News: Ansett's death spiral started decades ago
Mar 2, 2002, 10:04 am
#1
Original Poster
Join Date: Dec 2000
Location: Melbourne, Vic., Australia.
Programs: QF Platinum One (LTG), UA Plat IHG Plat
Posts: 5,836
News: Ansett's death spiral started decades ago
I believe this is a good article...
---
Ansett's death spiral started decades ago
Gary Hughes
March 3 2002
In aviation terms it is known as the "death spiral" or "graveyard turn".
It happens when an inexperienced pilot flies into cloud or mist and, rather than trusting the aircraft's instruments, relies on his own instincts to stay straight and level.
The aircraft begins a slipping, downwards turn one way or the other and the airspeed builds up. The pilot thinks he is level because of the increasing G-forces, but keeps pulling back on the stick or yoke to slow the aircraft down. All that does is tighten the descending spiral.
The uncontrollable corkscrew dive ends when either the wings are torn from the aircraft, or it crashes into the ground.
In 1980 transport magnate Sir Peter Abeles, inexperienced in the airline business but eager to make his mark, slipped behind the controls of Ansett and flew towards the fog of the highly competitive international aviation industry.
It would take another two decades for the once great airline's death spiral to tighten to the point of fatal impact, but that made the end no less inevitable.
Bob Ansett, the son of legendary company founder and aviation pioneer Sir Reginald Ansett, has watched the slow death dive with mounting sadness.
He watched as his father was ruthlessly replaced by Abeles and co-owner News Corporation after their 1980 hostile takeover of Ansett. He watched his father die the following year a largely broken-hearted man. He watched as the inexperienced Abeles began making the first wrong turns, diversifying, driving up costs and directing profits away from re-investment.
He watched as the downward spirals tightened during the 1990s, with the ageing of Ansett's aircraft fleet, the sale of Abeles' share to Air New Zealand, News Corporation's attempts to unload its 50 per cent share and industrial unrest among a once passionately loyal workforce. And he has watched during the past five months, as administrators and the Tesna consortium led by businessmen Lindsay Fox and Solomon Lew played out the final act in the Ansett saga.
"It's been a litany of bad judgment, bad policy, greed, opportunism," says Bob Ansett from his home at Noosa, in Queensland.
"Up until a few days ago it continued and it all contributed to the sad result we are going to experience on Monday."
In its heyday under Sir Reginald, Ansett seemed indestructible.
Built from the fledgling transport and aviation company he founded in Hamilton in 1936, it was by the 1970s Australia's largest airline and at the cutting edge of the world aviation industry with a modern fleet of aircraft, dedicated workforce, dominance over the highly profitable business class market and support of big institutional investors.
"When I came back to Australia in the 1960s having spent 20 years in America, the Ansett company was one of the most admired and respected in Australia," says Bob Ansett. "And it grew enormously over the next decade. It wasn't just airlines, although they were recognised around the world as being at the leading edge of aviation."
Within the profitable Ansett stable was road transport, air freight, an extensive tourism operation that included hotels and Barrier Reef island resorts and the Channel Ten network.
"It was a very dynamic, entrepreneurial, creative company," says Ansett.
"The techniques they used, the equipment they used was the most up to date in the world and it was a young fleet of aeroplanes and they kept it that way.
"On the aviation side, there was a great deal of admiration and in some ways envy for the unbelievable loyalty my father had been able to generate with the people who worked in the company."
Sir Peter Abeles first unsuccessfully tried to snatch Ansett during the 1970s, but failed when the Victorian Government led by Sir Henry Bolte intervened to block him. When he returned in 1980s with Rupert Murdoch at his side, there was little the Ansett family, with its minority shareholding, could do.
"Here is a person (Abeles) who had no experience at aviation, who for his own reasons wanted to get into the airline industry," says Bob Ansett. "I think both News Corporation and TNT (Abeles' company) went in for the wrong reasons. They saw Ansett as something of a cash cow to feed their other business activities.
