Qantas pulls $44m from Tourism Australia, citing 'conflict of interest'

By David Flynn, November 28 2012
Qantas pulls $44m from Tourism Australia, citing 'conflict of interest'

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.

Read: Selling off the Qantas Frequent Flyer scheme

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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David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.


16 Nov 2011

Total posts 595

Oh the irony of it all. Mr Dixon doesn't like the way Qantas is going. Odd because I thought he was at the helm when the good ship Qantas was pointed in it's current direction.

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31 Jan 2012

Total posts 107

In fighting at QF now this, When will there be an incident with one of your planes? I guess you could rebuild the plane like in BKK. Wonder if the IRA has been called in yet?


04 Nov 2010

Total posts 670

Well done, QF. Totally shabby of Dixon to be running around pedalling a repeat of his previously failed scheme, except that last time was even worse because he was the CEO and still plotting behin the scenes to buy out the airline. Dixon is the one who didn't steer Qantas in the right direction to help it better weather the current super-competitive environment, and now he wants in again? No thanks.

Alan Joyce has got a plan and while QF may be in the doldrums right now I reckon it's better to stick with this plan and the Emirates alliance and see it through, not risk dumping that alliance and the QFF scheme.

There's no reason why Qantas can't take on board some of the Dixon ideas like a more aggressive push into Asia and a closer CX relationship, that makes sense, as does bringing some 787s across from jetstar. But that doesn't mean we have to let this well-heeled group of private investors take control of the wheel and steer Qantas into God-knows-which direction.

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