High Hopes Of Airlines' Sale Despite Contract Crash
Sydney Morning Herald
Friday July 26, 2002
The prospective buyers of Ansett's former regional airlines Hazelton and Kendell are still confident of clinching the deal to revive bush services despite the termination yesterday by one of the carrier's administrators of the sale contract.
The survival of the airlines now hinges on a meeting today of Hazelton's committee of creditors. The chief executive of Australiawide Airlines, Michael Jones, said Hazelton's administrator, Michael Humphris, of accountants Sims Lockwood, terminated the deal yesterday after a sale deadline lapsed.
However, Kendell's administrator, Korda, Mentha and Colleagues, had agreed to an extension, with revised terms.
Mr Jones said although the deal with Hazelton was formally finished, a new agreement in which $330 million of debt attached to Kendell's fleet was being extracted would be organised. No flights or services would be affected by the sale's delay and he hoped the deal would be sealed by Tuesday.
Mr Jones said he had spoken to Mr Humphris and Hazelton's biggest creditors, all of whom supported the new terms.
``We are not Tesna," Mr Jones said, referring to the aborted bid by the businessmen Solomon Lew and Lindsay Fox to buy Ansett.
``We are trying to find a way to complete this transaction, not a way to get out of it. We are committed to providing high-quality, high-frequency regional flights to Australia [and] we will complete the transaction if there is a way. We have the will."
The airlines have been run by separate administrators since Ansett collapsed in September. They have greatly revised schedules, but are still losing up to$3.5 million a month.
The Australiawide syndicate won the right to buy the airlines as merged entities last month. But the deal has been hampered by delays, industrial bickering and pleas for governmentconcessions.
If the deal proceeds only 600 of the 950 staff are likely to be retained, but there will initially be no scaling back of routes.
Mr Jones said all employees had been offered 6 per cent pay rises, to take effect on the transfer of ownership.
He confirmed Rex Airlines was one name being considered for the relaunched carrier.
Despite remaining optimistic about the sale, Mr Jones urged unions some of whom have instigated legal action to preserve wages and conditions to stop meddling in a complex deal.
If Hazelton's creditors rejected the new offer he would not be in a position to buy Kendell as a lone carrier, he said.
``I implore the unions to back off and give us a break so we can complete this transaction and provide jobs to 600 people."
Mr Humphris confirmed the deal had been terminated, but agreed that talks would continue with Australiawide.
``Hazelton has at all times been able and willing to complete the sale to Australiawide by the scheduled date."
Kendell's administrator, Mark Korda, insisted the deal would proceed. ``As we have reiterated this afternoon to Kendell Airlines staff, our intention is that the sale of Kendell Airlines will proceed. All stakeholders in regional aviation understand the importance of the maintenance of quality scheduled air services to Australia's regional centres."
© 2002 Sydney Morning Herald
