, there would be no further returns to employees for at least two years.


'John Howard on Ansett executive payouts', Robert McClelland MP, statement, 16 September 2002


'Legal cloud over Ansett workers' payout claim', Australian, 17 September 2002

13 September 2002 Former Ansett staff are being encouraged to attend a creditors meeting to push the payout of entitlements. The administrators have so far recovered $550 million from the sale of assets and terminals, including $31 million for the Ansett former head office in Melbourne. The level of the final payout depends on the sale of aircraft and spare engines, worth $350 million. 'Workers urged to push for Ansett entitlements', Australian, 13 September 2002
12 September 2002 The shadow minister for Workplace Relations, Robert McClelland, expresses his displeasure at the Howard Government's 'silence and inaction' since Ansett collapsed. 'Government goes to ground on Ansett', Robert McClelland MP, statement, 12 September 2002
6 September 2002

John Anderson, Minister for Transport and Regional Services, denies the ACTU's claim that the government is 'double dipping' on the Ansett issue. Mr Anderson states that the Air Passenger Ticket levy was solely introduced to cover the costs of guaranteeing former Ansett workers' entitlements, and that the levy will be dropped when these costs have been met.

Former Air New Zealand chief executive Gary Toomey says that he believes Ansett could have been saved if a plan to buy Virgin Blue had succeeded. Mr Toomey had set up the deal with Richard Branson in April 2001 but, due to a 4 month delay after a disagreement with Air NZ shareholder Singapore Airlines, the deal collapsed.

'ACTU lies on Ansett Entitlements', Hon John Anderson, media release A115/2002, 6 September 2002




'Virgin deal 'could have saved Ansett', Weekend Australian, 7 September 2002

5 September 2002

ACTU reports that Ansett employees are still owed more than $400 million in entitlements. With approximately one fifth of the Ansett workforce still unemployed, union officials state that this has caused hardship to thousands of people. ACTU president Sharan Burrow blames the government's Ansett levy and their determination to recover their entitlements payments ahead of the Ansett worker.

Delays have also been attributed to a Victorian Supreme Court case against Ansett's administrators involving a priority superannuation claim of $200 million. Mark Korda has stated that until the case is settled he is unable to payout funds.

'Sacked Ansett Staff owed $400m', Australian, 6 September 2002
4 September 2002

It emerges that former Ansett boss, Gary Toomey, received a $NZ4.2 million dollar payout ($A3.59 million) after the airline's collapse. 60 senior executives received $NZ28.8 million in payouts.

Singapore Airlines plays down reports that they are contemplating starting a domestic airline in Australia.

'Ansett Chief $3.5m payout', Age, 05 September 2002
23 August 2002

Qantas announced that it will takeover six of the eighteen gates at the former Ansett terminal for a $13 million dollar a year deal.

Virgin Blue declines to continue negotiations with the SACL and instead asks the SACL to allow a $15 million expansion to its own domestic terminal .

'Qantas: boarding now in Ansett terminal', Australian Financial Review, 24 August 2002
14 August 2002 Virgin Blue officials annouce that they are prepared to spend up to $15 million on upgrading the airline's existing facilities, rather than agree to terms set by the Sydney Airports Corporation Ltd for the sale of the Ansett terminal. Airline officials feel that the SACL reneged on a deal which would have allowed Virgin Blue take over nine gates for an $18 million a year licensing arrangement. 'Virgin steers clear of Ansett terminal, Australian', 15 August 2002
5 August 2002 Melbourne University researchers, funded by the Victorian Department of Treasury and Finance, begin a study to track the fate of Ansett's former staff. The study will assess the impact on both the Ansett staff, and the job market. A survey will be mailed to 500 ex-Ansett staff from four different areas. 'Fate of ex-Ansett staff under microscope', Age, 4 August 2002
1 August 2002

Transfer of full ownership of Kendell Airlines to the Australiawide Consortium has been completed, securing employment for 550 Ansett workers.

'Sold -Kendell Airlines', Ansett media, 1 August 2002
31 July 2002 Deputy Prime Minister, John Anderson, expresses his disappointment at ASIC's decision to cease their inquiries into Air NZ's role in the Ansett collapse. 'Disappointment at
Ansett probe halt', Herald Sun, 1 August 2002
12 July 2002 The Australian Securities and Investments Commission cease investigations into the Ansett collapse. The corporate regulator stated that an attempt to prosecute Air NZ's directors would be expensive, complex and risky. 'ASIC closes file on Ansett', Age, 12 July 2002
6 July 2002 Unions predict that more than 300 Ansett staff members will lose their jobs next week due to a lack of acceptance of the voluntary redundancy packages. '300 Ansett jobs likely to go next week', Age, 6 July 2002
28 June 2002 Contracts signed for the sale of Kendell and Hazelton Airlines to Australiawide Airlines consortium.

'Canberra promised better air service', Canberra Times, 29 June 2002

'Kendell sale contact Signed', Ansett Media, 28 June 2002

19 June 2002 Ansett's administrators auction the last of Adelaide Domestic Airport's furniture, engineering and IT equipment. 'Rich pickings at Ansett sale', Australian Financial Review, 21 June 2002
18 June 2002 Virgin buys Ansett's Melbourne jet base, at Tullamarine airport, for a reported $7 million. Includes two hangars, buildings and parking spaces. The sale is to be finalized on 31 August 2002.
Virgin buys former Ansett Tullamarine base, Travelbiz, 18 June 2002
12 June 2002

Ansett administrator Mark Mentha states that talks are progressing regarding the sale of Ansett's Air Operators Certificate (AOC). Interested parties include Virgin Blue and a number of overseas airlines.

The AOC included a range of Ansett’s infrastructure, including aircraft maintenance facilities and manuals.

'Virgin in queue to
buy Ansett rights', Age, 13 June 2002
6 June 2002 Brisbane Airport Corporation (BAC) announce it had reached agreement with the Ansett administrators to terminate the lease at the BAC-owned terminal and acquire the Ansett assets within it. BAC will take control of the 23,000 square-meter Brisbane Airport domestic passenger terminal formerly managed by Ansett Airlines. The terminal was sold for an undisclosed sum.


BAC to operate former Ansett terminal, media Release, Brisbane Airport Corporation, June 2002
21 May 2002

The remnants of Ansett's national headquarters in Swanston Street are to be auctioned over the next two days, including office equipment, furniture and memorabilia, as part of the airline administrators' realization of company assets.

The money from the auction is to go into a central administration fund and eventually towards employee entitlements and creditor debt.

'Discarded desks, derelict chairs, dashed hopes', Age, 22 May 2002
7 May 2002

Kendell and Hazelton are to be sold to Australiawide Airlines syndicate, subject to conditions, and the sale will be finalised in 14 days. The combined airline will be renamed.

The CEO of Australiawide, Michael Jones promises to keep between 600 and 650 jobs for the new airline, which previously employed 950.

Ansett’s assets in Western Australia auctioned by the failed carrier’s administrators.