"All of a sudden it wasn't the same company."
During the 1980s Ansett gradually began to lose its dominance.
"Historically, Ansett dominated the market in business class travel. By the mid 1980s, TAA had taken over that lucrative part of the market. It was just a sign, in my opinion, of things to come," says Ansett.
Abeles' inexperience led to him purchasing too many different types of aircraft. Crews could not be swapped easily between types, maintenance was more difficult and expensive, spare parts could not be swapped. Costs grew.
"These are all the things that experienced people in aviation were attuned to," says Ansett. "That ultimately came back to haunt the organisation when Air New Zealand bought out TNT's share in the 1990s."
As News Corporation sought a buyer for its share during the 1990s, capital investment was kept to a minimum, staff loyalty waned and industrial unrest grew. News Corporation eventually negotiated to sell to Singapore Airlines, but Air New Zealand exercised its right to purchase the stake instead.
"The airline was into one of those dives where it seemed it was incapable of pulling itself out," observes Ansett.
He previously hoped the Ansett company name was powerful enough to survive in some form, but "in the last six months, I've accepted it was increasingly unlikely".
The Ansett name is worth less as an asset than the individual aircraft that carried it, he admits. "How do I feel? I feel very sad about it," says Ansett of the cutting of his family's name with the aviation industry.
Tomorrow, as the last plane takes to the air for the final flight, he plans to sit on his balcony at Noosa, have a quiet drink and "reflect on what it was like when Ansett represented something very exciting".
http://www.theage.com.au/articles/20...705006735.html
---
Ansett's death spiral started decades ago
Gary Hughes
March 3 2002
In aviation terms it is known as the "death spiral" or "graveyard turn".
It happens when an inexperienced pilot flies into cloud or mist and, rather than trusting the aircraft's instruments, relies on his own instincts to stay straight and level.
The aircraft begins a slipping, downwards turn one way or the other and the airspeed builds up. The pilot thinks he is level because of the increasing G-forces, but keeps pulling back on the stick or yoke to slow the aircraft down. All that does is tighten the descending spiral.
The uncontrollable corkscrew dive ends when either the wings are torn from the aircraft, or it crashes into the ground.
In 1980 transport magnate Sir Peter Abeles, inexperienced in the airline business but eager to make his mark, slipped behind the controls of Ansett and flew towards the fog of the highly competitive international aviation industry.
It would take another two decades for the once great airline's death spiral to tighten to the point of fatal impact, but that made the end no less inevitable.
Bob Ansett, the son of legendary company founder and aviation pioneer Sir Reginald Ansett, has watched the slow death dive with mounting sadness.
He watched as his father was ruthlessly replaced by Abeles and co-owner News Corporation after their 1980 hostile takeover of Ansett. He watched his father die the following year a largely broken-hearted man. He watched as the inexperienced Abeles began making the first wrong turns, diversifying, driving up costs and directing profits away from re-investment.
He watched as the downward spirals tightened during the 1990s, with the ageing of Ansett's aircraft fleet, the sale of Abeles' share to Air New Zealand, News Corporation's attempts to unload its 50 per cent share and industrial unrest among a once passionately loyal workforce. And he has watched during the past five months, as administrators and the Tesna consortium led by businessmen Lindsay Fox and Solomon Lew played out the final act in the Ansett saga.
"It's been a litany of bad judgment, bad policy, greed, opportunism," says Bob Ansett from his home at Noosa, in Queensland.
"Up until a few days ago it continued and it all contributed to the sad result we are going to experience on Monday."
In its heyday under Sir Reginald, Ansett seemed indestructible.
Built from the fledgling transport and aviation company he founded in Hamilton in 1936, it was by the 1970s Australia's largest airline and at the cutting edge of the world aviation industry with a modern fleet of aircraft, dedicated workforce, dominance over the highly profitable business class market and support of big institutional investors.
"When I came back to Australia in the 1960s having spent 20 years in America, the Ansett company was one of the most admired and respected in Australia," says Bob Ansett. "And it grew enormously over the next decade. It wasn't just airlines, although they were recognised around the world as being at the leading edge of aviation."
