Airline Acquisition

When Ansett Airlines collapsed on 13th September 2001 it took with it a number of very successful, long-standing regional airlines like Skywest and Kendall who found themselves in the hands of Administrators and grounded.

As a former long-standing CEO of the Skywest group of companies, Bill Meeke was approached by numerous parties to launch a ‘rescue’ of the airline. A group was formed in conjunction with ABN Amro Morgan and negotiations with the Administrators launched.

Most bidders saw the need to secure major undertakings from the Administrators in respect of the airline’s operating licences (including the AOC granted by CASA), route licences over WA regional routes (granted by WA Transport) and aircraft leases held by the CBA. Some bidders were also concerned about taking over existing staff liabilities and preferred to ‘sack and re-engage’ the personnel.

These issues soon became conditions precedent of the competing bids. However, it was apparent that the Ansett Administrators could not guarantee that these conditions would be met as they involved third-parties over which they could not exercise control.

Because Bill Meeke has such a close knowledge of the company, its management and financial structure he advised his backers to launch a non-conditional bid for the shares in the company assuming all staff provisions. To compensate for this ‘continuity bid’ the offer price was lowered significantly.

The syndicate led by Bill Meeke was chosen and the acquisition was completed in February 2002 – with what was understood to be the lowest bid. No subsequent ‘surprises’ were encountered.