THE standoff between Qantas chief executive Alan Joyce and his former mentor, Geoff Dixon, deepened on Wednesday night after Tourism Australia backed its chairman in the feud between the pair.
After an emergency meeting, the tourism body's board gave its full support to Mr Dixon and said that his investment in Qantas was not a conflict of interest.
In reply, the Qantas board said its corporate governance charter was best practice.
To try to end what it sees as a slow-burn strategy, Qantas had earlier said it would cut its funding to Tourism Australia unless Mr Dixon stepped down as chairman or dissociated himself from a rebel investor group agitating for a big change in direction at the airline.
The board's decision leaves it at odds with Qantas, which has said it does not believe Tourism Australia can manage what it deems Mr Dixon's conflicts of interest. Mr Joyce also launched a stinging attack on the group of renegade investors he labelled as "Airline Partners Australia Mark II", as he tried to put an end to their destabilisation strategy.
He mounted a spirited defence of his own five-year blueprint for Qantas, and criticised key aspects of the rebel investors' plans to sell its budget offshoot, Jetstar, and the frequent-flyer loyalty scheme.
While declining to detail the breakdown in his relationship with Mr Dixon, he insisted that his priority was the airline and his strategy aimed at turning around its underperforming international division.
"I don't want to be distracted from it," he said. "Personal relationships and anything else around it are secondary to doing the right thing by Qantas," he said. Mr Joyce said he had not met Mr Dixon, the former Qantas boss, for a "catch-up" for eight months. Before their relationship soured late last year, the pair met as often as every fortnight in swish Sydney eateries.
The investors, including Mr Dixon, former Qantas executive Peter Gregg, Sydney financier Mark Carnegie and ad man John Singleton, have been seeking support from large shareholders and unions for a change in strategic direction at the airline. They have questioned the benefits to Qantas of the proposed alliance with Emirates.
Mr Joyce said Mr Dixon was a member of the "APA Mark II club", noting that the group included some key players in the failed $11.1 billion bid for Qantas in 2007 by Airline Partners Australia. Mr Dixon, who had once been a mentor to Mr Joyce, declined to comment.
The Qantas boss said Mr Dixon was "very much out there briefing against the company", and he had no choice but to suspend the airline's relationship with Tourism Australia.
Late on Tuesday, Mr Joyce wrote to federal Tourism Minister Martin Ferguson to tell him that Qantas was suspending its dealings with Tourism Australia because he believed Mr Dixon was in a position of "untenable potential conflict".
"The consortium is determined to stymie the Qantas-Emirates partnership, which has otherwise been enthusiastically embraced by the tourism industry, our customers and our shareholders," he said in the letter to the minister.
Qantas is the largest private funder to Tourism Australia, followed by Emirates. Its three-year funding program for the tourism body totals $44 million and is up for renewal next July.
The Tourism Minister appoints the chairman and the rest of the body's board, which includes as a director former Virgin boss Brett Godfrey.
Describing the dispute as a "commercial matter", the minister left it in the hands of the board to resolve.
Frequently Asked Questions about this Article…
What is the public feud between Qantas CEO Alan Joyce and Geoff Dixon about?
The dispute centers on Geoff Dixon’s role as Tourism Australia chairman and his involvement with a group of rebel investors who are pressing for major strategic changes at Qantas. Qantas CEO Alan Joyce has accused Dixon of briefing against the company and being part of a consortium trying to block Qantas’ strategy, prompting Qantas to suspend dealings with Tourism Australia unless Dixon steps down or dissociates from the investor group.
Why did Qantas say it was suspending funding to Tourism Australia?
Qantas suspended its funding because Alan Joyce believed Geoff Dixon was in a position of "untenable potential conflict" due to Dixon’s investment in Qantas and his association with rebel investors. Qantas told the federal Tourism Minister it would cut funding unless Dixon left the Tourism Australia chair or distanced himself from the group.
How did Tourism Australia respond to the conflict-of-interest concerns involving Geoff Dixon?
After an emergency meeting, the Tourism Australia board gave full support to chairman Geoff Dixon and stated that his investment in Qantas did not constitute a conflict of interest. The board’s decision put it at odds with Qantas’ view that Tourism Australia could not manage Dixon’s potential conflicts.
Who are the rebel investors pressing for change at Qantas and what are they proposing?
The investor group includes Geoff Dixon, former Qantas executive Peter Gregg, financier Mark Carnegie and John Singleton. According to the article, they have sought support from large shareholders and unions for strategic changes, and have questioned the merits of the proposed alliance with Emirates. They have also been associated with proposals to sell Qantas’s budget arm Jetstar and its frequent-flyer loyalty scheme.
What has Alan Joyce said about his strategy for Qantas amid the boardroom dispute?
Alan Joyce defended his five-year blueprint for Qantas, saying his priority is turning around the airline’s underperforming international division. He criticised key aspects of the rebel investors’ plans (such as selling Jetstar and the loyalty program) and said he did not want to be distracted from executing the strategy.
How does the Qantas-Emirates alliance factor into the dispute?
The proposed Qantas-Emirates partnership is a key point of contention. The rebel investors have questioned the benefits of the alliance, while Alan Joyce said the consortium is determined to stymie the Qantas-Emirates partnership — a tie he said has been embraced by the tourism industry, customers and shareholders.
How much does Qantas fund Tourism Australia and when is that funding due for renewal?
Qantas is the largest private funder of Tourism Australia. The airline’s three-year funding program to the tourism body totals $44 million and is up for renewal next July, according to the article.
What role does the federal Tourism Minister play in resolving the Qantas and Tourism Australia dispute?
The federal Tourism Minister appoints the Tourism Australia chairman and the board. In this case, Tourism Minister Martin Ferguson was informed in writing by Alan Joyce about Qantas suspending its dealings with the tourism body, but the minister described the dispute as a "commercial matter" and left resolution in the hands of the Tourism Australia board.
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