Within the profitable Ansett stable was road transport, air freight, an extensive tourism operation that included hotels and Barrier Reef island resorts and the Channel Ten network.
"It was a very dynamic, entrepreneurial, creative company," says Ansett.
"The techniques they used, the equipment they used was the most up to date in the world and it was a young fleet of aeroplanes and they kept it that way.
"On the aviation side, there was a great deal of admiration and in some ways envy for the unbelievable loyalty my father had been able to generate with the people who worked in the company."
Sir Peter Abeles first unsuccessfully tried to snatch Ansett during the 1970s, but failed when the Victorian Government led by Sir Henry Bolte intervened to block him. When he returned in 1980s with Rupert Murdoch at his side, there was little the Ansett family, with its minority shareholding, could do.
"Here is a person (Abeles) who had no experience at aviation, who for his own reasons wanted to get into the airline industry," says Bob Ansett. "I think both News Corporation and TNT (Abeles' company) went in for the wrong reasons. They saw Ansett as something of a cash cow to feed their other business activities.
"All of a sudden it wasn't the same company."
During the 1980s Ansett gradually began to lose its dominance.
"Historically, Ansett dominated the market in business class travel. By the mid 1980s, TAA had taken over that lucrative part of the market. It was just a sign, in my opinion, of things to come," says Ansett.
Abeles' inexperience led to him purchasing too many different types of aircraft. Crews could not be swapped easily between types, maintenance was more difficult and expensive, spare parts could not be swapped. Costs grew.
"These are all the things that experienced people in aviation were attuned to," says Ansett. "That ultimately came back to haunt the organisation when Air New Zealand bought out TNT's share in the 1990s."
As News Corporation sought a buyer for its share during the 1990s, capital investment was kept to a minimum, staff loyalty waned and industrial unrest grew. News Corporation eventually negotiated to sell to Singapore Airlines, but Air New Zealand exercised its right to purchase the stake instead.
"The airline was into one of those dives where it seemed it was incapable of pulling itself out," observes Ansett.
He previously hoped the Ansett company name was powerful enough to survive in some form, but "in the last six months, I've accepted it was increasingly unlikely".
The Ansett name is worth less as an asset than the individual aircraft that carried it, he admits. "How do I feel? I feel very sad about it," says Ansett of the cutting of his family's name with the aviation industry.
Tomorrow, as the last plane takes to the air for the final flight, he plans to sit on his balcony at Noosa, have a quiet drink and "reflect on what it was like when Ansett represented something very exciting".
http://www.theage.com.au/articles/20...705006735.html
Mar 2, 2002, 5:12 pm
#2
Join Date: Dec 2001
Posts: 1,617
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RichardMEL:
It would take another two decades for the once great airline's death spiral to tighten to the point of fatal impact, but that made the end no less inevitable.
Bob Ansett, the son of legendary company founder and aviation pioneer Sir Reginald Ansett, has watched the slow death dive with mounting sadness.
He watched as his father was ruthlessly replaced by Abeles and co-owner News Corporation after their 1980 hostile takeover of Ansett. He watched his father die the following year a largely broken-hearted man. He watched as the inexperienced Abeles began making the first wrong turns, diversifying, driving up costs and directing profits away from re-investment.
He watched as the downward spirals tightened during the 1990s, with the ageing of Ansett's aircraft fleet, the sale of Abeles' share to Air New Zealand, News Corporation's attempts to unload its 50 per cent share and industrial unrest among a once passionately loyal workforce. And he has watched during the past five months, as administrators and the Tesna consortium led by businessmen Lindsay Fox and Solomon Lew played out the final act in the Ansett saga.
"It's been a litany of bad judgment, bad policy, greed, opportunism," says Bob Ansett from his home at Noosa, in Queensland.
"Up until a few days ago it continued and it all contributed to the sad result we are going to experience on Monday."
[...]
