Ansett flights suspended

7.00 am

The administrators of Ansett Australia announced this morning that they had "no other option" but to suspend all flight operations at the troubled airline, effective immediately.

"The decision to ground the airline group was made with great difficulty early this morning, following meetings with numerous parties, including representatives of all key unions," said Peter Hedge of PricewaterhouseCoopers.

"It is important to clarify that this action to cease flight operations is due to the lack of necessary cash or facilities to fund the operations."

The shutdown also applies to the associated airlines Ansett International, Hazelton Airlines, Kendell Airlines Pty Ltd, Skywest Airlines and Aeropelican.

"I must, however, stress that we remain in discussions with a number of interested parties regarding future operations for Ansett Airlines and other parts of the group," Mr Hedge said.

Air New Zealand, the New Zealand government and the administrator of Ansett met last night to discuss the future of Australia's second-largest airline, which has been losing $1.5 million a day.

Yesterday, Air New Zealand announced a writedown of $1.32 billion in relation to its Ansett subsidiary. The writedown contributed to a net loss of 1.425 billion after tax for the year to June 30.