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The story
Beginning
The company was founded by Reginald "Reg" Ansett in 1935 as Ansett Airways Pty Ltd. This was an offshoot of his road transport business, which had become so successful it was threatening the freight and passenger revenue of Victorian Railways. This led the state government to legislate to put private road transport operators out of business. Reg Ansett countered by establishing an airline, as aviation was under control of the federal government and beyond the reach of the state government.
Ansett's first route between Hamilton and Melbourne operated by a Fokker Universal monoplane commenced on 17 February 1936. The rapid success of the airline led Ansett to float the business in 1937. As the route network expanded, Ansett Airways imported Lockheed Electra aircraft. During World War II, Ansett opted to suspend all scheduled services, except the Hamilton service, in favour of more lucrative work for the United States Army Air Forces. After the war, Ansett battled to re-establish his domestic routes using war-surplus Douglas DC-3s, converted from C-47s and the remaining Lockheed Electras.
At this time, the Australian domestic airline travel sector was dominated by Australian National Airways (ANA), established in 1936 by a consortium of British-financed Australian shipowners. The Chifley federal government was determined to establish a state-owned airline to operate all domestic and international services. It was eventually thwarted in this aim by the High Court of Australia, so it established Trans-Australia Airlines (TAA) to operate in competition with ANA.
Towards a duopoly
Ansett Airways remained a big player as ANA and TAA battled for supremacy in the 1940s and 1950s. Ansett operated around the big two, maintaining budget-fare interstate operations with DC-3s and later Convair CV-340s previously operated by Braniff International Airways in the United States. The airline was backed up by extensive road transport operations, including Ansett Freight Express and Ansett Pioneer Coaches, as well as the Ansair coach-building operation.
The Menzies government, while supporting TAA, because of the excellent dividends it paid to the government, wanted to avoid TAA having a monopoly on domestic services if ANA collapsed, as seemed likely. The only alternative, as it transpired, was for Ansett to buy the ANA operation. Ansett's bid had a number of financial supporters, most prominent of these being the Shell Oil Company. Douglas Aircraft Company was also concerned about ANA's demise, as TAA had ceased to be a customer for their aircraft. The ANA directors fiercely resisted this initially, but in October 1957, succumbed to Ansett's offer of £3.3 million for their airline. The new entity was called Ansett-ANA, the name it retained until 1 November 1968, when it became Ansett Airlines of Australia.
Ansett-ANA's excellent profit record was, at least in part, courtesy of the Menzies government's Two Airlines Policy that limited competition. The policy effectively blocked any other domestic interstate operators by way of a ban on importation of aircraft without a government licence. From 1957 until the 1980s, under the strict rules set down by the Two Airlines Policy, Ansett and TAA operated as virtual carbon copies of each other, operating the same aircraft at the same times, to the same destinations, at fares, which were identical (under strict federal government policy). If either airline wished to change its fares, they had to obtain federal government approval.
Reg Ansett then set out to ensure no other competitors could rise up to challenge his airline. He took control of Adelaide-based Guinea Airways (renamed Airlines of South Australia) and Sydney-based Butler Air Transport (renamed Airlines of New South Wales). The takeover of Butler was achieved with covert support from the Menzies government and by Ansett engineering his employees' purchases of Butler shares (in a similar way as had just been attempted by Butler). He then flew the employees to a general meeting in Sydney and forced a vote in favour of selling out to Ansett. Ansett later purchased Perth-based MacRobertson Miller Airlines, buying 70% of the shares in 1963 and completing the takeover in November 1968. Unlike Ansett's other regional acquisitions MMA retained its own identity (aircraft flew in Ansett livery but with MMA logotypes) for many years, finally becoming Airlines of Western Australia in 1981.