'Regional Airlines go to Australiawide', Australian Financial Review, 7 May 2002

'350 jobs to go in
bush airlines deal', Daily Telegraph, 8 May 2002

'Ansett WA assets under hammer', Travelbiz, 7 May 2002

3 May 2002 Ansett sells lease on the Sydney Airport terminal to Sydney Airports Corp for $200 million. 'Ansett Sydney terminal sold', Age, 3 May 2002
29 April 2002 Court orders Ansett administrators to sell the Sydney domestic terminal by Friday, 3 May 2002. 'Court orders Ansett to sell terminal lease', The Australian, 30 April 2002
26 April 2002 Administrators announce the sale of Ansett group subsidiary airline Aeropelican Air Services Pty Ltd to the aviation company, IAP Group Australia, for AUD$6 million. IAP Group Australia, operators of Horizon airlines, vow to rebuild the airline to its former status. 'Ansett's Aeropelican sold to IAP for $6m', Sydney Morning Herald , 8 May 2002
24 April 2002 Ansett administrators announce the sale of the Ansett International Cargo Handling business to Patrick Corporation Limited for an undisclosed sum. The transaction is expected to be concluded by 30 May 2002. The employees of Ansett International Cargo Handling will be offered jobs within the Patrick Group as part of the sale. 'Patrick Corp snaps up Ansett's cargo division', Sydney Morning Herald , 26 April 2002
21 April 2002 Ansett's Canberra terminal is sold for less than $1 million to Canberra International Airport. The terminal will be converted into a common-user facility for Virgin Blue, Kendell and other airlines. 'Ansett terminal sold, but regional hurdles loom, Australian Financial Review, 27 April 2002

8 April 2002

Ansett administrators announce that they are committed to finding a buyer for Kendell Airlines. Interested parties include Inland Marketing Corporation, Australiawide Airlines and Virgin Blue. The Federal Government is in discussions with the administrators regarding potential support for a sale.


'Lifeline talk for Kendell, Hazelton', Australian Financial Review, 20 March 2002

'Regional councils make bid for Hazelton and Kendell', Canberra Times, 3 April 2002

27 March 2002 The Federal government supports a Deed of Company Arrangement after the administrators, Mark Mentha and Mark Korda, agreed to key concessions relating to superannuation entitlements and creditor protection. 'Ansett Australia Creditors meeting', Hon. John Anderson, media release A40/2002, 27 March 2002.
13 March 2002 Ansett's administrators, in conjunction with the global search company; Ansett staff and Australian unions, launch an employment web site for Ansett workers which, in addition to seeking employment for former workers, urges corporate Australia to hire former Ansett staff. 'Lew, Fox have 'moral obligation' to Ansett Staff', Age, 14 March 2002
5 March 2002 The last commercial Ansett flight, from Perth, landed at Sydney airport at 6:42 am. 'Last Ansett commercial flight lands in Sydney', AAP, 5 March 2002.
27 February 2002 Messrs Fox and Lew blame the collapse of the sale of Ansett to Tesna on their inability to reach agreement with third parties on issues principally related to the transfer of domestic airport terminal leases. Contract requirements for the transfer of leases at Sydney, Brisbane, Melbourne, Adelaide and Perth to Tesna could not be finalised in time. Serious issues remained unresolved including those relating to environmental risk and the use of Ansett's IATA designator code. Tesna says that the collapse of the talks with Virgin Blue were not to blame. Messrs Fox and Lew also deny that Tesna did not have the finance to complete the deal and say that key US investors supported them until the end.

In a flurry of recriminations, the Prime Minister, Hon. John Howard, says that he is disappointed with the decision and feels sorry for Ansett staff but says that the Government is not to blame. The Federal Transport Minister, Hon. John Anderson, demands a full explanation from Tesna. ACTU secretary, Mr Greg Combet, says that the decision is a tragedy. Administrator Mr Mark Korda, defends the decision to back the Tesna bid, saying that Tesna was the only option at the time to keep Ansett in business and was in the best interest of creditors. The administrators say that they offered Tesna more time to finalise the sale before Tesna withdrew. Airport operators deny that they are to blame for the collapse of the sale and say that they were prepared to work with Tesna.

The administrators say that they will resume talks with other potential buyers including Virgin Blue, Patrick Corporation and Singapore Airlines.

Patrick Corporation says that the offer it put to the administrators remains current.

'Fox and Lew ditch Ansett', Australian Financial Review, 28 February 2002, pp. 1 and 10.

'Ansett sale to Tesna off - official', AAP, 27 February 2002.

'Tesna says Virgin talks not to blame for Ansett deal collapse', AAP, 27 February 2002.

'Aust PM Howard calls for explanations over Tesna bid withdrawal', AAP, 27 February 2002.

'Ansett administrators say to look at other bidders', AAP, 27 February 2002.

'Administrators perplexed by end of Tesna deal', AAP, 27 February 2002.

'Fox and Lew regret failure of Tesna's Ansett bid', AAP, 27 February 2002.

"Fox and Lew blame airports for Ansett deal collapse', AAP, 27 February 2002.

'Sydney Airport rejects Tesna criticism of delays', Sydney Airport media release, 28 February 2002.

"Patrick Corp says last year's offer for Ansett remains current', AAP, 27 February 2002.

26 February 2002 Tesna reportedly still has to finalise funding arrangements after potential lenders decline to back Tesna's business plan. The report says that two major retail banks and an investment bank rejected Tesna's request for funding. But sources close to Tesna say that approaches to potential lenders were to make refinements to financing and that funding for the acquisition of Ansett are in place.

Sydney Airports Corporation Limited says that it has formally agreed to transfer the lease at the Sydney Ansett terminal to Tesna.

Tesna says that it has undertaken to provide documents that the Civil Aviation Safety Authority needs.

At 6 pm, Messrs Fox and Lew tell the administrators that they have withdrawn their offer to buy Ansett.

'Airport lease in place but Tesna still faces hurdles', Australian Financial Review, 27 February 2002, p. 3.

'Fox and Lew ditch Ansett', Australian Financial Review, 28 February 2002, pp. 1 and 10.

25 February 2002 The administrators say that they are struggling to finalise agreements before the deadline for the sale of Ansett.

Sydney Airports Corporation Limited says that it is ready to sign the documentation transfering the lease to Tesna but would wait until Tesna is ready to settle the acquisition with the administrators.

Tesna is reportedly still in dispute with the operators of other airports because Tesna is refusing to assume responsibility for environmental, safety and other liabilities associated with Ansett's terminal leases.

'Ansett struggles to meet deadline', Australian Financial Review, 26 February 2002, p. 7.
24 February 2002 Tesna's plans to buy Ansett look increasingly at risk. Spokesmen for Sydney Airports Corporation Limited and the Civil Aviation Safety Authority say that they have yet to seal crucial agreements with Tesna before the administrator's deadline (Thursday 28 February 2002) for the sale of Ansett. Tesna reportedly also faces many legal hurdles before it can finalise leases on 16 A320 jets. 'Virgin's plans put Ansett on brink', Australian Financial Review, 25 February 2002, pp.1 and 4.
22 February 2002 Talks between Tesna and Virgin Blue fail, increasing doubts about the sale of Ansett to Tesna.

A newspaper reports speculation that Tesna's financing might be in jeopardy. But sources close to Tesna say that while "refinements" were being made, its financing is not in jeopardy.

'Virgin's plans put Ansett on brink', Australian Financial Review, 25 February 2002, pp.1 and 4.

'Tesna, Virgin talks are in the balance', Australian Financial Review, 23-4 February 2002, p. 7.

