Qantas has axed a $44 million marketing partnership with Tourism Australia and will divert the funds to state-based tourism bodies as the cold war between the airline and a group of private investors heats up.
A Qantas spokesperson says the move is "due to a potential conflict of interest of the agency’s Chairman" – former Qantas CEO Geoff Dixon – "with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates."
"Qantas cannot continue to collaborate with an agency whose Chairman is a member of a syndicate committed to unravelling Qantas’ structure and direction."
However, the airline is quick to point out that its money is still on Australia's tourism table – it just won't make its way into the coffers of Tourism Australia.
In an open letter to members of Australia's tourism industry, Qantas CEO Alan Joyce writes that "not one dollar in tourism marketing will be removed as a consequence of this decision."
"Rather than providing this support through Tourism Australia we will instead begin negotiations to use this funding elsewhere, including through cooperative marketing with the State Tourism Organisations."
Dixon is part of a consortium including Harvey Norman chairman Gerry Harvey, former Qantas finance director Peter Gregg, ad guru John Singleton and venture capitalist Mark Carnegie, which is believed to be planning a tilt at Qantas by acquiring a major shareholding stake of 10-20%.
This would position the group to claim up to three seats on the Qantas board and push for dramatic changes to the airline's management, strategy and operations.
This would include the sale of the ??Qantas Frequent Flyer unit, a partial float of Jetstar and a major expansion of Qantas into Asia, both through increased direct flights and closer ties with an Asian-based carrier such as oneworld partner Cathay Pacific.
Also on the to-do list would be to steer first deliveries of the Boeing 787 Dreamliner to Qantas International rather than Jetstar, in the belief that the 787's fuel efficiencies, reduced maintenance and travel-friendly attributes would help speed the Red Roo's loss-making international arm back into profitability.
A trust established by the group is said to already have a 2 per cent toehold of Qantas shares and is in a second round of discussions with unions and large institutional investors to make their case for change at the top.
It's reported that Qantas is readying for a showdown with the consortium, which could happen as early as this week.
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