Following the takeover of ANA, Reg Ansett lobbied the government to block TAA's purchase of Sud Aviation Caravelle jet aircraft. He was concerned about his airline's ability to finance equivalent jet aircraft, and the major engineering leap required to go from an all-piston fleet direct to pure jet aircraft, TAA had been operating prop-jet Vickers Viscounts since 1954, so had expertise in jet technology. Ansett was successful in convincing the government to authorise the importation of more Viscounts and the new Lockheed L-188 Electra, marketed as the "Golden Jet" as with other turboprop airliners of the day. This action delayed the introduction of pure jet aircraft to Australian domestic airlines until 1964, when the Boeing 727-100 "Fan Jet" began flying. In keeping with the Two Airlines Policy, both TAA and Ansett started domestic jet services with the 727 on the same date (October 16), at the same time, on the same route (Sydney to Melbourne). However Ansett won a draw to be the first to land, thus becoming the airline to officially inaugurate jet operations to Australian domestic aviation, seven years after Reg Ansett had moved to block TAA's attempt to first purchase jet airliners.
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An unusual feature of Ansett's operations was the flying-boat service from Rose Bay in Sydney to Lord Howe Island. This was operated by Ansett Flying Boat Services using Short Sandringham four-engined aircraft. The service ceased in 1974 when the Lord Howe Island Airport was completed.
Unification, deregulation and expansion
Ansett lost control of the company to Peter Abeles' TNT and Rupert Murdoch's News Corporation in 1979, with Abeles taking operational control of the airline. The airline prospered in the 1980s, and its various operating divisions were progressively unified both operationally and in terms of corporate identity. Following the change of ownership, Ansett introduced a new livery designed by Landor Associates, featuring plain white fuselages, simple Ansett logotypes in a serif typeface and a blue tailfin with a stylised Southern Cross logo. Through the mid-1980s, this livery was rolled out to the regional parts of the Ansett system which were also rebranded as the new colours were rolled out, becoming Ansett NSW, Ansett NT, Ansett WA etc..
The Southern Cross livery first appeared on newly purchased long-range versions of the Boeing 727-200, capable of direct flights between Sydney and Perth. Ansett's new owners placed multiple orders for new aircraft in the 1980s, buoyed up by strong business year-on-year and the passing of the Airlines Agreement Act of 1981 which maintained the closely regulated domestic airline system in Australia until at least the end of the decade, thus ensuring Ansett Transport Industries' profits for the foreseeable future. New Boeing 737s and five of the newly introduced Boeing 767 were purchased – the latter to a unique specification retaining a flight engineer in the cockpit by agreement with Ansett's crew unions. Despite being an existing operator of the Boeing 737 (and long-standing Boeing customer in general), Ansett placed an order worth over $1 billion in 1985 for the Airbus A320, which gradually replaced the 727s in the late 1980s/early 1990s and were branded by the airline as the 'Skystar'. Two years later Ansett ordered 21 new Boeing 737s (in -300 and -500 form) to phase out the older 737 models.
This diverse fleet of similar aircraft from different manufacturers was unusual in the airline industry. The new Boeing 767s were also beset by mechanical and maintenance issues, leading them to be out of service during several key periods of heavy traffic and operating for the airline at a loss. These issues were further reflected in Ansett's regional operations which had a wide range of regional airliners of piston-, turboprop and jet-power types. Many of these were only operated in small numbers, adding to crew, training and maintenance costs and several key types were approaching 15 or 20 years old. This incurred increased costs to Ansett. In 1985, the same year the Airbus order was placed, Ansett became a launch customer for the Fokker 50 turboprop, ordering ten aircraft with a view to replacing its successful but ageing fleet of Fokker F27s. Ansett also ordered a total of 11 British Aerospace 146s, which gradually replaced Fokker F28 Fellowship jets from 1990.
In addition to these heavy spending costs on fleet renewal, a number of substantial investments performed badly, including a share in the US America West Airlines (which filed for bankruptcy and survived) and its Hamilton Island resort (which went into receivership). In 1984, Ansett along with TAA was embroiled in controversy after it banned HIV-positive individuals from travelling on their planes to protect their staff. The Australian Flight Attendants Association ultimately rejected the bans.
