The aviation industry is one that’s ever changing with new carriers constantly emerging. Over the years we have seen many old carriers declare bankruptcy as well as carriers leaving the market altogether as was the case for Ansett Airlines, which this article will address. Ansett Airlines was initially an Australian owned airline that was purchased by Air New Zealand but under the management of Air New Zealand it had a short life span and collapse after only a few months of operation. This Wiki contribution will address reasons for the collapse of the airline as well as provide a summary of seen and unforeseen failures (latent & active failures) using ,’ The Swiss Cheese Model’, into the reasons that lead to the airline’s fleet grounding that facilitated it’s bankruptcy in the first place while it was operating in Australia as Ansett Airlines before it was bought by Air New Zealand.
Ansett Airlines was started by Sir Reginald Miles Ansett in the year 1935. In the year 1940 many airlines in Australia were trying to seek governmental permission to increase their airfares, Ansett Airlines however decided to take a different approach of decreasing its in-flight services and making it a no-frill carrier and this strategy gained profitability for the airline. Many airlines were competing in this Australian market at the time of Ansett’s existence such as Australian National Airways (ANA) and Trans Australia Airlines (TAA) and Qantas. To deal with the competition Ansett decided to buy shares in ANA, and became known as Ansett-ANA. The years that followed saw Ansett purchase the airline Mandated Air Lines (MAL) changing its name again to Ansett-MAL. The strategy that Ansett was applying to try and remain competitive in the Australian market with carriers like Qantas was, to try and buy out other airlines or shares in competing airlines. By the year 2000 Ansett Airlines was heading to bankruptcy and Air New Zealand decided to buy the airline with the hope that it would gain some share of dominance operating in the Australian market. It was in February of 2000 that full ownership of Ansett went to Air New Zealand who had to bid with Singapore Airlines who were also interested in this collapsing airline. Once in the ownership of Air New Zealand the airline became known as,’ Ansett New Zealand. On the 4th of March 2002 after only fifteen months under ownership of Air New Zealand the airline declared bankruptcy and collapsed.1
Why Ansett Airlines Collapsed
• Air New Zealand’s takeover of the airline
At the time of purchase of the airline Air New Zealand ranked 39th in the world and Ansett was at the 32nd ranking. This showed that Ansett was actually performing better than Air New Zealand at the time. The financial position of Air New Zealand at the time was unstable, even though it raised the money to buy this bankrupt airline it did not have enough experience and resources at the time to get the airline out of bankruptcy and profitable again3.
• Competition from Virgin Blue
Virgin blue was able to offer fierce competition in the Australian market and lower its' ticket prices to attract more customers. Rather than Ansett Airlines looking for effective competitive strategies to compete with Virgin Blue, it tried to get Richard Branson to sell the airline to them an offer he quickly declined1. Gary Toomy who was the Air-NZ-Ansett CEO stated that the rejection by Virgin Blue to sell to Ansett was a contributing factor to the collapse of the airline3.
• Ansett Airline’s timing of selling the airline
At the time of selling Ansett Airlines the aviation industry was experiencing the fallbacks of the post terrorist attacks of 9/11. Many airlines in the industry were declaring bankruptcy and trying to seek financial aid from their governments. No one had the money to buy airline assets, and hence the value of Ansett’s aircrafts declined abolishing plans for the airline to recover from its bankruptcy1.
Unforeseen failures that led to Ansett Airline’s fleet grounding leading to its ‘bankruptcy
On the 23rd of December 2000 seven of the Ansett Boeing 767-200 aircraft were grounded by the Civil Aviation Safety Authority (CASA) when it was discovered that the aircrafts had not undergone their structural inspection. After the grounding of the fleet Ansett issued a public statement blaming one of their technical officers for this grounding, saying that the officer had failed to present the paper work on time to management that he had received from Boeing Manufacturers 2yrs prior reminding the airline of maintenance checks they needed to carry out3. After 25,000 cycle the aircrafts were to have structural checks. The blamed officer in his defence said he misread the reminder of service from Boeing to be servicing after 50,000 cycle and filed the document.
In the same month of December it was also discovered that Ansett had, ‘overlooked’ the engine pylon inspections as well. The problems of maintenance of this airline’s fleet however did not end in 2000. They year that followed January 2001 it was discovered that one of the aircrafts that had been grounded the year before due to being over its 25,000 cycle checks had,' hairline cracks' on its horizontal tail surface. Although these cracks did not create immediate safety concerns they contributed to bad publicity that raised questions in regards to how safe the airline was to fly with. CASA concluded that they were too many short comings in this airline’s maintenance system3.
1.Organisational Influences (Latent Failures)
-Poor communication and cross cultural practices
An example of this can be seen in the way the technical officer dealt with the maintenance reminder bulletin from Boeing. He just filled the documents3.Management openly blamed him for the fleets grounding, showing that this organisation had the culture of blame. With proper communication and managerial practices this error could have been avoided.
-Lack of a proper chain-of-command- Looking at the airlines maintenance issues it shows that there was no proper procedures or chains of command set up. The technical officer had no one to report to when he received the maintenance documentation so the paper work ended up with him and no one follow it up.
-Managerial pressure-When Air New Zealand acquired this airline it fired the existing sales and managerial teams and employed its choose workforce4. This was a bad move as the airline got rid of personnel who knew how to operate in the Australian market at a time when there was fierce competition from strong airlines like’ Qantas and Virgin Blue.
Organisational Process (Latent Failures)
-Lack of a properly established safety programs3.
2.Unsafe Supervision (Latent Failures)
Inadequate Supervision- There was no one to supervise the technical officer who was blamed for not offering the documents of reminder of maintenance to management. The maintenance records were also not checked and maintained well as too many discrepancies kept going unnoticed.
3.Preconditions for Unsafe Acts (Latent Failures)
-Personnel Readiness; poor risk judgement-The old Ansett engineering and maintenance managers had been too busy reapplying for their jobs under the new administration of Ansett New Zealand that maintenance schedules were overlooked4.
4.Unsafe Acts (Active Failures)
Ansett failed to follow proper maintenance requirements and this lead to seven of their aircrafts’ being grounded3.
-Inappropriate aircraft maintenance records-CASA found discrepancies with the airline’s maintenance records. Many of their fleet had missed the maintenance dates3.
1. Spirit of Ansett, (2002). A Brief History. Retrieved 02, September 2010, from www.spiritsofansett.com/history/history.htm
2. James,R. (1990). Human error. Cambridge: Cambridge Press.
3. Wilson,S.(2002). Ansett: The story of the rise and fall of Ansett 1936-2002. Australia: Aerospace Publications Pty Ltd.
4. Easdown,G., & Wilms,P.(2002). Ansett: The Collapse. Melbourne, Australia:C.Lothian PTY Ltd.
Want to know more?
Easdown, G., & Wilms,P.(2002). Ansett: The collapse. Port Melbourne: Lothian.
Wilson,S.(2002). Ansett: The story of the rise and fall of Ansett 1936-2002. Australia: Aerospace Publications Pty Ltd.