Airlines move to salvage alliances

By GREG ANSLEY

CANBERRA - Ansett is likely to resume commercial arrangements with Air New Zealand as both airlines scramble to survive after the Australian company's collapse and the global aviation crisis.

Air NZ acting chairman Jim Farmer said the airline had agreed, in conjunction with Singapore, to provide management assistance for Ansett's restructure.

New links will also be formed with Singapore Airlines - which will be approached for management help by the Ansett administrators - as pressure mounts to secure the southern flank of the Star Alliance.

At immediate risk is the loss of Star associate United Airlines, whose withdrawal from the transpacific market because of the loss of an Australian feed would be a severe blow for Australia and New Zealand.

Ansett is now back in the air with a reduced fleet of Airbuses that is scheduled to expand from six to 11 by Monday on routes between Sydney, Melbourne, Perth and Brisbane.

Although more than 23,000 bookings have been made since Ansett jets were put back in the air, pushed by cut-price fares as low as $99 between Sydney and Melbourne, many flights have carried few passengers and break-even loadings have yet to be achieved.

Ansett administrators are aiming for 20 per cent of the market.

Five potential buyers have yet to place a formal bid for an airline that is expected to operate at least 20 Airbus-320 airliners.

Analysts said yesterday that Ansett's ability to re-establish links with Air New Zealand and Singapore would be crucial to its survival,

Peter Harbison, director of the Centre for Asia Pacific Aviation, said there were clear benefits for new arrangements between the three Star Alliance partners.

"Putting all the other stuff aside, the logic commercially is for Ansett and Air NZ to be getting together as quickly as possible because they will both gain a lot from it," he said.

"There are a lot of other wheels on this wagon that could fall off.

"You've got United, which is hanging on probably in a rather fragile way on the Pacific route, which is very important for New Zealand tourism, and for Australia for that matter.

"To a large extent they rely on being able to share their risk and to generate additional revenues by getting New Zealand and Australian feed and code share.

"It's not just a matter of what we can gain ... It's a matter of if we don't do this we could lose a lot more."

Although Mr Harbison said he doubted if any Star member was ready to pump cash into Ansett, the alliance could help in other ways to keep the airline alive.

He said a number of alliance members had a vested interest in Ansett's survival and could, for example, continue to commit valuable coach share and feed traffic.

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