Suitor for Ansett stays a Virgin

By DANIEL RIORDAN and REUTERS

SYDNEY - Unions and administrators of failed carrier Ansett shrugged off a late offer from Virgin Blue and Lang Corp for the airline yesterday, concentrating instead on Solomon Lew and Lindsay Fox's bid.

Sources close to the talks said the Virgin Blue-Lang deal realistically stood a chance only if the two Melbourne millionaires withdrew their $A3.6 billion ($4.5 billion) plan, under which a revamped Ansett will fly Australia's main trunk routes with a fleet of 29 Airbus planes.

Administrators Mark Mentha and Mark Korda from Andersen met Virgin Blue chief executive Brett Godfrey and Lang Corp chairman Chris Corrigan, but emphasised they have already sold the airline to Mr Fox and Mr Lew's Tesna consortium.

"It should be emphasised that there has been no bid from Lang Corp and Virgin Blue, merely an expression of interest in certain assets," Mr Korda said.

"The airline has been sold, subject to a number of conditions. If those conditions are not met, then we might be in a position to deal with Lang Corp."

Lang, a logistics group, stepped into the $A10 billion Australian aviation market on Sunday when it launched a bid to buy control of Richard Branson's discount carrier for up to $A300 million, conditional on buying some of Ansett's assets.

That proposal would provide work for about 1500 of Ansett's 16,000 original employees, compared to around 4000 under the Fox/Lew Tesna bid launched last month.

Both unions and the administrators said no further meetings were planned with Virgin Blue/Lang.

"It's full steam ahead for the Fox/Lew sale, which is to be completed by the end of January," a spokesman for the Australian Council of Trade Unions said.

"Of course we would be interested in proposals that can maximise the number of jobs and can guarantee 100 per cent payment of employee entitlements to anyone who loses their job," he said.

Virgin Blue, which would use the Lang capital injection to ramp up its discount operation, said it had requested more information from the administrators and was certain its proposal would ensure the long-term sustainability of Ansett.

"It's not just who's promising the most jobs, but who's promising the most jobs that are sustainable in the long run," a spokesman said.

The Australian Government said it continued to work on two outstanding issues related to the Fox/Lew bid, namely a voluntary agreement with Qantas on competition and the issue of Government travel contracts.



* If Lang Corp takes a majority stake in Virgin Blue it might ease the airline's entry into New Zealand.

One of the potential obstacles to Virgin Blue's flying here is its ownership outside of Australasia by Sir Richard Branson.

The airline still wants to fly here, but has pushed its timeframe out to the end of next year.

Virgin Blue commercial head David Huttner paid Transport Minister Mark Gosche what both parties termed a "courtesy visit" yesterday.

"We are still looking long-term," Mr Huttner told the Business Herald. "We want to make sure we fulfil any requirements of the NZ Government and Transport Ministry."

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