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16,000 out of work as Ansett’s wings clipped

TRAVELLERS were left stranded all across the country when Ansett had its wings clipped late last week. The airline was put into voluntary administration by Pricewater-houseCoopers at midnight on Friday after weeks of desperate nego-tiations with Qantas, Virgin Blue and both the Australian and New Zealand Governments failed to produce a viable rescue package.

It seems none of the parties was interested in saving an airline that was reportedly losing $1.3 million a day. Ansett’s grounding put 16,000 people out of work and sent Qantas scrambling to find seats for 45,000 stranded Ansett passengers. However, some hope has been handed to the airline’s former staff, many of whom blockaded airports throughout the week.

Three thousand engineering and engine shop staff have been reinstated to maintain the Ansett fleet while the investigation into the airline’s collapse continues and Qantas has suggested it could need up to 7000 Ansett workers to staff extra flights. The Federal Government also has put together a rescue plan for Ansett, introducing a $10 levy on airline tickets to assist workers who are facing loss of entitlements. The eventual fate of Ansett is, unlike their planes, still up in the air. Though there have been whispers of a possible buyer, it is most probable the airline will be carved up.

AUSTRALIAN airlines are not the only ones with problems. Last week’s terrorist attack on the World Trade Centre’s twin towers has had serious financial repercussions for major airlines and travel businesses. Americans are no longer willing to fly unless absolutely necessary and improved security measures at airports have proved extremely expensive. This has led to a drop of about 40 per cent in the shares of AMR Corporation and UAL, the two parent companies of American Airlines and United. Both airlines have announced cutbacks to their flight schedule, along with Continental, Delta and North West airlines.

On Monday night all eyes were on Wall Street, ready to see whose predictions would be proved correct when the major US markets reopened.

While the plunge was among the largest ever, the Australian market initially appeared relieved. The Australian dollar, however, slid back below 50c, unwelcome news to many.

ON the domestic business front, the Federal Government disputed the Opposition’s claims that the GST had been responsible for an increase in bankruptcies, saying Statement of Affairs records showed less than 0.3 per cent of the 13,700 bankruptcies for the six months to June 30 2001 were attributed by debtors to the GST.

AT home in WA, State Ombudsman Murray Allen resigned following two adverse reports on the installation of new computers in the Office of the Ombudsman, and the Government pushed back deregulation of the State’s gas markets by nine months.

The State Government also announced a new emissions-based environmental licence would be developed for and with Alcoa for the Wagerup refinery. Previous licences have been based on production levels, which Alcoa has been given permission to increase recently.

WITH other outstanding corporate crashes coupled with directors’ bonuses fresh in everyone’s minds, some timely new research was released by the Australian Institute of Company Directors. Entitled ‘The 21st Century Board: selection, performance and succession’, the report outlined shortcomings in boardrooms around Australia.

MAGNETIC Minerals was upbeat about its future, however, and the proposed Dongara mineral sands project, announcing negotiations for a possible joint venture, a likely resource upgrade by next month and plans to complete a pre-feasibility study and implement a development strategy by the end of the year.

MEANWHILE the WA Fruit Growers’ Association held its annual conference at the Sanctuary Resort, Bunbury, with quality assurance issues big on the agenda and growers calling for retailers and transporters to be included in industry quality assurance programs.

MARGARET River winery Xanadu Wines has had a fruitful year, reporting an end-of-year profit of $758,000, well up on its pre-listing prospectus forecast of $550,000. The profit comes on the back of strong export market growth whereby the local winemaker returned a four-fold increase in export sales in the 2000/2001 financial year. The trend is expected to continue, with strong sales in the first two months of this fiscal year. And more than just successful sales, Xanadu has also been successful at wine competitions, recently winning two gold medals at the London International Wine Challenge and one gold medal at the Intervin New York.

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