Merger axe falls on Ansett top brass

By GEOFFREY THOMAS and GEOFF SENESCALL

A big upheaval in the management of Air NZ and Ansett Australia is expected tomorrow, after Singapore Airlines yesterday sealed the acquisition of 25 per cent of the Auckland-based airline.

According to Australian sources, high on the list of casualties are senior Ansett Australia executives, of whom 13 of 15 are believed to be going.

Sources close to Singapore Airlines, which gets three of Air New Zealand's 14 board seats, say the airline was not privy to the process.

The management shakeout comes as Air New Zealand, which earlier this year took full control of Ansett, tries to sharpen its competitive edge and expand Ansett International.

If Air New Zealand's major shareholder, Brierley Investments, is to get a further $95 million from the $285 million sale of its 16.7 per cent stake to Singapore Airlines, it must drive the earnings of the airline to $2.1 billion by next June.

Coupled with the management push, Air New Zealand is also looking for a new chief executive to replace Jim McCrea, who left early last month.

One of the names the market is speculating about is Tony Tyler, Cathay Pacific Airway's director for corporate planning.

Several other Cathay executives are also said to be on the list, as is the former chief executive of Australian Airlines, John Schaap, who was recently appointed to the top job at Burswood Casino in Australia.

Auckland analysts say executives from both Air New Zealand and Ansett Australia will lose their positions, with a new joint executive team being sourced from both airlines.

Air NZ's Andrew Miller, who heads the airline's domestic operations, is tipped to take over at Ansett from interim chief executive Craig Wallace.

Singapore's three seats on the Air NZ board will be taken by deputy chairman Dr Cheong Choong Kong, executive vice-president (commercial) Michael Tan and ANZ chairman Charles Goode, who is also a director of Singapore Airlines.

Ansett's international arm offers the greatest growth potential, with route approvals to provide more competition to Qantas considered a formality.

The most urgent matters are Ansett's sagging domestic market share, which sits at 43 per cent ,and the rapid buildup of Ansett International with more 747s.

Qantas has been able to increase its market share on domestic routes to 57 per cent because of its aggressive competitive edge and greater flexibility with its bigger fleet.

Ansett International pilots have been briefed on a growth strategy that would see the airline lease another dozen 747s over the next five years from Singapore.

Applications have been made to fly daily flights from Sydney to Tokyo and Melbourne to Hong Kong.