21 February 2002 The administrators say that the delay in concluding the sale of Ansett to Tesna is due to third parties. 'Dogfight looms as Qantas hit', Australian Financial Review, 22 February 2002, pp. 1 and 56.
20 February 2002 The Global Rewards Action Group, which represents some holders of Ansett frequent flyer points, says that members could sue the administrators if the point holders fail to receive adequate compensation from the sale of Ansett assets. Spokesman for the group, Mr John Caneva, says that the value of the points is 10 times the $140 million that the administrators placed on them. 'Angry Ansett flyers may seek pay-back from administrtors', AAP, 20 February 2002.
19 February 2002 Tesna releases its proposed frequent flyer progam. The program does not redeem frequent flyer points but recognises former Global Rewards sapphire, platinum and diamond members by awarding bonus points and complimentary membership of the new program. 'Tesna seeks to win back corporate frequent flyers',Australian Financial Review, 20 February 2002, p. 9.
17 February 2002 In an attempt to regain some the business market, Tesna announces a plan to restore and extend all Ansett Golden Wing memberships by six months at no charge. 'Tesna bid to win back corporate market', Australian Financial Review, 18 February 2002, p. 3.
15 February 2002 Tesna reaches in-principle agreement with Sydney Airports Corporation Limited regarding Tesna's takeover of the lease on the terminal at Kingsford Smith airport. An SACL spokesman says that Tesna has undertaken to enter "good faith negotiations with third parties on commercial terms" to rent unused space to other operators. Tesna has yet to reach agreement over the leases at the other major airports. 'Terminal deal clears the way in Sydney', Australian Financial Review, 1-17 February 2002, p. 4.

'Agreement in-principle reached on Ansett Sydney terminal lease', SACL news release, 15 February 2002.

14 February 2002 Unions express concern over the delay in selling Ansett. The unions are concerned that with Ansett unprofitable, a failure of the sale would erode funds to meet employee entitlements.

The administrator of Hazelton Airlines, Mr Humphris, announces that Hazelton will cease flights from Sydney to Canberra, Albury and Wagga Wagga. Mr Humphris attributes the decision to Qantas's increasing capacity, making the routes unviable. But Qantas says that it increased capacity in response to urging by Federal and State governments, the tourism industry, and business.

'Union ultimatum on Ansett', Australian Financial Review, 15 February 2002, p. 3.

'Qantas squeezes out regional operators', AAP, 14 February 2002.

13 February 2002 Tesna gives to Sydney Airports Corporation Limited (SACL) some of the information SACL requested relating to the charge over Ansett's lease on the terminal at Kingsford Smith airport. 'Tesna meets call for facts', Australian Financial Review, 14 February 2002, p. 7.
12 February 2002 The Federal Government refuses to support the sale of Ansett while Tesna does not reveal to Sydney Airports Corporation Limited the terms of the agreement whereby Tesna pledged the Kingsford Smith airport teminal as security for Tesna employee entitlements.

The Federal Court refuses to approve the administrator's decision to continue to operate Ansett pending finalisation of the sale of Ansett to Tesna. The administrators say they will continue to operate Ansett despite the Court's decision.

'Ansett deal hit by double whammy', Australian Financial Review, 13 February 2002, pp.1 and 8.
11 February 2002 Canberra Airport files proceedings in the Federal Court to regain control of Ansett's terminal and convert it to a 'common use' terminal after lease negotiations break down. The Managing Director of Canberra Airport, Mr Stephen Byron, says that Ansett is in default of its lease terms and owes rent.

Tesna and Sir Richard Branson release a statement that Tesna is committed to buying Ansett regardless of the outcome of the discussions between Tesna and Mr Branson.

'Canberra Airport sues Ansett', Australian Financial Review, 12 February 2002, p. 3.
10 February 2002 It is revealed that the principals of Tesna, Messrs Fox and Lew, are meeting the principal of Virgin Blue, Sir Richard Branson, raising speculation as to the nature of their discussions.

Administrator, Mr Mark Korda, says that the 28 February 2002 deadline for completion of the sale of Ansett to Tesna would not be extended

Messrs Fox and Lew sign a $3 billion memorandum of understanding with Airbus Industrie to bring forward the delivery of 30 new A320 and A321 jets from the second half of 2002.

The Prime Minister, Hon. John Howard, expresses concern about whether the sale of Ansett will proceed but says that the Government would not intervene to save Ansett.

'Ansett buyer in crisis talks with Virgin', Australian Financial Review, 11 February 2002, pp. 1 and 14.
8 February 2002 A spokesman for Sydney Airports Corporation Limited (SACL) says that the parties are close to resolving their dispute over the terminals at Kingsford Smith airport after the administrators release to SACL the information that SACL requested. 'Ansett staff cut worries unions', Australian Financial Review, 9-10 February 2002, pp. 4.
7 February 2002 It is revealed that Tesna is yet to finalise leasing arrangements for a new fleet of aircraft.

A group, representing the largest unsecured creditors, claims it was 'snowballed' into approving the sale of Ansett to Tesna by the union movement, and expressed anger at the lack of information that the administrators provided.

The Treasurer, Hon. Peter Costello, defends the role of Sydney Airports Corporation Limited in its dispute with the administrators, and urges the two parties to resolve the dispute.

Justice Goldberg of the Federal Court says that the administrator's application does not raise any legal issues.

'Ansett woes snowball', Australian Financial Review, 8 February 2002, pp. 1 and 13.
6 February 2002 The Australian Securities and Investments Commission opposes the attempt by the administrators to obtain Federal Court approval of their decision to keep operating Ansett pending sale to Tesna. The administrators are seeking protection against possible creditor action against their decision. Ansett reportedly is losing about $6 million daily.

Tesna announces that it would initially employ 1,000 fewer staff than originally estimated, shifting back to the administrators responsibility for paying employee entitlements. But the administators say that this would not affect the payout to unsecured creditors because they (the administrators) have made a provision of $61 million in case Tesna should need fewer staff.

'Ansett stalls as 1,000 jobs to go', Australian Financial Review, 7 February 2002, pp. 1 and 8.
1 February 2002 Lawyers acting for the administrators tell the Federal Court that the contract for the sale of Ansett to Tesna expires on 1 February and that a new extension agreement should be finalised soon. The lawyers are seeking the Court's approval to continue to operate Ansett until its sale is finalised. Ansett reportedly is losing around $6 million daily. 'Relaunch timetable takes shape', Australian Financial Review, 2-3 February 2002, p. 4.
30 January 2002 Lawyers acting for the administrators threaten court action against any party that seeks to take advantage of the delay in the sale of Ansett to Tesna resulting from the dispute between Tesna and Sydney Airports Corporation Limited. The lawyers are seeking to allow the administrators to continue trading even though Ansett's operations are unprofitable.

Administrator, Mr Mark Mentha, says that the 30 day delay to finalising the sale of Ansett to Tesna was not definite and the sale could be deferred again. ACTU secretary, Mr Greg Combet, says that the 30 day delay is an absolute limit as it would erode Ansett employee entitlements.

ACTU secretary, Mr Greg Combet, says that the ACTU has negotiated an unprecedented deal to protect Tesna employee entitlements by securing the entitlements over Tesna assets.

Sydney Airports Corporation Limited (SACL) says that, despite long-standing requests to the administrator and Tesna, SACL has not been provided with all of the vital information required to deal appropriately with the assignment of the Ansett Sydney domestic terminal lease.

'Legal threats fly as Ansett's airport row escalates', Australian Financial Review, 31 January 2002, pp.1 and 8.

'Ansett delays could be extended', AAP, 30 January 2002.

