No profit for Ansett in Australian market

MELBOURNE - Air New Zealand-owned Ansett Australia is making no money in the Australian market because of a sharp increase in costs and airfare wars, a senior Ansett executive said yesterday.

"I can tell you that our group is not making any money at all domestically in this marketplace," said Ansett Australia's sales vice-president, Norm Thompson.

"Yields are down 20 per cent and our costs are up significantly," he told a travel industry conference in Melbourne.

The earnings of Ansett and Australia's biggest airline, Qantas Airways, have been hit by intense competition from cut price carriers, soaring costs and the sliding Australian dollar.

Aggravating its woes, Ansett suffered a public relations crisis last month when Australia's air safety regulator grounded all 10 of its Boeing 767s and at one stage threatened to consider shutting the airline down.

All of the 767s were cleared to fly again this week, and Ansett launched an intensive advertising campaign to prevent erosion of its 42 per cent market share.

The carrier rebutted media reports yesterday suggesting Qantas may have grabbed up to 20 per cent of its passengers on some routes after Ansett's 767 fleet was grounded.

The Age newspaper reported that one of Australia's biggest travel agencies, Flight Centre, said its April sales figures showed Ansett's sales were around 10 per cent down on last year as passengers opted for Qantas or cut-price rival Virgin Blue.

"We have evidence and results that are as fresh as today, that we did not lose any passenger support in April and we actually saw an increase in April demand for Ansett's domestic services from last year," an Ansett spokeswoman said.

"Our sales figures for April and forward bookings contradict any claims we've lost customers to other airlines," she said.

In its gloves-off campaign, Ansett has also said it would press the Competition and Consumer Commission and consider court action to block Qantas' planned takeover of no-frills Impulse Airlines.

- REUTERS

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