Aircraft 'war' hits Australia

The iternational "air war" between Boeing and Europe's airbus consortium to sell the new generation of jet aircraft has reached Australia, and Boeing appears to be ahead.

Australia's two main domestic airlines have decided to enter the competitive era of the 1980s by basing their airline fleets on different flagships.

The government-owned airline, Trans-Australia Airlines (TAA), has ordered four Airbus aircraft and has options on eight more.

The other front-line domestic operator, Ansett Airlines of Australia, has ordered five Boeing 757s to match the Airbus, and has also decided to replace its existing Douglas DC-9s with Boeing 737s.

TAA announced its equipment decision in december. Two of the four European Airbuses it ordered were to be delivered next year. It believed this would give it a major competitive advantage over Ansett, which had delayed making a choice of new aircraft. TAA and the government also believed that Ansett would buy the Airbus, but that it would take delivery of its new aircraft at least a year after TAA.

But the government line decided to buy Boeings, a move that coincided with an upheaval in the control of the Ansett company, which had resulted in publisher Rupert Murdoch's News Corporation Ltd. buying half the stock in Ansett. Mr. Murdoch and the other chief executive, Sir Peter Abeles, negotiated with both the European Airbus consortium and with Boeing before making their final decision. Airbus offered delivery dates that would have allowed Ansett to introduce the planes at the same time as TAA. However, Ansett decided to take the Boeing package instead, even though the new 767 won't be available until more than 12 months after TAA flies its Airbus.

Ansett hopes to hold its market share durring the period TAA is the only wide-body-aircraft operator by introducing the 737 and scheduling more frequent departures between the main cities.

The size of the Ansett deal with Boeing caught TAA and the government off guard. Ansett ordered 21 aircraft from Boeing, worth over $400 million (Aus.), comprising five 767s, twelve 737-200 series (with options on four more), and four 727-200s. It has also expressed "a very definite interest" in the 757, which is scheduled to fly in 1982.

Ansett is planning to finance the purchase primarily with loans from the US Ex-Im Bank, from which it secured such favorable loans that the deal has been questioned by leading members of the US Senate Banking Committe. The loan is for $290 million (US), mostly at 8 percent.

The deal has been questioned partly because Mr. Murdoch, in his other capacity as publisher of the New York Post, lunched with President Carter on the same day the Ex-Im Bank approved the deal. Three days later the Post endorsed Mr. Carter for the Democratic presidential nomination.

Mr. Murdoch and Sir Peter, however, deny there was any political, noncommercial aspect of the deal. Sir Peter says Airbus Industrie had offered Ansett a 7.9 percent loan to finance the purchase of the Airbus

You've read  of  free articles. Subscribe to continue.
QR Code to Aircraft 'war' hits Australia
Read this article in
QR Code to Subscription page
Start your subscription today