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The first service will be flown in mid December and Ansett may also add an additional service in its own right at that time using surplus capacity via its three 747-300s.

Aerolineas has been using Qantas for several years but had been unhappy with the lack of enthusiasm by that carrier to look at the long term potential of the South American market. It is not known if at a later date Ansett 747-300s, which have superior payload/range than the older Aerolineas aircraft, would be used on a codeshare basis from Auckland to Buenos Aires though this cannot be discounted and would give Ansett a considerable long term advantage over Qantas in this potentially rich market.

As we closed for press, Ansett was also close to finalisation of an order for four new Boeing 767-200s and one -300. It is expected that the aircraft would be delivered through 1996/97.

Air Nz/Ansett Deal Close

The purchase of TNT’s 50% stake in Ansett Airlines by Air New Zealand was imminent as this issue of Australian Aviation went to press.

The deal was scheduled to be announced at TNT’s and Air NZ’s annual general meetings in mid November but was to be delayed for a few days due to some details still having to be sorted out. The sale is subject to Foreign Investment Review Board approval but this is expected to be forthcoming.

Ansett’s other shareholder, News Corporation, had previously been discussing the sale of its half of the company to Air New Zealand but talks collapsed earlier this year.

The format of the deal can only be speculated on until it is formally announced, but press reports have indicated that Air NZ will initially acquire a 25% stake in Ansett (or half of TNT’s holding) and have a firm option to take the remaining TNT stock within three years. Industry sources estimate the value of 25% of Ansett to be $A150-200m.

The deal comes at a time when Ansett’s financial fortunes are apparently entering a decline, TNT chairman Fred Millar describing its 1994-95 performance as “extremely disappointing” and warning of a probable loss in the current financial year. Ansett has lost market share to Qantas on domestic routes and struggled to break even in the September quarter of this year, traditionally a good period for the airlines. Ansett lost $130m in 1991-92, recorded a record $151m profit in 1993-94 but then saw its earnings fall to $51.6m in 1994-95.

An Air NZ stake in Ansett will probably have an effect on the trans Tasman common air market reform abandoned by the Australian government, at least for the moment. With Air NZ owning at least 25% of Ansett, the government could be more or less forced to have another look at the situation.

Cross Runway To Remain Closed

The Coalition’s bid to force the Government into reopening the east-west runway at Sydney airport failed on November 15 when it lost the last minute support of the Greens and the Democrats in the Senate.

The amendment called on the Government to require AirServices Australia to revise the noise abatement procedures for KSA to “disperse more equitably the noise generated by the operation and use of aircraft landing at, or taking off from, the aerodrome by increasing the use of the runway known as the east-west runway.”

Senator Parer, who had proposed the bill on behalf of the Coalition, said later that he was very disappointed that the Democrats and the Greens had abandoned Sydney’s aircraft noise victims when it came to the vote.

“Our amendment to distribute noise over a greater area was based on fairness and equity” he said. “It would have brought considerable relief to the thousands of families now living a daily nightmare under Laurie Brereton’s northern flight corridor. They have every right to demand an explanation from the Democrats and the Greens for their decision to endorse continued operation of the so-called Brereton funnel while his own electorate at the eastern end of the east-west runway, and the other Labor electorates at the other end, remain free of noise pollution.”

An in-depth interview with Senator Parer, the Coalition’s spokesperson on aviation will appear in our January issue.

Boeing Strike Continues

A strike by 33,000 Boeing employed members of the International Association of Machinists and Aerospace Workers (IAM) was well into its sixth week as this issue went to press, with no immediate resolution of the situation apparent.

The IAM workers went on strike in early October, expressing concerns about job security, wages, health cover and the increasing non US content of the latest Australian Aviation Boeing airliners and the threat this poses to local jobs. Foreign content of the 777 is 20% and the 737 and 757 each have 13% foreign content. This compares with 8% foreign content in the 747-400.

At the time of writing, the situation appeared to have reached stalemate with the union so far rejecting Boeing’s offers. Management staff have been put to work on the factory floor to keep some level of activity going. Boeing says that 3000 union members have crossed the picket line and returned to work. The company has nevertheless admitted that there will be a substantial number of delivery delays resulting from the strike.

Interestingly, the strikers’ medical coverage (one of the union’s points of contention) expired on November 1.

The IAM last went on strike at Boeing in 1989 and remained out for seven weeks. Ironically, even if the workers returned to work as we closed for press they would never recover the amount of wages they have already forsaken, so in reality a continuation of the dispute will thus only serve to work against their long term financial wellbeing.

Singapore’s Mega Boeing Order

After seven months of rigorous evaluation, Singapore Airlines has ordered and optioned 77 Boeing 777s in a deal worth $US12.7bn including engines and spares.

The order comprises 34 firm orders with 43 on option, of which six of the firm ordered and 10 of the optioned aircraft are for SIA’s leasing associate, Singapore Aircraft Leasing Enterprise (SALE). The aircraft on order for Singapore Airlines are currently 777-200s but the airline has reserved the right to substitute the -200s for other 777 models, namely the stretched 777-300 and unlaunched 8500nm (15,750km) range destretched 777-100X. SIA’s aircraft will be powered by Rolls-Royce Trent 877s, the engines for SALE’s aircraft have yet to be determined and would largely be a matter of lessor preference.

The 777s will be delivered between 1997 and 2004 and will be used to accommodate expected traffic growth in the Asia Pacific region and to replace A310s and 747-300s. The deliveries will allow Singapore to maintain capacity growth of 8 to 10% per year over the next 10 years. The 777s seating configuration has not yet been announced.

SIA currently operates 69 aircraft comprising 747s and A310s (and a 737-300F). If all options for this and previous orders are exercised, Singapore would have a fleet of 150 aircraft by the end of 2004, comprising 777s, 747-400s (including freighters), A340s and possibly a smaller capacity type for regional routes.