'Ansett workers' entitlements plan unprecedent', AAP, 30 January 2002.

'Sydney Airport still awaits vital information to finalise Ansett terminal lease deal', SACL news release, 30 January 2002.

29 January 2002 The meeting of creditors approves the sale of Ansett to Tesna on a show of hands.

At the meeting, administrator, Mr Mark Korda, announces that the settlement of the sale of Ansett to Tesna would not be completed in time for the intended start up date of 1 February 2002 because of a dispute with Sydney Airports Corporation Limited (SACL) over the Ansett terminal. SACL reportedly wants to see Tesna's business plan, and to be able to allow other airlines to use the terminal. In particular, SACL wants to see details of Tesna's use of the terminal as security for employee entitlements. The delay in the sale may be 30 days.

The administrators say that Tesna has signed an agreement to join the global airline loyalty program, Star Alliance.

The Global Rewards Action Group, which represents some holders of frequent flyer points, says that it will delay Federal Court action against the administrators until Tesna releases details of its reward program. The group maintains that the administrators have undervalued the points to the detriment of points holders.

'Airport row delays Ansett', Australian Financial Review, 30 January 2002, pp.1 and 4.

"Ansett frequent flyers delay court action", Canberra Times, 31 January 2002.

28 January 2002 A newspaper report claims that the ACTU has given in-principle support for a restructured Ansett, paving the way for creditors to ratify its sale.

The Prime Minister, Hon. John Howard, says that the $10 levy would stay in place and would be removed only when the Government is satisfied that its exposure of $625 million is fully covered. Any over-collected revenue would go to the tourism industry.

'Ansett wins key creditor backing', Australian Financial Review, 29 January 2002, pp.1 and 4.

'Airline levy won't profit Aust govt: PM", AAP, 28 January 2002..

25 January 2002 Sydney Airports Corporation Limited (SACL) says that it is "working constructively with Tesna to get Ansett into the air again". SACL says that it "is still unable to deal with the assignment of the lease to Tesna, as, in spite of numerous long standing requests to the administrator, SACL has not been provided with adequate information to allow it to make a proper commercial and legal assessment of its position". Sydney Airports Corporation Limited, 'Ansett Domestic Terminal Lease Assignment', news release, 25 January 2002.
24 January 2002 A newspaper report claims that two overseas airlines are among six that have done due diligence investigations of Ansett's engineering and maintenance business. The report also claims that the Victorian Government is offering incentives to bidders to retain the business because it is a major employer.

Virgin Blue reaches agreement with Sydney, Melbourne and Brisbane airports to expand its own terminals rather thatn rent space from Ansett.

The new owners of Skywest Airlines raise $4 million in new equity to buy the company from Ansett's administrators.

'Six airlines look at Ansett asset', Australian Financial Review, 24 January 2002, p. 6.

'Virgin gives Ansett reasons to feel blue', Australian Financial Review, 25-28 January 2002, p. 3.

'Skywest set for take-off as owners raise $4m more', Australian Financial Review, 25-28 January 2002, p. 19.

21 January 2002 Tesna rehires some former Ansett executives.

Diners Club offers to act as proxy for holders of frequent flyer points at the creditors' meeting on 29 January 2002, and calls on the administrators to review their valuation of the points.

'Ansett execs rehired', Australian Financial Review, 22 January 2002, p. 7.
17 January 2002 A newspaper report claims that Qantas plans to expand its domestic terminal at Sydney airport, which has been over-stretched since Ansett's collapse.

The administrators release the first creditors' report. The report says that the amount unsecured creditors are likely to receive is only $91 million or only around five cents in the dollar, less than previously estimated. Creditors are owed more than $3.4 billion. The report places a value of $140 million on frequent flyer points.

'Qantas plans a blow to Tesna Ansett', Australian Financial Review, 17 January 2002, p. 5.

'Creditors face $1.8bn Ansett black hole', Australian Financial Review, 18 January 2002, pp. 1 and 7.

14 January 2002 The Australian Council of Trade Unions reaches agreement with Tesna on a employee share-ownership scheme, which provides for all employees to have an equal share of five per cent of the airline's equity. 'Staff to share in New Ansett Profits', ACTU media release, 15 January 2002.
11 January 2002 Unions warn Tesna that the enterprise agreement they negotiated would not go ahead unless $240 million of employee entitlements are secured. 'Late hitch for Ansett from unions', Australian Financial Review, 12-13 January 2002, p.4.
9 January 2002 The International Air Services Commission announces a review of the capacity allocated to Ansett from the pool of seats reserved for international airlines under air services agreements with other countries. 'Qantas can grab Ansett's international allocation', Australian Financial Review, 10 January 2002, p. 2.
7 January 2002 Administrator, Mr Mark Korda, says that the value of the vote of holders of frequent flyer points and members of Ansett's Golden Wing Club is yet to be determined. '$2m to tell Ansett creditors of meeting', Australian Financial Review, 8 January 2002, p. 5.
2 January 2002 Administrator, Mr Mark Korda, says that holders of frequent flyer points will be able to vote as creditors at the meeting of creditors on 29 January 2002. 'Revived Ansett may honour flyer points', Australian Financial Review, 3 January 2002, p. 5.
1 January 2002 The Tesna consortium announces key senior Ansett appointments - Mr James Hogan as Chief Executive Officer and Mr Adam Moroney as Chief Financial Officer. Ansett web site
20 December 2001 The Federal Court rules that frequent fliers and Golden Wing Club members are creditors and so can vote at the meeting of creditors on 29 January 2002.

Administrator, Mr Mark Mentha, says that Tesna could propose a loyalty program that could include redemption of points frozen when Ansett collapsed.

The Australian Industrial Relations Commission certifies a three-year enterprise agreement between Tesna and five key unions. The agreement continues rates of pay but includes productivity improvements, through changes in staffing levels and more flexible working arrangements, a five per cent share of profits and equity for employees, and $4.2 million for wage increases.

Federal Transport Minister, Hon. John Anderson, announces that the Federal Government will not extend the temporary cabotage dispensations that were issued to foreign international airlines following the grounding of Ansett. The dispensations enabled sixteen foreign international airlines to carry domestic passengers. The dispensations were issued on the basis that they expired on 31 December 2001. Mr Anderson says that "Qantas and Virgin Blue have significantly expanded the number of aircraft they are operating, and Tesna is expected to start flying at the end of January, subject to the necessary safety approvals. We do not believe it is necessary to extend the dispensations".

ABC news online.

'Frequent flyers to vote on Ansett fate', Age, 21 December 2001, p. 4.

'Ansett signs deal with unions', AAP, 20 December 2001.

'Foreign international airlines and domestic services', Hon. John Anderson, media release A266/2001, 20 December 2001.

19 December 2001 Redundant Ansett employees receive their first entitlement payments. 'Ansett workers receive first entitlement payments', AAP, 19 December 2001.
18 December 2001 Administrator, Mr Mark Mentha, says that Air Partners' injection of more than 35 per cent equity into Tesna should ensure that the risk is small that the Tesna bid for Ansett will fall through.

The administrator of Hazelton Airlines, Mr Michael Humphris of Sims Lockwood, tells creditors that he is considering legal action aginst the former administrator, PricewaterhouseCoopers and directors of the company. Mr Humphris says that investigations indicate that the company was solvent when it was placed under administration. This had damaged the airline causing losses. Mr Humphris tells journalists "There is an argument that the company was solvent. Therfore, if it was solvent, why was it closed down?" The creditors accept Mr Humphris' recommendation to keep the company afloat to recover more than $70 million in debts.

