Revived Ansett vital to Air NZ

By DANIEL RIORDAN

Air New Zealand is expected to waste no time rekindling its relationship with former subsidiary Ansett once the Australian carrier's new ownership details are sorted.

But Singapore Airlines, whose refusal to invest more money in Air NZ accelerated the original Ansett's collapse, is likely to take its time before cuddling up to the Australians.

Renewed focus on the airlines' intentions has been sparked by the tentative rescue deal reached last Thursday between Ansett's administrators and Australian businessmen Solomon Lew and Lindsay Fox.

The pair struck a $A3.6 billion ($4.4 billion) deal to buy Ansett, which has been in voluntary administration since being cast adrift by Air NZ two months ago.

Ansett administrator Mark Mentha is due to meet Prime Minister John Howard tomorrow to discuss the support the failed airline needs to keep flying.

Mr Mentha said yesterday the sale was dependent on the Australian Government providing $A195 million for severance costs.

Analysts say the importance of Air NZ and Ansett to each other is stronger than ever.

The big winner from Ansett's collapse has been Qantas, which domestically has reaped benefits outweighing the impact of the downturn in its international operations.

Macquarie Equities senior analyst Arthur Lim said that for Ansett to succeed it needed to capitalise on its Star Alliance membership and especially feeder traffic from Air NZ.

Air NZ's need for feeder traffic from Ansett is just as great. The loss of such traffic has cost it dearly in recent months.

Qantas is a member of the rival Oneworld alliance.

Air NZ spokesman Cameron Hill said it was too early for Air NZ to be talking to Ansett. "When they have a status, we'll obviously be having a very close look at it."

Although the resumption of operational links between Air NZ and Ansett seems inevitable, any move by Singapore Airlines (SIA) to take a stake in Ansett is less certain.

Mr Lim said Singapore would be in no hurry. Like airlines around the world, the carrier was busy coping with the global aviation downturn exacerbated by the September 11 terrorist attacks

"There's a certain rationale to SIA letting Ansett's risks be taken by Lew and Fox, then maybe a couple of years down the track [it] could come in and enjoy the upside."

SIA has given no indication of its intentions, but Mr Fox said approaches had been made to the airline with the potential for it to take an equity interest.

The Ansett sale package includes a $A1.1 billion cash and debt reduction package for the airline's administrators and a $A2.5 billion commitment to purchase 29 new A320 Airbus aircraft.

The agreement requires the approval of Ansett creditors next month and the ratification of the Federal Court as well as the support of the federal Government.

All parties are expected to support the proposal, and the airline would be transferred to the Fox-Lew syndicate (Tesna) on January 31 next year.

* On Friday, SIA said it was deferring the delivery dates of 10 Airbus A340-500 aircraft, intended to fly between Singapore and the west coast of the United States.

Delivery of the first plane, which had been due in January 2003, is now planned for October 2003. The remaining four planes on firm order will be delivered by March 2004. The five aircraft on option will be delivered between April 2005 and April 2006.

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