Negotiations With

Ansett's NG Service

Ana Intrude

\ NSETT Airways whose appli-

cation to extend its airline operations from Cairns (Old) to Port Moresby, was refused by the Australian Department of Civil Aviation in June, was, in early July, pre-occupied on an even bigger project. But it is under stood that the company has re •pplied to DCA for permission to operate to New Guinea.

Ansett has made an offer to buy out Australian National Airways, Australia’s longest established and biggest private airline, for about 53,000,000. The matter is (July 11) still under discussion although the suggestion is that ANA will want more than that sum, Ansett’s offer to ANA followed an Australian rejection of ANA’s have your-cake-and-eat-it-too plan to the Australian Government whereby the latter was to form a holding com pany to take over all the shares of ill existing airlines in exchange for shares in the holding company.

The proposal was practicable only ;i all Australian airline companies agreed to be a party to it. The Minister for Civil Aviation said that at least one major airline refused to do this. (The airline is believed to be Ansett).

ANA’s proposal was somewhat ex traordinary in view of the fact that during the Australian Labour Gov ernment’s post-war spree of nation alising key industries, ANA fought vigorously to preserve its identity.

The company then had the active support of all believers in private enterprise. When Mr. Chifley found that nationalising ANA contravened the provisions of the Australian Constitution, he authorised the formation of Trans Australia Air lines, which has operated in com petition with ANA since 1946.

The Labour Government saw that Government business was pushed iAAs way, but the Liberal Govern men in 1952, under the Airline * Save ANA a share of this business.

Although there was initially a prejudice against TAA by the people who traditionally use air services, this company, on its own merits, has risen in public favour in recent years due, to some extent, to the introduc ?! a P o P u lar type of air ciaft than ANA; and in 1955-56 TAA made more profit than the private

company.

In 1955-56, ANA still made a profit, but it was a profit that the shipping interests that virtually control ANA believe too small. They think that the capital tied up in ANA could be more profitably employed else where, and before the Australian Cabinet announced its decision on the proposed merger, it was stated that if ANA could not get what it wanted, it would get out of the air line business.

WHERE does Ansett come in, in this business of Australian in ternal airways? Probably it is a question that can be answered only by Mr. Reg Ansett himself.

But if Ansett does come out of the present negotiations well, it will be a triumph for a very rugged type of Australian private enterprise.

Ansett, regarded as the poorer cousin of Australian airlines, has used smaller planes, along the back lanes of interstate aerial transport: has charged much lower fares than the major airlines and while it has built up a reputation for not asking favours, it has provided the public with efficient air services in all the Eastern States. (See letter p. 157 this issue )