In October 1987, the federal government gave Ansett and TAA the three years' notice required to terminate the Airlines Agreement, with effect from 31 October 1990. This deregulated the airline industry in Australia and exposed Ansett to direct competition for the first time. Ansett had anticipated this change and in July of that year had acquired East-West Airlines, a regional airline that had gradually expanded from its origins in New South Wales to become an inter-state operator. East-West had circumvented the regulations of the Two Airlines Policy by flying between the regulated state capitals via smaller intermediate airports, allowing it both offer a denser and more accessible service pattern and much lower fares than the ones set by regulation charged by Ansett and TAA. East-West had become Ansett's main competitor in many of its regional services and the airline's growth played a large part in the successful campaign to overturn the Two Airlines Policy. In preparation for deregulation East-West's owners sold the company but within weeks the new owner, Stan Perron, sold the airline to Ansett. At this stage the East-West brand was retained, but with an updated livery.
Similar deregulation of the airline industry had been introduced in New Zealand in the late 1980s, and Ansett pursued this opportunity to expand its operations internationally. In 1987 Ansett entered into an agreement with the owners of the struggling New Zealand domestic airline Newmans Air which saw Ansett Transport Industries take on a 50 per cent stake in a recapitalised and expanded company renamed Ansett New Zealand. Ansett NZ adopted the same white Landor livery as its parent company, but with the four red stars of the New Zealand flag on the tail in place of the six white ones (as per the flag of Australia) on the Ansett livery, and therefore also lacking the green and orange 'speed stripes' on the tail.
In its own preparation for the new deregulated industry, Ansett rebranded itself in mid-1990, taking on the name Ansett Australia and adopting a new livery with the Australian flag on the tail. This change also saw the end of the East-West name, being replaced by 'Ansett Express', which was adopted for the short-haul and commuter services in New South Wales formerly operated by Ansett NSW and East-West. This rebranding also followed a period of debt restructuring and by the start of 1994 the company was reported to be back to making an operating profit. By this point all the regional branding had been dropped, with all aircraft carrying the same Ansett scheme, and a new tail logo called the 'Starmark' (combining the Southern Cross of the previous livery, the blue of the flag livery and a stylised 'A' as a nod to Ansett's 1960s scheme) had been introduced. This final change also saw the withdrawal of the Ansett Express branding, with these services now being flown under the corporate Ansett Australia title.
The deregulation of the industry also opened up possibilities for Ansett to move into international flights for the first time. On 11 September 1993, the first international Ansett flight was made to Bali using a Boeing 767. To further expand its international operations, Ansett Australia leased a pair of Boeing 747-300s from Singapore Airlines in August 1994 to inaugurate services to Osaka and Hong Kong. Two more B747s were leased from Singapore Airlines the next year to enable services to Jakarta in January 1996 and to Shanghai in the summer of 1997. Ansett branded its B747s as 'Spaceships'.
In 1996 a consortium led by Ansett, with five international partner airlines, defeated Qantas in the bidding to become official airline of the Sydney 2000 Olympics. Ansett spent an estimated A$60 million on Olympic-related sponsorship, advertising and free travel, but was hit by what the business magazine BRW described as a successful ambush marketing campaign by Qantas. Ansett saw this tie-in as a key marketing opportunity to expand its presence in southern and eastern Asia. Five Boeing 747-400s were leased (four dry leased from Singapore Airlines and one wet leased from Qantas) to add further services and new routes to Seoul, Taipei, and Kuala Lumpur. The aircraft were branded with 'Sydney 2000' livery. Neither the Olympic Games nor the new routes generated the expected traffic, and several of these new routes were withdrawn shortly after the Games concluded. This destabilised the finances of the company considerably, in tandem with other industrial and internal factors (see below) right before the September 11 attacks affected the global airline industry and economy.
