Stop Press

Mr Jones verified that to the professional investment community, both here and abroad, a premium grade rating will be essential in gaining sufficient investment momentum and credibility to ensure that the float, the largest in Australia’s history, is successful. Provisional estimation of the worth of the remaining 75% of Qantas is in the region of $A1. 9bn to 2. 2bn.

It is now planned that the prospectus should be launched sometime in September with the results of the float being known by November.

Hazelton Joins Ansett:

New South Wales regional operator Hazelton Airlines has switched allegiances having signed a new commercial agreement with Ansett Australia.

Effective April 18, Hazelton’s Sydney airport passenger check in and office facilities have moved from the Australian Airlines to the Ansett terminal. The agreement will provide for a new passenger lounge in the Ansett terminal plus baggage handling and tarmac transport, along with access to Ansett’s 24 hour reservations system. Hazelton retains its own reservations system and independence, the agreement with Ansett being strictly commercial.

Funding Latest Eurofighter Threat:

The Eurofighter 2000 programme seems to stagger from crisis to crisis these days (refer Newsdesk this issue), the latest revolving around a lack of funding from Germany, which has shown little enthusiasm for the project in recent times.

German funding for the programme technically ended in April and at the time of writing there was little indication that more is forthcoming to fill the $US300m gap in the 1993 budget. This leaves Britain, Spain and Italy with some serious problems, not the least of which is the fact that if industry bills are not paid due to a lack of budget, then the NATO Eurofighter Management Agency could find itself liable.

There are several options – a ‘quick fix’, further delays (strongly opposed by Britain and Italy), a rearrangement of Germany’s work share (opposed by Deutsche Aerospace) or even removing Germany from the programme altogether

Compass Collapse Sparks Litigation:

The primary reason for the collapse of Compass Airlines is now well known – a lack of an adequate capital base – and is detailed elsewhere in this issue (refer pages 4 & 5).

The events which have followed the col- lapse are interesting- the charging of Dep- uty Chairman Doug Reid by the Australian Securities Commission for breaches of Sec- tion 205 of the Corporations Law (including providing false information to the airline’s directors), the demand by Supreme Court writ from Compass’ parent company South- ern Cross Airlines Holdings that Mr Reid pay a total of $9. 46m (plus compensation) to them, the seizure of Mr Reid’s assets under the order of the Queensland Supreme Court due to “evidence of calculated and gross dishonesty” and the suing by Mr Reid of Compass’ chief executive Sam Coats for $345,000, an amount claimed to be owed from a loan negotiated by “oral contract”.

The basis of the problems seems to be a deal negotiated by Mr Reid with Apogee Finance Group Inc, a New York based company. It appears Mr Reid (not Compass itself) intended to lease three MD-80 aircraft from Apogee, but despite the deal not going ahead, monies were apparently paid by Southern Cross to the finance company. Apogee was one of the airline’s sub-underwriters and when Compass began to run out of money, negotiations with the American firm were undertaken by Mr Reid to raise cash. The bottom line of the deal which was apparently struck is that an amount of $4. 46m was paid to Apogee, which immediately reinvested the amount in Southern Cross shares, as its share in making up the shortfall of the company’s float.

Section 205 of the Corporations Law prohibits a company from providing financial assistance, directly or indirectly, for the purpose of, or in connection with, the purchase of its shares.

It is the $4. 46m from this deal which forms part of the $9. 46m now being claimed by Southern Cross from Mr Reid. The remaining $4. 998m covers other monies that It is claimed Mr Reid received for use by the airline. At presstime, National Mutual, a trustee for the Advent Tourism Development Fund and Perth based investment company Asia Pacific were also taking legal action against Mr Reid.

Meanwhile, any chance of Compass reemerging once again has gone following a court ruling that no further attempt will be made to sell the airline as a going concern. There has been no interest shown by any potential buyers in Compass II.

Regrettably, the name Compass will remain to haunt us for many years yet as the myriad legal wrangles concerning both versions of the airline finally proceed towards their inevitable conclusion.

Caa Changes Atc Procedures, Cuts Jobs:

The Civil Aviation Authority has announced some restructuring of procedures and cutbacks to save a further $50m annually.

The changes, announced early in April involve creating new airspace classes, the closure of five ATC towers, the loss of 871 jobs and changes to some ATC procedures. The change that has attracted the most criticism is that to disband ground based flight services at some busy regional airports, requiring aircraft within proximity of the field to radio their position to one another. This controversial system cuts out the need for a ground based air traffic controller to relay aircraft locations at airports such as Ayers Rock.

As a cost measure four regional airports, Karratha, Proserpine, Mt Isa and Avalon will close, while the Roebourne Shire Council has contracted the CAA to keep the Port Hedland tower open.

The reclassification of airspace into five classes follows ICAO recommendations, and will simplify procedures for aircraft flying within the three levels of 5000, 10,000 and 20,000 feet.

 Boeing Hope to Launch 737X Next Year:

The next version of the world’s best selling jetliner, the 737, is planned for launch sometime in 1994 providing the world economy begins to improve.

This would be the sixth version of the famous twinjet, which first flew back in 1967 and today has recorded sales exceeding 3000 units. Provisionally designated the 737X, the latest variant will feature two additional fuselage plugs to take capacity from the 146 of the -400 to 165 passengers.

The X would also feature a recontoured wing of increased span providing a 24% increase in wing area over its forebear. For the first time ever there would also be on offer an engine choice with IAE V2500s of 27,000lb thrust being marketed alongside the now standard CFM56.

Additional fuel capacity, aerodynamic improvements, allowing a higher cruise speed on a par with the 727 and 757 and a max pax range extension of 800nm would, Boeing feel, offer an excellent growth aircraft for airlines already operating the 737 yet not wanting the capacity of the much larger 757/767.

Boeing is currently discussing the project with a wide range of airlines, including Qantas and Australian, and hopes to be in a position to formally launch the type at the 1994 Farnborough airshow.

The Jabiru Is Blue, Not Red!

Formally rolled out at Boeing’s Renton facility on March 31, Qantas/Australian’s 31st 737, VH-TJS Jabiru, carried the colours of Australian rather than the much mooted red and white of its new big brother.

Seems that Qantas management were perhaps over enthusiastic in their moves to get Australian’s ‘baby’ jet fleet into the group colours. Whilst all was set at Seattle to don the red and white to the new Boeing It seemed that nobody had actually cleared it with the board, which not surprisingly became agitated at the move and pulled the plug. Back went the red paint and out came the traditional blue, green and gold! Jabiru is due into Tullamarine as this issue hits the streets whilst the next ‘Australian’ 737, due in October/November (coincidentally at the time of the float) is expected to feature the colours of its larger brothers.