Ansett fallout hits everything from jobs to banks

By GREG ANSLEY

CANBERRA - Australia was yesterday trying to assess the fallout from the potential loss of Ansett Airlines as Air New Zealand's board placed the company in administration.

A proposal for a management buy out was floated late yesterday, but there were few hopes that a huge shedding of assets and jobs could be averted.

The shockwaves have started racing through the economy, with the National Australia Bank suffering from its exposure to Air NZ and Ansett, AMP Henderson Airports Fund dropping its $A520 million ($627 million) airport float, and a huge expected markdown in the value of the soon-to-be-sold Sydney airport.

With about 80 per cent of Sydney airport's revenue earned from Qantas and Ansett, Ansett's collapse would hit both cash flows and sale value.

It would also leave large question marks about the future of Ansett terminals and facilities.

If Ansett is liquidated its terminals will revert to the various airport corporations, with their value determined purely by the interest shown by other airlines.

Because of their size and design, they are considered unlikely to attract Virgin Blue or any other similar airline.

The tourism industry also fears serious losses in key markets if Ansett crashes.

Sports and arts organisations face the loss of millions of dollars in sponsorships and the sudden reduction in capacity on major east coast routes may cause large-scale disruptions to business and personal travel and open the door to fare price rises.

Ansett, with about 40 per cent of the market, carries about 4.5 million passengers a year on domestic routes.

Businesses also face potential problems with future air travel, especially at peak times, although Virgin Blue is expected to step into the gap.

But Qantas stands to pick up most of the corporate and institutional accounts it does not already own, guaranteeing its revenue base for years to come and creating an almost impregnable citadel against newcomers.

At immediate risk are the 16,000 people directly employed by Ansett and a similar number whose jobs depend on flow-on contracts and work, as well as companies ranging from catering to transport.

There are some prospects that Ansett's regional subsidiaries - Hazelton, Kendall and Aeropelican in the east and Skwest in Western Australia - could be sold as going concerns, possibly as an effective add-on to Qantas. Ansett's subsidiary Traveland could also be sold, possibly to a rival such as Flight Centre.

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