Changing Names Changing Conditions and the solution to maintaining the Two Airline Policy
With the death of Ivan Holyman in 1957, the original founder of Holyman Airways, and current General Manager of ANA, the government reassessed air travel, subsidies and general performance of each airline, as ANA continued to receive subsidies and TAA was returning a profit, whilst the owners of ANA were unwilling to inject additional funds to maintain the established controlled competition.
The government suggested to ANSETT Airways of Hamilton in Victoria - Reginald Miles ANSETT was General Manger and owner, (Ansett Airways held some 15% of the domestic network as a minor operator and was the most likely alternative to maintain a competitive environment) - that he might make a takeover bid for ANA. 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 and ANSETT-ANA became the second airline.
Ansett, now with a large debt, could not afford to introduce pure jet aircraft in 1959, and convinced the government that if he was to compete as per the two airlines agreement , ANSETT-ANA could introduce the cheaper, but larger aircraft, the Lockheed Electra Mk2. The government agreed and TAA was forced to cancel the Caravelle order and reorder Lockheed aircraft.
VH-TLA Lockheed Electra Mk2 - John Eyre
And so began decades of 'regulated' airservices, fare control, illusionary competition, and constrained development, all to the detriment of the local industry.
This policy effectively dictated the terms for both airlines, rigidly policed and scrutinized, and any change required government approval; a far cry from the original charter under which TAA was established to pioneer and provide complete air services to the people of Australia.
The strangest fact that this control was admired by many countries where operators would come and go, economies of operation would dictate minimum standards of service or equipment servicing or replacement of aircraft and a stabile fare structure and passenger service expectation an area where Australia lead the rest of the world.