</font>
It would take another two decades for the once great airline's death spiral to tighten to the point of fatal impact, but that made the end no less inevitable.
Bob Ansett, the son of legendary company founder and aviation pioneer Sir Reginald Ansett, has watched the slow death dive with mounting sadness.
He watched as his father was ruthlessly replaced by Abeles and co-owner News Corporation after their 1980 hostile takeover of Ansett. He watched his father die the following year a largely broken-hearted man. He watched as the inexperienced Abeles began making the first wrong turns, diversifying, driving up costs and directing profits away from re-investment.
He watched as the downward spirals tightened during the 1990s, with the ageing of Ansett's aircraft fleet, the sale of Abeles' share to Air New Zealand, News Corporation's attempts to unload its 50 per cent share and industrial unrest among a once passionately loyal workforce. And he has watched during the past five months, as administrators and the Tesna consortium led by businessmen Lindsay Fox and Solomon Lew played out the final act in the Ansett saga.
"It's been a litany of bad judgment, bad policy, greed, opportunism," says Bob Ansett from his home at Noosa, in Queensland.
"Up until a few days ago it continued and it all contributed to the sad result we are going to experience on Monday."
[...]
</font>
It's great for pointing out that this sad state of affairs has been decades in the making. And that even Ansett's founder's and namesakes son understands this and doesn't single out News Corp, TNT, the government, Air New Zealand or Tensa. There has been more than enough incompetence or bad decisions on most everyone's part.
That's in striking contrast to many articles, people or unions who feel the need to single one out. More typically we see such things as ... the government being blamed by Tensa. The unions blocking Air New Zealand aircraft. Posters on FT joke about trashing Koru lounges. Pretty much everthing except the fact that Ansett has been a poorly run *business* for quite some time involving quite a number of participants.
[This message has been edited by Quokka (edited 03-02-2002).]
Mar 2, 2002, 11:37 pm
#3
Original Poster
Join Date: Dec 2000
Location: Melbourne, Vic., Australia.
Programs: QF Platinum One (LTG), UA Plat IHG Plat
Posts: 5,836
I never trashed the Koru lounge - just drank as much as possible http://www.flyertalk.com/forum/biggrin.gif
AN may have been unsteady but the rot really set in after Eddington left and NZ took control and ousted a lot of the management Eddington had put in, put their own people in and basically bit off far more than they could chew. I work with some ex-AN IT people who have many stories of idiotic decisions handed down from Auckland on a whim, and other stuff. Then, when NZ blocked SQ's wish to buy 50% that really killed it. NZ's own shocking state post-AN shows to some degree just how bad they were (and it can not all be blamed on AN's losses dragging it down).
I believe up till NZ taking over AN was a viable business. Sure, it was not the dominant beast it once was, but if the fleet had been rationalised as Eddington wanted, and things restructured properly, it could (I believe) take on QF renewed.
Yes, the mess started with Abeles, but NZ nailed the coffin shut, and let's not forget the persistent stories of NZ's rape and pillage of AN - eg: charging fueling of theirtaircraft to AN, catering ditto, taking spares and parts when they pulled out, and so on.
Having said all that, I think the latest claims of class actions against NZ and so on are nonsense. They can't get any money out of NZ who is in dire trouble as it is. And I don't think that will get anywhere.
Unfortunately Ansett is dead, leaving DJ to propsper and QF to become an arrogant cash cow - let's hope it doesn't turn into an AC.
------------------
RichardMEL, UA 1K
A Star Alliance Member.
* * *
Ansett Australia: In memory of "One of the world's great airlines"
AN may have been unsteady but the rot really set in after Eddington left and NZ took control and ousted a lot of the management Eddington had put in, put their own people in and basically bit off far more than they could chew. I work with some ex-AN IT people who have many stories of idiotic decisions handed down from Auckland on a whim, and other stuff. Then, when NZ blocked SQ's wish to buy 50% that really killed it. NZ's own shocking state post-AN shows to some degree just how bad they were (and it can not all be blamed on AN's losses dragging it down).