Air New Zealand's entry (1994–1996)
Ansett had expanded into New Zealand in 1987 through its subsidiary Ansett New Zealand after the government of New Zealand opened its skies to the airline. Under a memorandum of understanding signed by the two governments in 1992, a single trans-Tasman aviation market was to be completed on 1 November 1994, when Air New Zealand would have gained the right to operate domestic services within Australia. A week before that date the Keating government withdrew the domestic rights; a Parliamentary Library chronology later recorded that this was done "reportedly to increase the value of shares in the float of Qantas". According to The Australian Financial Review, the decision followed a meeting at which the Qantas chairman, Gary Pemberton, showed the transport minister, Laurie Brereton, internal projections of the damage Air New Zealand's entry would do to the government's planned float of Qantas; the newspaper reported that concerns about the float and about Ansett's commercial future were paramount in the decision. The government indicated that Air New Zealand should instead seek an alliance with Ansett if it wanted wider rights.
Air New Zealand's negotiations to buy into Ansett began in late 1994 and lasted some 20 months. Qantas, which then owned almost 20% of Air New Zealand, opposed the transaction. Its chairman urged the Australian government to limit Air New Zealand's holding in Ansett to 25%, and at hearings of New Zealand's Commerce Commission Air New Zealand accused Qantas of trying to undermine the deal, its counsel describing Qantas's opposition as "a cynical exercise of self-preservation against the effects of competition". In April 1996 the Commerce Commission rejected the deal because it would have given Air New Zealand an interest in its domestic rival, Ansett New Zealand. It cleared a revised deal in June 1996 on condition that News Limited buy all of Ansett New Zealand, so that Air New Zealand would have no stake in it. The federal Treasurer, Peter Costello, approved the purchase in September 1996 on condition that Ansett International remained substantially Australian-owned and controlled, and 51% of Ansett International was sold to Australian institutional investors.
Air New Zealand completed its purchase of TNT's 50% stake on 1 October 1996. It paid TNT A$325 million and committed a further A$150 million of new capital to Ansett, a total of A$475 million, while News Corporation retained the executive chairmanship and effective management control. Qantas sold its own shareholding in Air New Zealand in March 1997.
Full ownership (1999–2000)
In March 1999 Singapore Airlines agreed in principle to buy News Corporation's half of Ansett for about A$500 million, but Air New Zealand, which held a pre-emptive right over the shares, refused to waive it, and News broke off the sale talks in June 1999. On 18 February 2000 News instead agreed to sell its stake to Air New Zealand for A$580 million in cash plus a deferred payment then valued at about A$100 million, a total of about A$680 million. The purchase, which also required the foreign ownership limit for Australian international airlines to be raised from 25% to 49% so that Air New Zealand could hold 49% of Ansett International, was completed on 23 June 2000, giving Air New Zealand full ownership of Ansett.
While the purchase was pending, Qantas sought in March 2000 to buy Brierley Investments' 47% stake in Air New Zealand, a move that would have required Air New Zealand to sell its interest in Ansett; Brierley instead chose Singapore Airlines as Air New Zealand's strategic partner. In April 2000 Singapore Airlines bought 25% of Air New Zealand, the maximum then permitted for a single foreign airline. Air New Zealand's acting chairman, Jim Farmer, later acknowledged that it had carried out only "extremely limited" due diligence before moving to full ownership of Ansett.
Decline (2000–2001)
After the takeover Ansett was unable to fund urgently needed new aircraft and lost market share to Qantas and to new low-cost competitors. Its share of the domestic business travel market fell to 42–43% in 2000, from about 54–55% three years earlier. In 2000 two low-cost carriers, Impulse Airlines and Virgin Blue, began competing on the main routes between Sydney, Melbourne and Brisbane, setting off a fare war in which Qantas and Ansett cut fares heavily. Late in 2000 Ansett and Qantas contested a takeover of the regional airline Hazelton Airlines; Qantas withdrew in January 2001 after the Australian Competition and Consumer Commission (ACCC) opposed both bids, and some observers believed that it had entered the contest partly to force up the price Ansett would pay. Ansett, which continued to seek the commission's approval, completed the purchase for more than A$20 million in March 2001. In May 2001 Impulse, after accumulating losses, contracted its aircraft and crews to Qantas.
From Wikipedia’s article on Ansett Australia, shared under CC BY-SA 4.0.4