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OzJet and Meurmans

As suggested a while back, it was revealled today that OzJet has backing from Meurmans estimated at 70mil.

Interesting articles, both positive and negative in todays paper www.theage.com.au


  • Indeed very interesting to see how the involvement of both men in F1 has some "side effects"

    70 million what? baht? dollars? australian dollars?
  • damn, does anyone have a subscription for the age? or should we ask them nicely whether we can use it for the site?
  • Paul Stoddart wasn't afraid to take formula one to court. Will his business style work in Australian aviation? Simon Hoyle reports

    Paul Stoddart had hardly slept for the better part of four days when he made time for this interview during the Australian Grand Prix.

    The expatriate Australian boss of the Minardi racing team and European Aviation group was exhausted but upbeat after his victory in a legal battle with the world motor sport governing body, the Federation Internationale de l'Automobile.

    Stoddart and his Minardi team's mechanics had been working until 5 o'clock that morning to make the team's cars comply with 2005 formula one regulations so they could take part in the race.

    The all-nighter came after Stoddart took the FIA to the Victorian Supreme Court to challenge the regulator's authority to exclude his cars from the Australian Grand Prix. Stoddart gained an injunction allowing him to participate but withdrew the injunction after the FIA threatened to cancel the race.

    Although set in a sporting context, Stoddart's battle with the FIA said a great deal about his approach to business. It's a style that Australian consumers and regulators and his competitors will see up close later this year, when Stoddart gets his cut-price business-class airline, OzJet, into the air.

    The Melbourne-born businessman relishes a challenge, whether it's on a racetrack or in business. Anyone who thinks Stoddart is dreaming when he says OzJet will be flying by August - the Civil Aviation Safety Authority willing - underestimates the man.

    Those fighting qualities have not endeared Stoddart to everyone. His detractors in the formula one pit lane say he's too rough around the edges - that he's too uncouth to really belong in the glamorous world of F1.

    But in other quarters, his willingness to get his hands dirty has won him admirers - and the support of a growing number of people who think his tough, distinctly unglamorous and no-nonsense approach to business and sport is precisely what his precious competitors need to shake them from their complacency.

    Paul Stoddart landed his first part-time job at the age of eight and left school at 14 to "get into the real world and see what I could make of it".

    He's made quite a lot of it. At 51, Stoddart owns an airline, an air charter business (both based in Ledbury, England) and a formula one team, and will soon also own an airline in Australia.

    Stoddart has turned his passions into lucrative businesses. He says: "If it flies, floats or drives, I'm interested in it." (There's a fourth item on that list, but not one to be repeated in a family newspaper.)

    Stoddart had to outmanoeuvre the FIA to get his cars into the Australian Grand Prix - he isn't afraid to take on the regulators when he feels the regulations are wrong.

    He says he's put at least $50 million into Minardi, made up of money from family trusts and, indirectly, through sponsorship by his aviation businesses.

    He's not afraid to challenge the establishment. He's done it in formula one, arguably one of the toughest businesses in the world, and there's every indication he'll do it in the Australian aviation industry if necessary.

    Stoddart has a very strong sense of fair play, combined with a respect for rules and the correct order of things.

    His battle with the FIA had been portrayed in some circles as Stoddart trying to win concessions for his financially strapped team, but in reality it was more an attempt to ensure that the sport's regulator didn't exceed its authority and that the sport's real players - the 10 formula one teams - could rely on the sport being correctly governed in the future.

    It was a calculated effort to bring to a head a situation with, in effect, an industry regulator that Stoddart believed was behaving unacceptably.

    The core businesses that have enabled Stoddart to indulge his passion for motor racing and that lay the foundation for OzJet are European Aviation and European Aviation Air Charter.

    The airline and the charter business are mature businesses, and apparently profitable. They have established management and Stoddart is happy to let the businesses run themselves during his prolonged absences.

    "I don't have to be there," he says. "I've got a good reporting structure. OzJet initially is going to take a bit (of time) but after that, we've got good business management systems. And because it's a business I know, I know what I'm doing and I don't have to learn anything about it. I will have to put more time into Australia; I would estimate I'll have to spend about three months a year here."