'Fox, Lew deal is airtight:administrator', Australian Financial Review, 19 December 2001, p. 5.

'Hazelton was solvent when it was closed- administrator', AAP, 18 December 2001.

17 December 2001 A consortium, Air Partners III, signs a 'heads of agreement' with Tesna Holdings Pty Ltd whereby Air Partners undertake to inject equity into Tesna of between 35 and 49 per cent. Air Partners is a consortium led by Mr David Bonderman, chairman of Ryanair and director of Continental Airlines, and Mr Bill Franke, who was chairman of America West Airlines. Tesna says that Air Partners would contribute human resources, intellectual and financial capital, and an international network of industry relations. Mr Franke will work with Messrs Fox and Lew to appoint a management team. Tesna is also reported to be negotiating commercial arrangements with Singapore Airlines and other Star Alliance carriers. 'Ansett bidders take US partners', AAP, 17 December 2001.

'Fox, Lew find new Ansett backer', Australian Financial Review, 18 December 2001, pp. 1 and 6.

14 December 2001 The Lang-Virgin syndicate posts a statement with the Australian Stock Exchange saying that the administrators had asked the syndicate to resubmit their offer for Ansett. Lang and Virgin say they had contacted the administrators asking that their offer be put forward at the full creditors' meeting to allow a comparison with the Lew-Fox bid. The statement says that the offer is in the same terms as that made previously and includes the purchase of Ansett terminals, maintenance division and spare parts. The offer includes an undertaking to employ up to 2,000 former Ansett employees and to assume their accrued entitlements. The statement also says that if Lang-Virgin were given access to further financial information, they will be able to consider whether an offer could be made for additional Ansett assets, which would increase the returns to creditors.

Administrator, Mr Mark Mentha, says that the administrators have received an expression of interest from Virgin Blue but that the Tesna proposal is superior.

The Federal Court approves the terms of the Federal government loan of $195 million to be used to fund redundancy payments to former Ansett employees.

Administrator, Mr Mark Mentha, says that the issue of frequent flyer points could be clarified in the new year.

'Ansett bidders seek key numbers', Australian Financial Review, 14 December 2001, p. 5.

'Lang-Virgin secure support for rival bid', Australian Financial Review, 15-15 December 2001, p. 3.

13 December 2001 Administrator, Mr Mark Korda, says that he is seeking legal advice on whether Lang-Virgin should be granted access to the data room. Tesna has told the administrators that it does not want Lang-Virgin to have access to Ansett data.

Qantas announces that it would resume services to New York via Los Angeles as part of the airline's ongoing review of international capacity requirements. Chief Executive Officer, Mr Geoff Dixon, says the adjustments reflect the fact that travel on some international routes is showing signs of improvement. Qantas will also add three additional flights weekly operating from Sydney.

The Civil Aviation Safety Authority indicates that it will look closely at Tesna's plan to commit to a two-year contract with existing Ansett maintenance facilities, given Ansett's previous maintenance problems.

'Ansett bidders seek key numbers', Australian Financial Review, 14 December 2001, p. 5.

Qantas returns to New York following schedule adjustments', Qantas press release, 13 December 2001.

'Ansett systems face scrutiny', Australian, 14 December 2001.

12 December 2001 Tickets for Tesna flights go on sale. 'Fox-Lew's Ansett bid details to be revealed soon', AAP, 12 December 2001
11 December 2001 Qantas announces the launch of Australian Airlines (AA). AA is scheduled to begin operations in the third quarter of 2002 between Cairns and six Asian cities. While wholly-owned by Qantas Airways Limited, AA will have separate management and operate independently of Qantas. Chief Executive of AA, Mr Denis Adams, says that AA would be a single class, full service leisure carrier. Mr Adams says that the Qantas Board's approval of the airline's commencement is conditional on it achieving a cost structure satisfactory to the Chief Executive Officer of Qantas, Geoff Dixon.

AA would locate its first operational base in Cairns; commence operations with four Boeing 767-300 aircraft, building to a fleet of 12 767-300s; offer connecting flights between Cairns and the Gold Coast six times a week; be headquartered in Sydney and establish a second base to Cairns in a southern capital city; establish a national presence as quickly as possible and eventually fly to every Australian mainland capital including Perth and Darwin.

Mr Adams says that the airline would provide international growth for the Qantas Group. AA would not fly on any routes against Qantas. Mr Adams says Qantas would provide, through its Cairns hub, connecting services for AA to all mainland Australian capital cities and key tourist destinations such as Uluru. AA would join the Qantas Frequent Flyer program and would seek membership of the one world™ alliance through Qantas.

Qantas says that it will extend its CityFlyer services to the Sydney-Brisbane and Brisbane-Melbourne routes, add 16 services between Canberra and Sydney and Canberra and Melbourne, and operate Boeing 737s on all Canberra-Adelaide routes.

It is reported that Canberra Airport has put a proposal to the administrator to convert the Ansett terminal to a common user facility.

The Federal Court defers a decision on whether to approve the terms of the Federal Government's loan of $195 million.

'Australian Airlines Takes Off', Qantas press release, 11 December 2001.

'Qantas goes for Ansett's jugular', Australian Financial Review, 11 December 2001, p. 7

'Tesna schedules February flight', Australian Financial Review, 12 December 2001, p. 3.

9 December 2001 Virgin Blue says that it is seeking to strengthen its position before Tesna begins operations by negotiating arrangements with international airlines. The arrangments reportedly involve the airlines handling pasengers at Virgin terminals in return for unspecified special deals. Virgin Blue may also benefit from a new Queensland government policy of requiring agencies to obtain the best possible fares. 'Virgin to announce foreign carrier links', Australian Financial Review, 10 December 2001, p. 8.
7 December 2001 Lang Corporation CEO, Mr Chris Corrigan, reportedly has approached a number of major creditors, arguing that the Lang-Virgin bid may offer creditors more than the Tesna bid if Lang-Virgin were granted access to the data room that the administrators established.

The administrators say that they are considering all issues associated with Mr Corrigan's request to reopen the data room. They say that Lang Corporation had access to the data room from 1 October but note that Lang Corporation now wants Virgin Blue to have access.

'Up in the air. Lang fights on for Ansett', Age, 8 December 2001.
5 December 2001 The Federal Court delays approving the terms of the $195 million government loan to allow unsecured creditors to raise any concerns. The terms would prevent creditors from forcing the Government to subordinate its loan at a meeting of creditors in January 2002. 'Loan approval delay for Ansett', Australian Financial Review, 6 December 2001, p. 3.
4 December 2001 It is reported that Ansett and some unions are protesting against $50 fares that United Airlines is offering on the Sydney-Melbourne route. United Airlines is one of the airlines allowed to fly on domestic routes since the Government temporarily eased its cabotage policy. '$50 fares hurting Ansett', Australian Financial Review, 4 December 2001, p. 7.
30 November 2001 The administrators agree to allow Virgin Blue access to the Ansett Launceston terminal after the Federal Government presses them to reverse their decision to deny access. But the dispute over access at Canberra remains unresolved with administrator, Mr Mark Mentha, saying that there are legal reasons Ansett can not allow Virgin Blue to use the terminal for a new daily Canberra-Melbourne service. Mr Mentha says that the administrators cannot grant access to the Canberra terminal as it is part of the sale of Ansett to Tesna.

