The Guardian September 19, 2001

Ansett: that other calamity

by Bob Briton and Andrew Jackson

Last week was one in which a disaster threatening massive repercussions 
throughout the Australian economy might almost have gone unnoticed. 
Intermittently breaking through the blanket coverage of the terrorist 
attacks in the US were events that have had a catastrophic affect on 
Australian workers.

The collapse of Ansett Airlines saw 17,000 of its employees sacked and at 
least another 100,000 jobs threatened as the loss of the carrier impacts 
throughout the tourism industry and the wider economy.

Traveland, the wholly owned subsidiary of Ansett Holdings which employs 
750, will close unless someone picks it up in the next few days.

Another example of the knock-on effects is Gategourmet Australia, the 
caterer for the defunct airline, which employed 2000 people. It has now 
cancelled contracts with 43 other companies that supplied it with goods and 
services, and also been placed in the hands of an administrator.

Across the Tasman, thousands of workers in New Zealand are bracing 
themselves, as Ansett's former 100 percent shareholder Air New Zealand also 
now teeters on the brink.

The full extent of the largest corporate failure in Australia's history can 
only be guessed at.

As The Guardian goes to press, the Federal and State Governments are 
frantically piecing together responses to the crisis.

Ansett staff were phoned on Sunday night and asked to be "on call" for 
Monday morning, with the airline's administrator Peter Hedge, saying he 
hoped the airline would "rise like a phoenix through the ashes".

Yet as new developments unfold almost hourly, the jobs and lives of the 
workers remain uncertain.

Yet another fight for entitlements

Late last week, John Howard gave a government guarantee that all Ansett 
workers would receive their entitlements.

However, the fine print was that the offer included full annual and long 
service leave entitlements, but that redundancy pay would be capped at 
eight weeks. This would mean that workers lose out to the tune of $200 

The plan is a particular disaster for Ansett's long-term employees  a 
worker with 20 years service is entitled under their agreement to 90 weeks 
redundancy pay, a 30-year employee to 140 weeks.

ACTU President Sharan Burrow said that under these circumstances, the more 
dedicated and loyal an Ansett employee had been, the more they would be 

Ms Burrow also accused the government of double standards  when the PM's 
brother Stan Howard's National Textiles collapsed, the government paid 100 
per cent of workers' entitlements.

Workplace Relations Minister, Tony Abbott, said: "It's a comparison between 
apples and oranges".

While the body is still warm...

Last week, no other major carrier, including Qantas and Singapore (which 
had previously been barred from launching a takeover), was sufficiently 
interested at the time to pick up Ansett and its 40 per cent of the market.

Suddenly, before the body is even cold, 50 "interested parties" are 
swooping in like vultures.

Now Qantas, Virgin Blue, Singapore and whoever else is so inclined, will be 
left to pick over the carcass of the company  aircraft, terminals, its 
routes and airport slots  at bargain basement prices.

Should Qantas, as some predict, pick up the bulk of Ansett's passengers, it 
would then control 90 per cent of Australia's market. It is scandalous that 
the Federal Government should allow this happen now that Qantas has been 
privatised; yet not allow this monopoly when the Australian people owned 

Tyranny of distance restored

While Qantas has immediately taken over servicing some of the routes, it 
has committed to only picking up a fraction of the Australia-wide network 
serviced by Ansett's regional subsidiaries.

How will the hundreds of thousands of people in rural Australia now tackle 
the enormous distances from relatives, markets, education and health 
services? State governments have been closing down country rail services 
for years under the pretext that superior airline services were available.

And what of their fresh vegetable, chilled meat, fish, dairy produce and 
flower industries that service not only Australia's capital and industrial 
cities, but are exported around the world?

These will be anxious times for regional Australia with many such doubts 
hanging in the air. One thing is sure, that if such services are to be 
restored in future, they will be on monopoly terms  a private buck-making 
monopoly with no ultimate commitment according to charters or legislation 
to anyone but stakeholders in the business involved.

When in doubt, bash a foreigner!

In the absence of any serious alternatives, the only thing left 
for the morally bankrupt to do is to resort to jingoism. The 
Federal Government is very keen to attribute all the blame to the 
management of Air New Zealand. The fact that Murdoch's News Ltd 
only off-loaded its 50% stake in Ansett last year (for a cool $580 million) 
is, presumably, irrelevant.

Murdoch columnist Robert Gottliebsen has contributed the following: "If 
there is a levy, the Government should be harsh on travel to New Zealand 
given that Air New Zealand killed Ansett and dumped the body in Australia". 
This passes for serious analysis in spite of the fact that much of Air "New 
Zealand's" management is Singapore based.

What worthwhile objective can be served by further punishing people 
maintaining contacts in New Zealand, a country whose size and location make 
it as dependent on air travel as Australia?

Will New Zealand's working class then have to shoulder the huge financial 
burden of corporate losses to maintain their essential airline services?

The real purpose of this jingoism is to convince onlookers that the failure 
of Ansett is an aberration, that with shrewd management a healthy, 
profitable airline service with improving standards of service and lower 
fares can be maintained in a deregulated environment.

The message is that private ownership and market forces will meet the needs 
of the community and provide secure jobs. They hope that the overwhelming 
evidence to the contrary will be lost on this occasion in a flurry of "Kiwi 

Unfortunately, it would appear that too many sections of the organised 
working class have been persuaded to this "market forces" position. The 
trade union leaderships are certainly right to demand that Air New Zealand 
executives pay back the performance bonuses they paid themselves last year 
and to express outage at the $825,000 annual salary pulled down by chief 
executive Gary Toomey, for example.

However, it is on the broader issue of what lies behind the current crisis 
and what the demands should be to ensure employment in a stable airline 
industry, the union movement should place its long-term focus.

This whole debacle is the ultimate consequence of the "deregulation and 
competition" of the airline industry imposed on the Australian public in 

We should not forget that Australia has a proud history of public 
enterprise. Even under the old two-airline duopoly where privately owned 
Ansett flew alongside publicly owned TAA (later Qantas), there was never 
any threat to Australia's air services.

We must firmly remember that public enterprise did not fail in Australia, 
it worked very well and it was betrayed. Instead of the Australian people 
being able to enjoy the fruits of public ownership, we are paying taxes to 
subsidise private corporate losses.

It is also worth asking after HIH, OneTel and now Ansett, what will be the 
next casualty. Will it be Qantas, an electricity company or bus service? 
Our airports are being sold to the private sector. What would be the 
consequences of Sydney's or Melbourne's airports going bust?

The task before the Australian working class and which requires leadership 
from the trade unions is to halt the privatisation and to restore public 
enterprise. The airline industry is a good place to start.

The demand must be nothing less than a single, publicly owned national 
airline operating according to a charter which guarantees affordable 
services to regional Australia, optimal safety standards and secure, well 
paid employment.

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