Qantas ends Tourism Australia link

Qantas Airways on Wednesday severed a lucrative marketing deal with Tourism Australia after claiming its boss was leading a consortium trying to unseat the airline's management and buy out the company. The carrier said it had advised the country's official tourism agency it was halting the Aus$50 million (US$52 million) deal "due to a potential conflict of interest of the agency's chairman", who is former Qantas chief Geoff Dixon. Dixon ran the national flag-carrier between 2001 and 2008, when Alan Joyce took over. "This conflict has arisen from the involvement of Tourism Australia's chairman with a syndicate that is actively canvassing fundamental changes to the Qantas Group strategy, including the proposed partnership with Emirates," the airline said. "Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas' structure and direction." Media reports have said the consortium, that is also said to include retail entrepreneur Gerry Harvey, advertising guru John Singleton, and another former Qantas executive Peter Gregg, have been buying up shares. The reports say they are scouting for global investors, mainly from China, to back a takeover and stymie Qantas's 10-year tie-up with Emirates, which was unveiled in September but remains before the competition regulator. The syndicate are reportedly disaffected with the performance of Joyce and the company's floundering share price. News Limited newspapers said Joyce wrote to Tourism Minister Martin Ferguson on Tuesday to tell him of his decision, warning that Qantas would refuse to have any further dealings with Tourism Australia while Dixon was chairman. Despite ending the 40-year partnership, Qantas said it remains committed to supporting the tourism industry. "Not one dollar will be removed from tourism marketing as a consequence of this decision. Rather than providing this support through the federal agency, Qantas will instead look to do so through the states," it said. "The suspension includes both Qantas and Jetstar, but to avoid penalising the tourism industry, will not include some key initiatives that are already underway." Back in August, Qantas posted its first loss since privatisation in 1995, plunging Aus$244 million into the red due to intense competition in the region, rocketing fuel costs and the strong Australian dollar. It was a significant reverse from a net profit of Aus$250 million a year earlier.