    Stoddart has a history of doing things unconventionally, and will carry that philosophy over to OzJet. He left Australia for Britain in 1986, getting his big break - a break that he exploited perfectly - in 1989 when tipped off by a mate in Australia that the RAAF planned to auction off some planes (BAC 1-11s) and spare parts. Stoddart bid on the basis of what he'd actually seen, and took delivery of the stuff he thought he'd bought.

    Over the coming months, shipping containers started arriving and they didn't stop coming until Stoddart had received 48 of them.

    Initially, Stoddart planned to use the planes to fly passengers to Tasmania, then the only Australian state with a casino, but eventually he took them back to Britain.

    A second deal to acquire BAC 1-11s from British Airways set Stoddart up with a fleet of planes and, significantly, enough spares to service his own fleet and also supply the operators of similar planes all over the world. Stoddart had become a major player in the aviation business.

    In 2002, Stoddart sold his plane charter business but the buyer couldn't make it work. Stoddart bought it back in March last year and says it's now profitable again.

    While Stoddart is an unknown quantity to many in the Australian business community, those who think him too small to survive in the local aviation market or not wily enough to take on the established players may be forced to eat their words.

    To get his cars into the Australian Grand Prix, Stoddart had to outmanoeuvre a genuinely politically savvy individual: the president of the FIA, Max Mosely.

    Mosely, son of Sir Oswald Mosely, who founded the British Union of Fascists in 1932, reacted petulantly to Stoddart's legal moves, threatening to cancel the Australian Grand Prix and calling into question Australia's ability to stage any other international motor racing events.

    Taking the FIA to court wasn't Stoddart's preferred course of action but that didn't stop him doing it. He says it was worthwhile.

    "I hope it means that we've had enough lawlessness," Stoddart says.

    "I hope we can settle down to stable sporting and technical regulations and the correct governance of the sport.

    "I didn't take any happiness out of it, but whenever in life you have to stand on principle to the extent that I have had to do it, they say victory is sweet. But that's not true. I'm feeling as gutted with the victory having gone in our favour as if it hadn't."

    Getting OzJet into the air may also be a battle but Stoddart is adamant it will fly.

    "The timing is dependent on CASA, of course," he says. "But we have now gone through due process."

    Stoddart says the key to the airline's success will be keeping costs down. OzJet's Boeing 737s may be ageing, but OzJet has no debt and won't be saddled with high leasing costs.

    Half of the airline's fleet will be European Aviation-owned planes and half will be planes bought from the Ansett administrators.

    A 737 seats 130 passengers in economy configuration but OzJet's planes will be configured to seat just 60. It's officially known as business class, but Stoddart says it's more akin to the short-haul, first-class configuration common in Europe.

    While the final details of OzJet's offer have yet to be nailed down, the business plan is based on a few simple but powerful insights into how business travellers want to fly.

    Stoddart says business travellers don't want to have to check in ages before the plane departs.

    They want to be able to carry on more luggage than the other carriers permit, and usually do not want to wait for their luggage at a carousel after they've arrived. They want space on board the plane, the flexibility to change flights without penalty, and value for money.

    "When you're looking at putting 60 people onto a plane, and there's no middle seats and there's no problem with overhead lockers, etc, you can board and disembark far quicker," Stoddart says.

    "If you're travelling on business, you probably have a briefcase and an overnight bag. If they can (carry that luggage on board), they're not waiting for luggage to come and they're not going to have that wait disembarking. Honestly, we think we can shave 30 per cent off point-to-point times."

    Stoddart says that in phase one, OzJet won't have dedicated lounges, but with a check-in time just 15 minutes before departure, they won't always be necessary.

    In addition, he says, if a passenger's business meeting runs late - or finishes early - there'll be no financial penalty for changing flights.

    "We think we can offer a full service at a fully flexible economy price," Stoddart says.

