Ansett placed in administration as workers go to court

By GREG ANSLEY

CANBERRA - Ansett planes continued to fly yesterday despite a growing conviction that nothing will now save the stricken Australian airline.

The first casualties emerged last night as catering firm Gate Gourmet stood down 800 workers and placed itself in administration.

Its general manager Eric Gadsden said Ansett owed it about $A25 million. "They were unable to give us any comfort they would be able to pay us," he said.

While unions prepared for mass rallies in Melbourne, Sydney and Brisbane today, their lawyers went before the Industrial Relations Commission to try to force Air New Zealand, the Ansett administrators and the Australian Government to guarantee $A400 million ($486 million) in employee entitlements.

Transport Minister John Anderson, himself under increasing fire for failing to save Ansett, claimed he had been misled by the Air NZ board and attacked its management of Australia's second-largest domestic airline.

"Even at this point there is still no clear picture of the true financial position that the [Air NZ] board has managed to put the outfit into," he said. "This is, to put it mildly, extremely frustrating."

Mr Anderson said his Government had been told that Air NZ and Ansett were too deeply enmeshed to be disentangled, and that a plan had been formulated to secure the airlines' future through recapitalisation and new aircraft.

"This is a million miles from what we are now learning," he said.

Mr Anderson met PricewaterhouseCoopers staff yesterday after Ansett was placed in administration following Canberra's refusal to underwrite its conversion to a discount airline.

Air NZ is considering a staff buyout bid by the Ansett Pilots' Association. It has hired financial advisers in a plan to raise an initial $A300 million and to seek potential backers. Even if the bid succeeds, the association says Ansett will still shed staff and unprofitable routes.

Air NZ has also indicated interest by other unnamed parties.

Analysts have been stretching to find potential bidders, with speculation on possible contenders ranging from Lufthansa and Emirates to Thai, United, and a consortium of Star Alliance partners.

All were considered remote, and officials were pessimistic about Ansett's chances of survival.

"I have to say to you, I don't know whether it is salvageable," Mr Anderson said.

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