The Jet Wars
TAA was seen to have an unfair advantage, and the Liberal Government's benevolent attitude to ANA was emphasised in 1955 when it legislated to maintain control by directing TAA to exchange 3 turbo-prop Vickers Viscount aircraft with ANA for 2 slower and older piston-engine Douglas DC-6Bs.
TAA had also assessed the British Trident twin jet and aircraft from the USA, and the Caravelle at the time was considered the most acceptable for Australian conditions.
TAA was directed to purchase a third DC-6B to maintain seat parity and equipment similarities.
Irrespective of TAA's objections to this decision, TAA was bound by its obligation to conform, as the Government held the purse strings and was also the dictator of the industry.
This policy would be in vogue for over twenty years, constantly being amended, and it was the inhibitor for the introduction of pure jet aircraft to this country.
TAA had in 1956 assessed and then placed orders for the French Caravelle twin jet.
Due to the legislation, TAA had to cancel this contract and abide by the agreement, introducing slower and older technology in the form of the Lockheed Electra Mk2 — an 84-seat turboprop aircraft — until its competitor was financially able to support the introduction of pure jet aircraft in 1964.
Government Intervention
With the death of Ivan Holyman, the General Manager of ANA, in 1957, the Government reassessed air travel, subsidies, and the general performance of each airline.
ANA continued to receive subsidies while TAA was returning a profit, but the managers of ANA were unwilling to inject additional funds to maintain the established controlled competition.
The Government therefore suggested to Ansett Airways of Hamilton in Victoria that it was the most likely alternative to maintain a competitive environment, and that it might make a takeover bid for ANA. Reginald Miles Ansett was General Manager and owner, and Ansett Airways held some 15% of the domestic network as a minor operator.
His initial bid of £3,000,000 (pounds) was rejected, and so with assistance from the Government and the Shell Oil Company (a further £300,000) he made a second and final bid, which was begrudgingly accepted by the shipping companies.
ANSETT-ANA became Australia's second major trunk-route airline.
