Today, two major players dominate Australia’s aviation market. But, before the era of Qantas vs Virgin Australia, there was another major carrier in the game too. Ansett Australia was once one of the most significant carriers in Australia and the Pacific. Now defunct, they remain as a memory of aviation’s past. Let’s take a look at the rise and fall of Ansett Australia.
The early history of Ansett
Ansett Australia’s early days are mostly remembered from the time they acquired ANA – Australian National Airways. At the time, this made Ansett Australia’s largest carrier and soon they were on their way to prosperity. In the early days of turboprops, it wasn’t uncommon for ridiculously long travel times and unreliable engines. Then, in the 1960s, Ansett introduced the Boeing 727 and DC-9s. The era of turboprops had ended in favor of the jet age. These new jet aircraft made air travel more stable and reliable.
Ansett survived well into the 1990s. Then, things started to fall apart. Prior to the early 90s, Australia’s aviation market was heavily regulated by the government. The two-airline policy which granted only two airlines to operate flights on most routes ensured that Ansett Australia would be a significant force.
The Trans-Australia Airlines Museum provides an excellent timeline of Ansett’s early history.
Ansett in the 1990s
By the 1990s, Ansett was operating comparatively modern aircraft. This included Boeing 737 Classic series aircraft, Boeing 767s, and Airbus A320s. In 1990, Australian airline deregulation occurred. After this, Ansett made some severely consequential decisions. One one hand, Ansett launched Australia’s first frequent flyer program and began their own international flights. Meanwhile, Ansett lobbied heavily to become the official airline for the 2000 Olympic Games in Sydney.
Ansett also launched a co-branded credit card and became a member of Star Alliance. Essentially, Ansett was doing everything major airlines do today in an effort to boost loyalty, passenger numbers, and profits. Many airlines from Delta Air Lines to British Airways have taken similar actions which ended up well for them. So, where did Ansett go wrong?
Air New Zealand steps in
In 1996, Air New Zealand purchased a 50% stake in Ansett Australia. Outside airlines typically invest in foreign carriers as a way to build up alliances and profits. This has is also something common in today’s world. For some airlines, like Qatar, this works. For others, like Etihad, it fails.
Air New Zealand wanted a piece of Australia’s aviation market. This is understandable since the ties between New Zealand and Australia run deep. As a result, Air New Zealand, with an Ansett partnership, could essentially funnel passengers from far-reaching destinations to Australia and vice versa through New Zealand. Ansett itself did not operate a significant number of long-haul international routes. Thus, they were a perfect target for Air New Zealand.
Then, in 2000, Air New Zealand beat out Singapore Airlines‘ offer and fully acquired Ansett Australia at a tune of A$680 million. In an interview with the Australian, former Ansett Australia executive Rod Eddington said,
“Air New Zealand trumped the $500 million Singapore Airlines bid, putting up $680m for half of Ansett. Air New Zealand didn’t have the balance sheet to support Ansett.”
Ansett fleet issues
On the road to collapse, Ansett Australia started to have fleet problems. First off, Ansett’s fleet was complicated and varied. Ansett operated aircraft as wide and diverse as the A320…
…to the 737…
…to the Fokker 27
…to 747s and 767s too. Unfortunately, this meant that Ansett was running a complicated array of aircraft that cost a lot to maintain. Airlines prefer fleet simplification in place of diversification. In addition, Ansett also ran into problems with their 767s.
Ansett’s 767 problems
Through 2000 and 2001, most of Ansett’s 767 fleet was grounded due to ongoing maintenance issues. The 767s highlighted the problem with Ansett’s fleet: it was old. However, the airline was losing a lot of money. Reporting by The Guardian in the days after Ansett’s collapse indicate Ansett was losing as much as $1.3 million per day.
At the same time that Ansett struggled, competitors started to encroach on the airline’s dominance. On the full-service side, Qantas was a major force, and would soon become the premier airline of Australia. Virgin Blue, now known as Virgin Australia, was one of the first new competitors to emerge in 2000 as a low-cost carrier. After Ansett’s collapse, Virgin Australia grew enormously and emerged as Qantas’ leading competitor.
Air New Zealand couldn’t sustain Ansett Australia. They themselves had to receive government support in order to stay afloat. This came with a hefty price to pay: letting Ansett collapse. Air New Zealand placed Ansett Australia into administration and the Australian government refused to bail out the failing airline. It was determined that Ansett could no longer be a sustainable business, and, on September 14th, 2001, the airline ceased operations.
Ansett briefly returned to the sky with a small fleet and simple operations. However, this resurrection soon came to end due to a lack of sufficient financing and heavyweight support in early 2002.
The post-Ansett world
Ansett’s collapse allowed a new competitor to emerge against Qantas: Virgin Australia. And, ten years after Ansett’s collapse, CAPA released a report indicating that, despite Ansett’s collapse, Australia’s aviation industry continued to grow. Although some growth slowed as a result of the 9/11 attacks, the market bounced back and continued to grow.
Ansett’s collapse was felt across Australia. Thousands of people lost their jobs. Blame went around from the Australian government to Air New Zealand. Ultimately, even if Ansett had survived beyond 2001, they would have faced a difficult future. With the world rattled by 9/11, the struggling carrier likely wouldn’t have fared well against other, more stable carriers. Furthermore, had Air New Zealand continued to invest in Ansett, it is likely that both airlines would have collapsed leaving a major void in the South Pacific aviation market.
Today, Ansett lives on as a memory. Having ceased operations less than 20 years ago, a fair number of Australians and avgeeks still have fond memories of the airline. Now, after Ansett’s demise, Australian aviation has turned a page and found a new competitive market between Virgin Australia and Qantas. This competition led to both carriers establishing low-cost carriers which, overall, have lowered airfares and increased passenger numbers in Australia.
Have you flown Ansett Australia? Do you miss Ansett Australia? Let us know in the comments!