Joy as Ansett gets lift off

SYDNEY - Ansett took to the air again today two weeks after its collapse, an anorexic version of what used to be Australia's second domestic airline with just five planes flying.

Only a third of seats on the first 24 flights scheduled for the weekend between Australia's two main cities, Sydney and Melbourne, were booked despite steep discounts but Ansett Mark II said it was not concerned about posting an initial loss.

"The early flights are very full, which says to us that the business traveller is back to Ansett," Mark Mentha of administrators Andersen told Australian Broadcasting Corp radio.

As recriminations continued to swirl around the abandonment of Ansett by its parent Air New Zealand, the Australian Financial Review reported that Prime Minister John Howard "ruthlessly" scuppered a plan that might have saved it.

The newspaper said Howard, who is expected to call a general election any day now, overrode senior ministers who were in favour of an offer put forward by Singapore Airlines to recapitalise Air NZ and its troubled Australian subsidiary.

Determined that the domestic air industry should be kept in Australian hands, Howard bowed to lobbying from the national carrier Qantas Airways, which feared that Singapore Airlines would have the clout to muscle it out.

Singapore Airlines had proposed increasing its 25 per cent stake in Air NZ and pumping money into loss-making Ansett.

Qantas came up with an alternative plan to take over SIA's stake in Air New Zealand and in return allow the Singaporeans to swallow Ansett, which had been floored by high fuel prices, fierce competition and a need for a US$2 billion fleet upgrade.

Singapore Airlines eventually lost patience waiting for the Australian and New Zealand governments to approve its plan.

"The PM's intervention helped seal Ansett's fate," the Australian Financial Review said.

It said Treasurer Peter Costello was "incandescent with rage" at Howard's decision to back Qantas and that the prime minister's department head Max Moore-Wilton told Air NZ chief executive Gary Toomey that he was not concerned about Ansett.

There was no immediate comment from the government, which has repeatedly rejected any responsibility for the collapse of the airline that once controlled 40 per cent of domestic air travel.

Ansett's tentative return to the airways was greeted with fanfare and celebrations among its 16,000 staff, around 1,500 of whom were expected to be reemployed.

The first flight with 144 passengers took off from Sydney after passing under an arch of water sprayed by airport firetrucks.

Pilots and flight attendants greeted passengers at the Ansett terminal, a mere shadow of its former busy self, with applause and carried their bags to the check in counters. Staff carried banners reading: "Ansett, glad to be back".

"Mate, this is the best feeling," said an Ansett mechanic who had been with the company for 12 years.

If all goes well, another six aircraft will join the first five back in the air over the next two weeks.

The government has underwritten Ansett's tickets till the end of the year, guaranteeing to passengers that should the airline fold again, they will get their money back.

- REUTERS

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