I believe up till NZ taking over AN was a viable business. Sure, it was not the dominant beast it once was, but if the fleet had been rationalised as Eddington wanted, and things restructured properly, it could (I believe) take on QF renewed.
Yes, the mess started with Abeles, but NZ nailed the coffin shut, and let's not forget the persistent stories of NZ's rape and pillage of AN - eg: charging fueling of theirtaircraft to AN, catering ditto, taking spares and parts when they pulled out, and so on.
Having said all that, I think the latest claims of class actions against NZ and so on are nonsense. They can't get any money out of NZ who is in dire trouble as it is. And I don't think that will get anywhere.
Unfortunately Ansett is dead, leaving DJ to propsper and QF to become an arrogant cash cow - let's hope it doesn't turn into an AC.
------------------
RichardMEL, UA 1K
A Star Alliance Member.
* * *
Ansett Australia: In memory of "One of the world's great airlines"
Mar 4, 2002, 12:39 pm
#4
Join Date: Jul 1999
Location: SYD, GOT
Programs: BA GGL; SK EBG; QF LTG; Hilton Diamond, A-Club Platinum, Marriott Platinum
Posts: 2,723
Two comments;
1. Isn't it Eddington who is now sitting on top of BAs largest ever loss? (ps. Yes I know is manegemnet of CX was excellnt but since then? AN and now BA?).
2. Bob Ansett if memory serves me rightly stuffed up his own string of car rental businesses in the late 1980s and was declared bankrupt. Of course seems to be sitting quite happily in his mansion in Qld. I wonder if the same could be said of his former staff.
Interesting commentary?
Mark
1. Isn't it Eddington who is now sitting on top of BAs largest ever loss? (ps. Yes I know is manegemnet of CX was excellnt but since then? AN and now BA?).
2. Bob Ansett if memory serves me rightly stuffed up his own string of car rental businesses in the late 1980s and was declared bankrupt. Of course seems to be sitting quite happily in his mansion in Qld. I wonder if the same could be said of his former staff.
Interesting commentary?
Mark
Mar 4, 2002, 5:59 pm
#5
Original Poster
Join Date: Dec 2000
Location: Melbourne, Vic., Australia.
Programs: QF Platinum One (LTG), UA Plat IHG Plat
Posts: 5,836
Mark, that Helen Clark should keep her mouth shut.
(no disputing Bob Ansett, and I cringed when he was brought out on sky news last night to wax lyrical about the good old days....)
--
Ansett was a lemon: Clark
05Mar02
ANSETT was a lemon that New Zealand's national carrier should never have bought, NZ Prime Minister Helen Clark has said.
Ansett's former owner, Air New Zealand, has been widely blamed for the airline's collapse after placing it in voluntary administration last year.
Today, Ms Clark said the purchase of the now-defunct airline should never have gone ahead.
"I think Ansett was an airline with quite considerable problems which Air New Zealand foolishly bought into lock, stock and barrel without any due diligence in order to keep Singapore Airlines out," Ms Clark said on ABC Radio in Brisbane.
"Air New Zealand then, with pass-the-parcel, ended up with the headache, and it got out and obviously the subsequent attempts to revive Ansett haven't worked either.
"I think they bought a lemon."
Ms Clark said Air New Zealand, which was bailed out of financial strife by the NZ government last year, had not been involved with Ansett for some months.
"It's fair to say that the Air New Zealand which got into the difficulty with Ansett was an airline which was substantially controlled out of Singapore and Australia, and in which Kiwis had very little shareholding at all," she said.
"So as New Zealand prime minister, I can't take any responsibility for it whatsoever."
Air New Zealand has also been accused of stripping Ansett of its assets, but Ms Clark denied that had been the case.
http://news.com.au/common/printpage/...892701,00.html
------------------
RichardMEL, UA 1K
A Star Alliance Member.