Administrator, Mr Mark Korda, says Virgin Blue has legal agreements to use Ansett's Canberra terminal for its Brisbane-Canberra route and the Launceston terminal, but not to use the Canberra terminal for its Melbourne flights. Administrator, Mr Mark Mentha, says that Virgin had not approached the administrator to use the Canberra teminal for its Melbourne flights until the afternoon of 29 November.

'Canberra steps into terminal row', Australian Financial Review, 1-2 December 2001, p. 4.

'Virgin did not have "legal agreement" to use Ansett terminal', AAP, 30 November 2001.

29 November 2001 The administrators deny Virgin Blue access to Ansett terminals in Canberra and Launceston after Virgin Blue begins a new daily Canberra-Melbourne service and a second Melbourne-Launceston service. The administrators also threaten to deny access totally to Virgin Blue at the two airports. The administrators say that it is not possible to agree to long-term lease agreements with Virgin Blue or increases in frequencies at the two airports while the sale of Ansett to Tesna is incomplete.

Canberra Airport threatens legal action to try to gain control of the terminal and convert it into a common use facility, and says that Ansett owes the airport a siginificant amount of rent which puts Ansett in breach of contract.

In a letter to the administrators, Federal Transport Minister, Hon. John Anderson, says "I am disturbed by these reports which suggest Ansett is using its privileged terminal access to hinder other airlines, even though it has received a high level of support from Australian taxpayers".

Administrator, Mr Mark Mentha, says that Virgin had been pre-selling tickets without asking the administrator if terminal access would be available.

'Ansett puts terminal squeeze on Virgin', Australian Financial Review, 30 November 2001, p. 3.

'Ansett administrators deny preventing Virgin terminal access', AAP, 30 November 2001.

28 November 2001 Administrator, Mr Mark Mentha, says that the Tesna bid has saved taxpayers $464 million. He also says that he has the full support of creditors to proceed with the bid, and that he expects unsecured creditors to receive between 5 and 16 cents in the dollar "depending on the realisation of global aviation assets". While the Tesna bid is "full steam ahead", the administrator has a "fall-back position with Singapore Airlines."

Federal Transport Minister, Hon. John Anderson, denies that Cabinet's decision to rule out concessions for the Tesna bid was politically motivated and affected by Lang Corporation's bid.

A committee of creditors agrees to accept the terms of the $195 million loan from the Federal government to fund redundancies. But some creditors say they would consider forcing the Government to subordinate its loan at a meeting of creditors in January 2002.

'Fox, Lew deal 'saves $464m' - Mentha', Australian Financial Review, 29 November 2001, p. 4.

'Fox firm: new Ansett to take off', Sydney Morning Herald , 29 November 2001.

'Loan approval delay for Ansett', Australian Financial Review, 6 December 2001, p.3.

27 November 2001 Federal Transport Minister, Hon. John Anderson, releases details of the Government's decisions regarding Tesna's claims for assistance. Mr Anderson says that the Government will not invest in Tesna nor provide support that skews the market in its favour.

On competition, Mr Anderson notes that the ACCC is inquiring into a number of matters involving Qantas and is increasing surveillance of the airline industry to ensure that no company misuses its market power. The ACCC is also seeking submissions about whether it should develop guidelines specifically for the industry in relation to anti-competitive conduct.

Mr Anderson also notes that Qantas has advised the Government that it is prepared to enter into a code of conduct about its business decisions and that officials are discussing such a code with the airline. Tesna will be able to compete for Federal government travel contracts and, provided its bids are competitive, could expect to win government contracts in proportion to its overall share of the market. The Government will exempt all general aviation airports from the airline ownership provisions of the Airports Act.

Mr Anderson says that the Government will make transitional regulations immediately and legislation will be introduced into Parliament early next year. Essendon Airport (owned by a consortium including Mr Fox) will remain a general aviation airport and Tesna will not be able to use it for scheduled services. The Civil Aviation Safety Authority will expedite Tesna's safety approvals, including its Air Operators Certificate, and will do everything it can to meet the company's timetable.

Ansett employees who transfer to the new company (Tesna) will be covered by the Government's General Employee Entitlements and Redundancy Scheme, which provides a safety net of full statutory entitlements and redundancy payments to the community standard of eight weeks for workers who are made redundant by an insolvent employer. Tesna will have access to all of the international rights held by Ansett International, including its codeshare rights, subject to the company resuming its commercial arrangements with its partner airlines.

Mr Anderson says that the Government has protected Ansett's slots at Sydney Airport, and that there are sufficient slots available to meet Tesna's operating requirements without disadvantaging other operators. The Government has provided Australian airlines with third party war risk indemnity cover since the commercial insurance industry withdrew from the market. The Government will provide Tesna with war risk cover on the same basis as Qantas and Virgin Blue. The Sydney Airports Corporation and Ansett were partway through simplifying the lease agreement for its Sydney domestic terminal when the company went into administration. The Government will ensure that the simplified lease agreement is concluded in a timely manner.

Mr Lindsay Fox accuses the Federal Government of trying to kill Ansett. Mr Fox alludes to a link between the Government's decision not to meet some of Tesna's claims for assistance with the bid for some Ansett assets by Lang Corporation. Mr Fox says that the Tesna consortium is "unambiguously committed" to buying Ansett.

Hon. John Anderson, 'Tesna consortiuum bid for Ansett Australia', media release A257/2001, 27 November 2001.

'Fox lashes out over Ansett snub', Australian Financial Review, pp. 1 and 6, 28 November 2001.

26 November 2001 Administrator, Mr Mark Korda, says that in discussions with Lang Corporation and Virgin Blue, they did not place a formal offer on the table. He says Lang Corporation managing director, Mr Chris Corrigan, and Virgin Blue executive director, Mr Brett Godfrey, wanted an update on the sale and had expressed an interest in Ansett assets. Mr Korda says that "We reaffirmed that the business had been sold and they reaffirmed to us that if the sale didn't go ahead, they would be interested in certain employees and certain terminals".

Mr Corrigan says that, technically, his bid might not have a hope unless Mr Fox and Mr Lew pulled out but says that "The Fox-Lew proposals have a large number of conditions precedent, as we understand it, and who's to know whether those are satisfied or not."

Mr Korda confirms that the administrators plan to launch Ansett Mark II on 31 January and expect the launch to take place. But Mr Korda says that "This is a complex deal ... and there is a risk that the consortium won't meet those condition precedents. But we think progress is very very good at the moment". He also says that conditions could be waived or extended by mutual agreement from both parties. A "substantial" deposit had been put down on the airline, which was refundable under certain circumstances.

Federal Transport Minister, Hon. John Anderson says that cabinet would make a final decision on two central issues this week: the Government's attitude to buying tickets and a proposed voluntary code of conduct by Qantas to ensure a viable marketplace for a second domestic airline.

'Ansett administrators reject fresh interest in airline', AAP, 26 November 2001.

'Ansett administrators to press ahead with sale to Lew-Fox', AAP, 26 November 2001.