    "It works economically because we'll have the lowest costs of any operator, not in terms of actual cost per seat kilometre, but we're not carrying massive debt on new aircraft and leases. We can operate on a much lower cost structure than our competitors.

    "We think we'll have a good response to this service and we feel that our loadings will be sensible. Our most ambitious load factor is 60 per cent."

    Stoddart says OzJet isn't aiming to make massive inroads into the market share of the existing players, and thinks a high single-digit percentage will be the company's natural market share.

  • and in response...

    Might take magic to get airline flying
    By Scott Rochfort
    March 26, 2005

    Paul Stoddart is facing an uphill battle to have OzJet in the air by late August, with the carrier yet to lodge a formal application with the safety regulator to operate services and yet to sign several key commercial agreements it claims it already has.

    The Civil Aviation Safety Authority (CASA) is expected to scrutinise OzJet's plans to operate 30-year-old Boeing 737-200s, and it could take up to a year for the airline to get the certificate it needs to run an airline.

    OzJet chief executive Hans van Pelt has dismissed talk that the airline is behind schedule.

    He said the airline's timetable to establish itself at its new Adelaide base and start services within five months was "moving ahead nicely".

    As for delays in OzJet gaining its certificate, he said: "The people saying it are completely unaware of when we first (met) CASA and when we got the balls rolling."

    But a CASA spokesman recently said it would take at least six months for OzJet to get its certificate. Virgin Blue took 10 months to get its certificate in 2000.

    "OzJet is now in the throes of appointing the final people to run the airline," van Pelt said, referring to a chief pilot, head engineer and maintenance controller.

    Stoddart recently returned to Britain before ending talks with liquidators KordaMentha over the purchase of four BAE 146s from the failed Ansett.

    OzJet, meanwhile, claims on its website that it has a "partnership with Ansett Aviation Engineering Services". But this appears premature.

    The former Ansett maintenance division has yet to sign any agreement to maintain OzJet's proposed fleet of 10 aircraft, including the four previously owned by Ansett.

    At a media conference in Sydney last week, van Pelt said OzJet had three of the former Ansett BAE 146s undergoing heavy maintenance "D" checks in Melbourne, indicating the company already owned the aircraft.

    But he appeared to contradict himself on Thursday when he said a contract to buy the BAE 146s was "close to being finalised".

    Despite OzJet still failing to show any evidence that it might get approval to fly by August, van Pelt said: "I'm yet to meet a person that says that this isn't going to work."

    But there are many who doubt OzJet's chances of survival.

    "I would have thought the model was vulnerable, to say the least," Ian Thomas, a director of the Centre for Asia Pacific Aviation, said.

    Thomas said the key problem was OzJet's focus on business travellers, in that it would be chasing a market tightly guarded by Qantas and aggressively pursued by Virgin Blue.

    Virgin, which has just issued its third profit warning since August, is desperate to stem falling yields and its reliance on price-sensitive budget travellers by lifting its proportion of business travellers.

    Virgin recently launched its corporate "Blue Plus" fare, giving passengers fully flexible refundable tickets, free entry to Blue Room lounges and priority check-in. Virgin's attempts to crack the corporate market are expected to become more aggressive when Patrick Corp boss Chris Corrigan takes control of Virgin next month.

    "There's not a lot of room in the market for a new entrant," Thomas said, adding that any airline willing to take on Virgin Blue, Jetstar and Qantas would need to have extremely deep pockets.

    OzJet, backed by Dutch group Muermans, says it has $70 million.

  • OzJet, backed by Dutch group Muermans
    Wasn't expecting that one :P
  • On a related note: We have some overseas visitors staying with us who have lately been touring Vietnam. They told me that an internal Air Vietnam flight that they took was actually operated by a European Aviation Aircraft with a Danish crew.

    So is Stoddart wet leasing to Vietnam? That would certainly be quite an exercise in niche exploitation.
  • Who was the pilot, Kiesa ???:hehe:
  • That Explains why Meurmans isn't on the car this year..... Instead Ozjet on both sidepods and the enginecover..... Sure Meurmans pays this....... or at least I expect...
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