Collapse of Ansett Australia and its Impact on the Australian Aviation Industry

This essay elaborates on the collapse of Ansett Australia in 2001 and its impact on the Australian aviation industry. It explores how the exit of Ansett allowed for the emergence of Virgin Blue Australia and the subsequent reduction in air transport fares. The essay also examines the recovery of the mainline market and the decline in regional flights. Overall, the collapse of Ansett created expansion opportunities for airlines like Virgin Australia and Qantas.

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Aviation
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Ansett Australia has operated in several destinations in Asia and Australia before its
collapse in the year 2001. In the early hours of 14th September 2001, Ansett Airlines, which
was considered to be the oldest and the second largest Australian career, suddenly ended all
the flights when an administrator appointed by Air New Zealand (its parent company)
announced that it had no funds in order to continue the operation (Markham et al., 2018).
This essay shall elaborate on discussing how this collapse of Ansett Airline influenced the
Australian Aviation industry over the last 40 years.
The collapse of Ansett Australia in the year 2001 has set the last decades for a good
range of momentous and rapid changes in the Australian aviation industry and air transport
and this influence has been felt globally, all around the world. There are very few single
airline collapse that is so widespread and have lasting impact like that of Ansett. This is due
to the fact that the Australian aviation industry has benefitted a lot from the exit of Ansett as
this have permitted the entry, emergence and development of the unstable start-up of Virgin
Blue Australia in order to secure its position and at the same time, have notably reduced the
average fair rate of air transport. One of the significant advantages of the collapse was the
fact that the capacity of the mainline route was very quickly restored. The Ansett Airlines
have accounted for about 40% of the domestic aviation of Australia when it ceased or
stopped the operations on 14th September (Forsyth, 2017). On 12th of that very month, just
two days prior to the collapse. The then administrators of the company quickly determined
that the carrier was unviable when it was placed into the voluntary administration and
followed some mounting losses.
Moreover, the collage of the Ansett was not linked with the terrorist attack of 2011
and since then Australian aviation industry saw a significant market contraction. However,
notwithstanding the pleas for government bailout which was focused on supporting the
interests of the staff members that the aviation industry, decreased significantly from 26.8

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billion to 25 million within a year between 2001 and 2002, which was about 6.7% (Markham
et al., 2014). However, by the year 2003, it overshoot the exit of pre-Ansett with around 27.1
million passengers carried and the low fares of air travelling stimulated the total growth.
Ansett Australia had been through its subsidiaries a significant player in the regional
Australian turboprop market. While they were struggling hard to recover from the situation,
competition was removed to a great extent and also the recovery process in the regional
flights took much longer to take place. The departures of the aircrafts dropped down to
256,917 in the year 2002 from 357,097 in 2000 after the collapse took place (Lohmann &
Vianna, 2016). Although the number of flights were not surpassing ever since then, the total
number of passengers have completely recovered. It is to note that the regional carriers flew
about 11 million passengers in the year 2000 and then 8.2 million in the year 2002, although
a notable drop of 26% but again, in the year 2007, it eclipsed the collapse carriage with 11.3
million passengers (Halpern, Graham & Dennis, 2016). During that period, a significant shift
was noticed in the profile of service to some larger regional centres, particularly along the
East Coast of Australia. It was due to the fact that Virgin Blue or Virgin Australia with the jet
service have changed the lifestyles of many people. The airline has trebled its fleet size today.
With the same, in many tourist destinations, there saw a good range of activities that have
changed their fortunes rapidly and dramatically.
Indeed there was a fast recovery in the mainline market of Australia that had
accelerated the growth, along with the Australian airlines today are carrying about 78% more
passengers as compared to ever before the collapse of Ansett. However, it is to mention that
as compared to such a significant profit, the regional Australian market consequently lost the
growth and development opportunities over the last decade and this had ended with only ten
percent of more passengers carried in the year 2010 as compared to the year 2000. Moreover,
in between the year 2000 and 2005, there were about 36 airports that had lost their scheduled

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regional airline services (Zhang et al., 2017). Among 36, 14 of the services lost were in the
New South Wales. Apart from this, the next largest loss was of 8 airports in the Northern
territory of Australia. This region was not served by the subsidiaries of Ansett. With the
same, there was a direct loss of about 16,000 jobs along with indirect loss of 54,000 jobs. In
2011, the former employees of Ansett got their final payment.
As per Forsyth (2018), the Australian market at large was benefitted from the exit of
Ansett. The air fare were immediately dropped in substantial manner. It allowed Virgin Blue
or Virgin Australia to save and secure their market position in Australia in which it had
entered in the year 2000. The increasing costs of fuel, the falling Australian dollar, as well as
a bigger competitive response from the incumbents Qantas and Ansett Australia, Virgin Blue
was long been struggling until the collapse of Ansett from the market. With the same Impulse
also reborn as one of the low cost airlines along with B717s but it had struggle hard to
maintain its position and was ultimately taken over by the Qantas airlines in the year 2001.
Hence, from the above analysis it can be concluded the collapse of Ansett Australia
has led to expansion opportunities for two of the most prominent Australian airlines- Virgin
Australia and Qantas to a great extent. These two carriers of Australia are successfully filling
the void that was left by the Ansett Collapse in the year 2011 and are craving up the regional
and domestic market windfall bequeathed to them. These two airlines have been expanded
dramatically and are replacing and adding the aircraft.

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References:
Forsyth, P. (2017). The regulation and deregulation of Australia's domestic airline industry.
In Airline Deregulation(pp. 48-84). Routledge.
Forsyth, P. (2018). Predatory Behaviour in Australian Aviation Markets. In Competition
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Halpern, N., Graham, A., & Dennis, N. (2016). Low cost carriers and the changing fortunes
of airports in the UK. Research in transportation business & management, 21, 33-43.
Lohmann, G., & Vianna, C. (2016). Air route suspension: The role of stakeholder
engagement and aviation and non-aviation factors. Journal of Air Transport
Management, 53, 199-210.
Markham, F., Young, M., Reis, A., & Higham, J. (2018). Does carbon pricing reduce air
travel? Evidence from the Australian ‘Clean Energy Future’policy, July 2012 to June
2014. Journal of Transport Geography, 70, 206-214.
Zhang, A., Hanaoka, S., Inamura, H., & Ishikura, T. (2017). Low-cost carriers in Asia:
Deregulation, regional liberalization and secondary airports. In Low Cost
Carriers (pp. 55-69). Routledge.