24-25 November 2001 Lang Corporation agrees to take a majority $300 million stake in the Virgin Blue. The agreement is conditional on Lang buying Ansett terminals and maintenance facilities, and would employ around 1,500 Ansett staff. Virgin Blue chief executive, Mr Brett Godfrey, says that Virgin Blue had agreed to the Lang Corporation deal because its current facilities would reach maximum capacity in about 18 months and Ansett's terminals and other facilities would allow it to grow substantially. 'Virgin Blue could be Aust-owned in Lang bid for Ansett', AAP, 25 November 2001.
23 November 2001 Mr David Huttner of Virgin Blue says that "Major creditors have approached us to say that they are not convinced that the Fox-Lew deal is in their interests and that they are concerned at the way the process is being driven". Senior officials from Ansett unions dismiss the Lang-Virgin Blue proposal and reconfirm their support for the Fox-Lew bid. 'Creditors 'unhappy' with the Fox-Lew bid', Australian Financial Review, 24-5 November 2001, p. 8.
22 November 2001 Lang Corporation chief executive, Mr Chris Corrigan, announces that Lang, together with Virgin Blue, is ready to bid for Ansett. Mr Corrigan says that the proposal does not require Federal government financial support. Mr Corrigan rejects as "totally false" suggestions that the bid is a union-busting exercise. Virgin Blue executives confirm that the proposal entails Lang buying a substantial slice of Virgin Blue.

Following a meeting with the Messrs Fox and Lew, Federal Transport Minister, Hon. John Anderson, says that all outstanding issues had been resolved apart from two regulatory issues which he declined to detail. Mr Anderson says that the Government has agreed to provide some assistance to the Fox-Lew (Tesna) consortium regarding the regulatory environment that Tesna would operate under, as well as some issues relating to the cross-ownership of airports.

ACCC commissioner, Mr Ross Jones, says that the ACCC is examining 12 specific allegations of anti-competitive conduct by Qantas, and has launched a broad inqiury to determine whether specific guidelines are required in the aviation market in Australia. ACCC chairman, Dr Fels says that the allegations were made by Virgin Blue, the Ansett administrators and one airport. Dr Fels says that "Given the breadth of their specific complaints, it's sensible to extend investigation into wider analysis of anti-competitive conduct in the aviation industry".

In a letter to the Ansett Administrators, the Federal Minister for Transport and Regional Services, Hon. John Anderson, reaffirms the Government's position requiring the administrators to repay the Government's advance to cover employee entitlements under the SEESA Scheme. "For the proposed advance to the Administrators of taxpayer's funds under the SEESA Scheme, the Government will not be relinquishing the normal statutory priority which applies for repayment". This has been made clear to the administrators on many occasions and the Government would not change its mind. The Government's objective in putting in place SEESA was to ensure that retrenched Ansett workers received their statutory entitlements on a timely basis. The alternative would be for employees to possibly wait several years in the hope of being paid by the Administrator. SEESA, and the Ticket Levy which underpins it, were never intended to be utilised to meet Ansett's liabilities to its unsecured creditors. "SEESA is a safety net for employees, not taxpayers funds to be used at the discretion of the administrators." The Government rejects the assertion that, in introducing the Ticket Levy and in seeking to "stand in the shoes" of employees as a priority creditor, it was somehow "double-dipping. We will cancel the Ticket Levy when the overall funding needed under SEESA is clearer, and when the Administrators provide a clearer indication of the value of assets available to creditors". In the unlikely event that there were any surplus funds available from the Ticket Levy, the Government will channel them back into the industry for purposes such as the provision of additional support to regional aviation or aviation-dependent tourism.

'Corrigan: no strings on Ansett bid', Australian Financial Review, 23 November 2001, pp. 1 and 4.

'Virgin Blue could be Aust-owned in Lang bid for Ansett', AAP, 25 November 2001.

ACCC, 'Airlines investigation update', media release, 22 November 2001.

Hon. John Anderson, 'Government Reaffirms Position on Ansett', media release A250/2001, 22 November 2001.

19 November 2001 Sir Richard Branson reportedly will consider relinquishing control of Virgin Blue to divert funds to Virgin Atlantic, which has been hit by the downturn in the world airline industry.

Co-administrator, Mr Mark Mentha, says that Ansett is trading at a small loss. Load factors are adequate to keep the business operating in its present form, and the main reason for the losses is the cost of paying for unused terminals in regional centres. Mr Mentha says that is is important to keep these terminals intact in order to sell Ansett as a going concern even though they are a drain on Ansett's finances.

Mr Mentha criticises comments by Virgin Blue that it has not been given access to the data room the administrators set up. Mr Mentha says that the data room has been closed because Ansett has already been sold to the Fox-Lew consortium.

In response to a question on Qantas's dominance of the domestic aviation industry, the chairman of the ACCC, Dr Alan Fels, says that "The provisions [of the Trade Practices Act] concerning the misuse of market power should be strengthened".

'Branson may sell control of Virgin Blue', Australian Financial Review, 19 November 2001, p. 3.

'Ansett lures back accounts', Australian Financial Review, 20 November 2001, p. 5.

16 November 2001 Lang Corporation CEO, Mr Chris Corrigan, and Virgin Blue representatives brief the Federal Transport Minister, Hon. John Anderson, on their proposal.

Mr Anderson indicates that the Government will not accede to a demand from the administrators to convert the $195 million loan into a grant, saying "That money was not made available nor legislated for to be made available to other creditors, which the administrators are asking for".

Mr Anderson also reveals that the Fox-Lew bid includes a demand that the Government underwrite passenger numbers. Mr Anderson states that "We think that is difficult and we've asked them to have another look at what they realistically might ask of us".

'Lang, Virgin table Ansett plan', Australian Financial Review, 17-18 November 2001, p. 5.
15 November 2001 A meeting of the committee of creditors endorses the Fox-Lew proposal. The administrators say that, if the Fox-Lew proposal were to succeed, $223 million would be left over to pay unsecured creditors, returning 15 cents in the dollar.

The committee also hears that Lang Corporation has proposed a deal to acquire Ansett terminals and infrastructure, in conjunction with an equity deal with Virgin Blue, that would lead to the expansion of Virgin Blue and the employment of about 2,000 Ansett staff.

Messrs Fox and Lew set November 24 as the deadline for the Government to agree to their key demands.

'Lang, Virgin table Ansett plan', Australian Financial Review, 17-18 November 2001, p. 5.

'Fox, Lew set Nov 24 deadline', Australian Financial Review, 16 November 2001, p. 7.

14 November 2001 The ANstaff syndicate lodges a counter-offer for Ansett.

Sydney Airport Corporation (SAC) has reportedly proposes to buy Ansett's Sydney terminal and convert it to a common-use terminal. SAC is reportedly concerned that the Fox-Lew proposal would not fully utilise the terminal, decreasing its value. But co-administrator, Mr Mark Korda, says that the proposal has not been put to him.

'Ansett deal: Howard holds key', Australian Financial Review, 15 November 2001, pp. 1and 6.
13 November 2001 In response to a revised Fox-Lew proposal, Federal Transport Minister, Hon. John Anderson, says that the proposal seeks reasonable non-financial measures, better protection from rivals' anti-competitive tactics, and the expedition of approvals such as the transfer of Ansett's air operator certificate.

Administrators Korda and Mentha say that if the Government does not back down from its position that the loan of $195 million be treated as a secured creditor, unsecured creditors were unlikely to get a return and could vote down the Fox-Lew proposal, probably leading to Ansett's liquidation. The administrators say that if Ansett were liquidated, there was likely to be a shortfall on the $700 million owed to staff as priority creditors, and unsecured creditors would get nothing. The administrators estimate that if the Government were to convert the $195 million loan into a grant, unsecured creditors would receive up to 20 cents in the dollar.