* * *
Ansett Australia: In memory of "One of the world's great airlines"
Feb 17, 1936 - March 4, 2002. R.I.P
(no disputing Bob Ansett, and I cringed when he was brought out on sky news last night to wax lyrical about the good old days....)
--
Ansett was a lemon: Clark
05Mar02
ANSETT was a lemon that New Zealand's national carrier should never have bought, NZ Prime Minister Helen Clark has said.
Ansett's former owner, Air New Zealand, has been widely blamed for the airline's collapse after placing it in voluntary administration last year.
Today, Ms Clark said the purchase of the now-defunct airline should never have gone ahead.
"I think Ansett was an airline with quite considerable problems which Air New Zealand foolishly bought into lock, stock and barrel without any due diligence in order to keep Singapore Airlines out," Ms Clark said on ABC Radio in Brisbane.
"Air New Zealand then, with pass-the-parcel, ended up with the headache, and it got out and obviously the subsequent attempts to revive Ansett haven't worked either.
"I think they bought a lemon."
Ms Clark said Air New Zealand, which was bailed out of financial strife by the NZ government last year, had not been involved with Ansett for some months.
"It's fair to say that the Air New Zealand which got into the difficulty with Ansett was an airline which was substantially controlled out of Singapore and Australia, and in which Kiwis had very little shareholding at all," she said.
"So as New Zealand prime minister, I can't take any responsibility for it whatsoever."
Air New Zealand has also been accused of stripping Ansett of its assets, but Ms Clark denied that had been the case.
http://news.com.au/common/printpage/...892701,00.html
------------------
RichardMEL, UA 1K
A Star Alliance Member.
* * *
Ansett Australia: In memory of "One of the world's great airlines"
Feb 17, 1936 - March 4, 2002. R.I.P
Mar 4, 2002, 6:32 pm
#6
Join Date: Dec 2001
Posts: 1,617
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">
"So as New Zealand prime minister, I can't take any responsibility for it whatsoever."
</font>
"So as New Zealand prime minister, I can't take any responsibility for it whatsoever."
</font>
I'm still aghast at Clark's comments awhile back telling Air NZ shareholders to hold on to their shares.
[This message has been edited by Quokka (edited 03-04-2002).]
Mar 5, 2002, 12:09 am
#7
Join Date: Jun 2001
Location: Sydney
Programs: QF Platinum
Posts: 835
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RichardMEL:
let's not forget the persistent stories of NZ's rape and pillage of AN - eg: charging fueling of theirtaircraft to AN, catering ditto, taking spares and parts when they pulled out, and so on. </font>
let's not forget the persistent stories of NZ's rape and pillage of AN - eg: charging fueling of theirtaircraft to AN, catering ditto, taking spares and parts when they pulled out, and so on. </font>
The story with regards to the NZ 747 that came over to pick up a large amount of 737 spares was nothing more than a complete and utter fabrication coming right from the union.
I think the unions have a lot to answer for in this regard. It's almost as if Air NZ decided that it would be a fantastic idea to buy AN - run it into the ground and have to write off over 1.2 billion dollars of their own money.
All the employees will get every dollar they are entitled to. This is because they are the top priority so far as creditors go, and the government has been collecting money from the travelling public to make up any shortfall in the entitlements. It is almost as if the employees have the monopoly on being disadvantaged by the collapse. Whilst I do feel for the people who are now unemployed they could be much worse off.
The company I work for was owed money by Ansett - and is unlikely to ever see a cent of this money. There is the chance that this lost money for services redered could force someone to be made redundant. As it's a small business there is no redundancy pay - so it reasonably forseeable that someone could loose their job as a direct result of the AN collapse and all they are entitled to is two weeks notice and any outstanding holiday pay (without the 17% loading).
I'm sorry but the union should quit spreading lies and concentrate on helping its members find new jobs.
Don't get me wrong - I'm as sad as the rest of you that AN is no more ... and I can only imagine what it must be like to loose one's job after years of loyal service - but perhaps it is time for the union and it's members to stop spreading lies.
Best Regards
Bradley