Fight to rescue troubled Aussie airline

Ansett, Australia’s second largest airline, has been beset by mounting adverse economic conditions and is now unable to pay creditors and suppliers.

Air New Zealand, the airline’s owner, is trying to clinch a deal with a second potential buyer after Qantas Airline and the Australian government rejected a proposed rescue package.

Peter Costello, the Australian government’s treasurer, has urged banks owed money by Ansett, including Commonwealth Bank of Australia and National Australia Bank, not to move in on the airline until PwC has had time to fully examine Ansett’s books, according to reports.

But PwC administrator Peter Hedge said: ‘I feel a bit like Old Mother Hubbard.’

‘On Wednesday night I went to the cupboard and there was nothing there,’ he told the Australian Broadcasting Corporation.

The Australian government is facing a political crisis over the fate of Ansett’s employees. According to August results from the Australian Bureau of Statistics, the country lost more full-time jobs in July than in any single month for 23 years.

Qantas, the nation’s biggest airline, revealed a 20% drop in profits in the year to June, plagued by high fuel costs, a weak currency and tough local price competition.

It had been expected that Quantas would buy Ansett giving it a 90% market share in Australia. Under normal circumstances competition rules would not have permitted the take-over, but with rising job losses regulators saw no other alternative.

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