Sydney view: Full aircraft mock Ansett's demise

By GILES PARKINSON

A great irony hung amid the tears that greeted the arrival of the last Ansett flight in Sydney on Tuesday and the demise of one of Australia's great corporate brands - the airline died in the black.

Over the last week of its 66-year existence, Ansett actually made a profit. Not much of one, but the demand caused by the Melbourne Grand Prix, the Sydney Mardi Gras and the Brisbane Commonwealth Heads of Government meeting had filled aircraft to capacity.

That will be no consolation to the 16,000 employees who have lost their jobs, and those countless others who will lose theirs because of the knock-on effects of an inevitable decline in tourism.

Nor can it be of comfort to the parade of managers and financiers who might, in their more reflective moments, wonder if their own incompetence may have contributed to destroying what was once one of the most powerful brands in the country.

Australian newspapers in the past few days have been full of stories on how various parties have sought to lay the blame for the failure of the rescue plan by the Lindsay Fox/Solomon Lew syndicate, Tesna Holdings.

Those deemed responsible, in no particular order, are the Government, the New Zealand Government, unions, Fox and Lew, the owners of capital city airports, and the administrators themselves.

The sad fact is that once Air New Zealand had placed the company into administration last September, Ansett had no future. It cobbled together enough funds to mount a skeleton operation, but this was losing money - A$6 million ($7.3 million) a week until the last few days.

Fox and Lew are intuitive businessmen. They would have noted that the airline industry as a whole has not made a cent since its inception, if you total all the profits and losses together.

It would have been hard to make a buck, and they were not prepared to risk their own money.

Qantas, which less than a year ago warned of a dominant Singapore Airlines, has built an impregnable position of its own, and Sir Richard Branson has cleverly created a low-cost airline that would easily have outmanoeuvred the lumbering Ansett.

So what happened to the A$1.2 billion ($1.5 billion) that Air NZ paid for Ansett? News Corp pocketed the cash, but the airline's valuation officially disappeared last year when Air NZ wrote off the value of the investment.

This week, it reappeared.

Since Tesna announced that its purchase would not go ahead, the market has added about A$750 million ($918 million) to the market capitalisation of Qantas, and analysts have added around A$500 million ($612 million) to their estimated value of Virgin Blue. The financial markets have nothing if not a wonderful sense of symmetry.

I T WILL be interesting to see what the Australian Competition and Consumer Commission makes of the programming deal between Optus and Foxtel this week.

The agreement, struck with the help of Foxtel shareholders Telstra, Kerry Packer and Rupert Murdoch, is designed with one thing in mind: to put an end to the hundreds of millions of losses that have plagued the Australian pay-TV industry since its inception in the mid-1990s.

Commission chairman Allan Fels may smell an anti-competitive rat, but he is likely to be powerless to intervene - as he found in the domestic airline industry.

Nevertheless, he is not likely to be as meek in attitude as Communications Minister Richard Alston, who had this to say about the deal on Tuesday: "At least consumers won't have to make that awful decision about which service to sub-scribe to."

Just as well he is not rewriting the constitution.