AirNZ says that it would sell tickets on Ansett Mark II under a new commercial agreement.

'Ansett bid gains ground in Canberra', Australian Financial Review, 14 November 2001, pp. 1 and 6.
12 November 2001 It is reported that the Fox-Lew consortium expects to lose up to $120 million in the first year of operating a new Ansett but expect a profit of $50 million in the third year. The Prime Minister, Hon. John Howard, says that the Government would have to be "satisfied that the industrial relations arangements proposed for the future [under the Fox-Lew proposal] are realistic". 'Lew, Fox budget for $120 million loss', Australian Financial Review, 13 November 2001, p. 3.
11 November 2001 The Prime Minister, Hon. John Howard, says that the Government would consider the Ansett proposal as a matter of priority. Federal Transport Minister, Hon. John Anderson, says that the Government would leave open the possibility of targeted assistance to Ansett of the sort given to regional airlines.

Ansett Mark II is reportedly incurring losses because of its terminal lease obligations and not because of poor load factors.

'PM makes Ansett priority as Fox, Lew set deadline', Australian Financial Review, 12 November 2001, pp. 1 and 4.

'Virgin's winning ways as simple as saying 'no'', Australian Financial Review, 12 November 2001, p. 4.

9 November 2001 Federal Transport Minister, Hon. John Anderson, questions the viability of the Fox-Lew bid because it depends heavily on government assistance. A letter from the CEO of Virgin Blue, Mr Brett Godfrey, to Mr Anderson claims that Virgin's and Qantas's commitments to buy aircraft would return capacity to the level that existed when Ansett collapsed, and that the Fox-Lew proposal to add up to 29 aircraft would undermine the market. Mr Godfrey says that this problem would be averted if it were left to the market. It is reported that the administrators have said that Ansett is losing money. 'Anderson questions Ansett sale terms', Australian Financial Review, 10-11 November 2001, p. 3.
8 November 2001 Ansett administrators, Mark Mentha and Mark Korda of Andersen, enter into an agreement with the Solomon Lew - Lindsay Fox consortium and Tesna Holdings Ltd for the sale of the airline. Under the agreement Tesna will acquire the mainline airline assets of Ansett and assume responsibility for the continuing employment of approximately 4,000 employees. In addition the consortium will be injecting cash into Tesna to capitalise the company and ensure that it can meet its business objectives and remain viable and competitive in the long term. The total value of the acquisition and cash injection is in excess of $AUS1.1 billion. Tesna's business plan calls for the establishment of Ansett Mark II as a full service airline for which it intends to acquire and finance a new fleet of 29 Airbus aircraft valued in excess of $AUS2.5 billion. The agreement contains a number of conditions including:
  • Approval by all Ansett creditors at a second meeting to be held prior to the completion of the sale transaction on January 31, 2002.
  • Tesna acquiring the domestic airline terminals, the jet base and maintenance base located at Melbourne Airport and the flight simulator data centres at Tullamarine.
  • Acquiring various ancillary infrastructure of the airline and plant and equipment associated with these facilities.

Tesna has agreed to source its maintenance requirements from the Ansett engineering facilities, which are located predominantly at Tullamarine. The parties have agreed to work closely together to finalise all legal documentation and to obtain all necessary approvals by January 31, 2002. The agreement also contains provisions for Commonwealth and state government support designed to benefit all Ansett stakeholders. In announcing the agreement Mr Korda said that it maximised the chances of the new airline surviving as well as providing continuing employment opportunities for Ansett employees. Apart from the 4,000 in the mainline business, another 2,500 staff are employed in regional Australia in airlines the administrators intend to sell. He said the administrators recognised the need for further work by all stakeholders during the coming months to achieve the Ansett solution.
"On completion of this transaction, however, we believe that the chances of as much as possible of the Ansett business continuing in existence and providing a satisfactory return to creditors has been maximised." "This agreement represents the best opportunity for the restoration of Ansett as a competitive and viable airline. "We are satisfied that Ansett Mark II will now develop into the sort of competitive airline to which Australia is entitled."

Federal Transport Minister, Hon John Anderson, welcomes the announcement but does not commit the Government to providing financial support.

Executive chairman of the seven television network, Mr Kerry Stokes, offers to buy Ansett's WA subsidisary, SkyWest.

Ansett media release

'Ansett coup for Fox and Lew', Australian Financial Review, 9 November 2001, pp. 1 and 21.

'Fox-Lew Ansett bid gets lift-off', Australian Financial Review, 9 November 2001, p. 20.

7 November 2001 Qantas CEO, Mr Geoff Dixon, criticises proposals for 'special deals' with governments and unions to keep Ansett flying, saying that such deals would distort the domestic aviation market. Federal Transport Minister, Hon John Anderson, says that the Fox-Lew request for government assistance, reportedly for $600 million, is excessive. A senior government source says that the ANstaff consortium is also seeking government assistance. Vitorian Premier, Hon Steve Bracks, is reported as having promised incentives for Ansett mark II including payroll tax concessions. 'Qantas lashes out at Ansett Deals', Australian Financial Review, 8 November 2001, pp. 1 and 9.
5 November 2001 Stevedoring company, Lang Corporation, is reported as working on a proposal to buy some Ansett assets in conjunction with Virgin Blue. CEO of Virgin Blue, Mr Brett Godfrey, confirms that Lang is one of about a dozen potential investors the airline is talking to regarding Virgin's capital raising. The report says that Lang may be interested in acquiring Ansett terminals and a deal to allow Virgin to operate from those terminals, and that Lang may also be interested in acquiring Ansett's freight business.The chairman of the ACCC, Dr Fels, says that a deal involving Ansett and Virgin "would require very careful consideration under the Trade Practices Act".

Virgin Blue's CEO, Mr Brett Godfrey, says that Virgin could, by expanding its fleet, capture up to 24 per cent of the market by the third quarter next year, if it is not obstructed by government subsidies.

'Lang-Virgin plan for Ansett bid', Australian Financial Review, 5 November 2001, p. 3.

'Showdown on future of Ansett bid', Australian Financial Review, 6 November 2001, p. 3.

4 November 2001 ANstaff's financial adviser, Mr Michael Jones, says that the group is talking to two foreign investors to try to secure $50 million to complete a $500 million financing package. 'Lang-Virgin plan for Ansett bid', Australian Financial Review, 5 November 2001, p. 3.
2 November 2001 Mr Robin Brett, QC, for the Government, tells the Federal Court that revenue from the ticket levy need not be passed on to fund entitlements for Ansett employees since the Act that raises the levy does not specify how the revenue must be spent. Mr Brett says that the Government "would stand in employees' shoes" as a priority creditor to recoup from Ansett assets a $195 million loan. 'Ansett funds may not be passed on to employees, court told', AAP, 2 November 2001
1 November 2001 Mr Graeme McMahon, head of the ANstaff syndicate, admits that the syndicate is finding it difficult to raise finance. A press report says that the administrators are negotiating with a financial institution "with close links to Singapore". 'Doubts fly about Ansett Mk II', Australian Financial Review, 2 November 2001, p. 5.

Chronology continued August to October

Commonwealth of Australia
Chronologies are written for Members of Parliament, being located on the Internet they can be read by members of the public, however some linked items are available to Members of Parliament only, due to copyright reasons.