Air NZ agrees to sell Ansett flights

By Phil Boeyen, ShareChat Business News Editor

Tuesday 13th November 2001

Air New Zealand (NZSE: AIRVA) is rekindling its association with jettisoned airline Ansett this week after signing an agreement to sell services on the new discount carrier Ansett Mark II.

Ansett Mark II is being run as a low-cost airline and will only offer one class of cabin and no catering apart from water. In-flight entertainment is limited.

The reborn Ansett will initially fly between Melbourne, Sydney, Adelaide, Brisbane, Perth, and Hobart.

Wealthy Australian businessmen Solomon Lew and Lindsay Fox have set up a syndicate to run the new Ansett and have asked the Australian government for help to the tune of A$600 million in cash, subsidies and tax assistance.

Re-elected Australian Prime Minister, John Howard, has ruled out taking an equity stake in the airline but the Sydney Morning Herald reported he is keen to help out in some way.

The newspaper also says that Mr Howard wants the staff of the new airline to have "realistic" wages and work practices, citing the previous airline's overly-generous work conditions as part of the reason for its demise.

Air New Zealand dumped Ansett Australia in September as it fought for its own fiscal life, eventually receiving a $900 million tax-payer funded bail-out to stay in business.

In its 2001 accounts Air NZ wrote down its investment in Ansett by $1.32 billion.

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