Being a volunteer at the Ansett museum in the small Victorian town of Hamilton wasn't a busy job-until last September, when the Australian airline was put into voluntary administration. Since then, visitors have been arriving in growing numbers at the tin hangar, eager to learn about Ansett's 66-year history. Ken Bond joined the airline as a teenage mechanic in 1940 and retired as national maintenance manager 54 years later. Now a volunteer at the museum, Bond never imagined it would outlive the airline. "Right up till the end,"he says, "it was an incredible company."
Ansett is all but dead after administrators last week failed to complete a sale to the Tesna consortium headed by Solomon Lew and Lindsay Fox. While the company's creditors and 3,000 staff live in hope of salvaging something from the crash, and travelers wonder if fares will rise or routes will be closed, Australia is left with only two companies vying for the $A6 billion a year spent on domestic air travel. "I think consumers are entitled to feel disappointed and concerned,"said the country's competition regulator, Allan Fels. "In fairly large segments of the market, there just won't be competition."
In one corner is Qantas, the 82-year-old veteran with 80% of the market; in the other, Sir Richard Branson's Virgin Blue, the no-frills carrier that entered Australia 18 months ago. Since September, Qantas has cut some international services and boosted its domestic capacity; it is also planning to spend $A50 million upgrading its airport lounges, put 15 new Boeing 737-800s into service by mid-year and launch a new low-cost international carrier, Australian Airlines. The demise of its long-standing rival sent Qantas' share price soaring. New player Virgin Blue, which has 15% of the local market, plans to add 1,000 people to its 1,500-strong workforce and expand its fleet from 16 planes to 23 by the end of the year. University of New South Wales aviation analyst Rodger Robertson is among those impressed by Virgin Blue's disciplined outlook and management system. "It seems to be making money where others couldn't,"he says.
But what kind of rivalry can exist between the full-service airline and the much smaller discount operator? Both airlines have rushed to assure customers that fares won't rise. "Virgin Blue has built itself on the whole concept of being a low-fare carrier and we remain committed to that,"says spokeswoman Amanda Bolger. Others contend that the heavily discounted fares Australians had been snapping up for months couldn't last anyway. "A Sydney-to-Melbourne ticket for $33? Just crazy,"says Ken Bond. "That would barely pay for the air to fill the tires, let alone all the infrastructure needed to run an airline."The end of fierce discounting wars may anger customers but will improve the industry's stability, says Robertson: "Qantas knows that if Virgin folded tomorrow, we would be in for re-regulation of the industry."Competition czar Fels points to the carrier's "tremendously powerful position"and says he will keep a close eye on Qantas-which is already under investigation for several alleged abuses of market power.
Further afield, on the less traveled rural routes, the four regional airlines that operated as Ansett subsidiaries expressed confidence that Ansett's fall would not affect their operations. Hit hard by Ansett's initial collapse, the regionals "have learned to cope since September,"says Bob Mason, ceo of the Regional Aviation Association of Australia. On Victoria's King Island, where 1,750 residents depend on air services for tourism and transport to the mainland, Terry Vokes, of the King Island Regional Development Organisation, says Kendell is back to seven flights a day and locals are reassured. "We have done the best we can as a community to promote the airline and get people to come back to the island,"she says. Yet some regional customers are nervous that Qantas may cherry-pick towns out of regional air networks, threatening services to less-profitable stops along the routes.
At a broader level, there are promising signs. Tourism Task Force chief executive Christopher Brown says the industry has "turned the corner"since the Ansett collapse: "What we've learned the hard way in the last six months is that viability in the long term is more important than $33 airfares ... if there's no plane, you can't travel."Still, while Bond and his fellow volunteers at the Ansett museum mourn the end of one journey, Virgin Blue will this week launch its newest 737 aircraft. "Our message is, Watch out, Qantas,"says Virgin's Bolger, "here we come."As one family of big old birds lands for the last time, Australia's air travelers may rest easier in the knowledge that a new group of fledglings is preparing to take off.