Tourism board backs Dixon in Joyce fight

After an emergency meeting, the board of Australia's peak tourism body gave its full support to Mr Dixon as its chairman and declared that his investment in Qantas was not a conflict of interest. The board said its corporate governance charter was "best practice".

In an attempt 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 disassociated himself from a rebel investor group agitating for a major change in direction at the airline.

The board's decision leaves it at odds with Qantas, which does not believe Tourism Australia can put in place protocols to manage Mr Dixon's conflicts of interest.

Earlier, Mr Joyce mounted a spirited defence of his five-year blueprint for Qantas, and criticised the rebel investors' plans to sell the 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 top 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."

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 group of investors, including Mr Dixon, the former Qantas executive Peter Gregg, Sydney money man Mark Carnegie and adman John Singleton has been seeking support from large shareholders and unions for a change in strategic direction.

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 from 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 on Wednesday.

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 longstanding relationship with Tourism Australia.

Late on Tuesday, Mr Joyce wrote to Mr Ferguson to say that Qantas was suspending its dealings with Tourism Australia because he believed Mr Dixon was in a "position of significant and untenable potential conflict". He said: "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."

Qantas is the largest private funder of 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 tourism body's board. Describing the dispute as a "commercial matter", the minister left it in the hands of the board to resolve. In defending his five-year strategy, Mr Joyce described the proposed Emirates alliance as a "killer" deal.