28 November 2012

Qantas and Tourism Australia chiefs in $50 million row

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Australia's national airline has suspended a AU$50 million advertising campaign with Tourism Australia after an alleged plot to lead a buyout of the airline by the head of TA.

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Qantas and Tourism Australia have enjoyed a close relationship for four decades but are now embroiled in a bitter dispute.

Alan Joyce, chief executive of Qantas, claims Tourim Australia chairman Geoff Dixon - who predeceded Mr Joyce at Qantas - is leading a consortium aimed at buying out Qantas and restructuring its business model, including removing Mr Joyce.

In response Mr Joyce has suspended the airline's AU$50 million (£33 million) advertisement agreement with Tourism Australia, ending a 40-year long association.

"This conflict has arisen from the involvement of Tourism Australia's chairman with a syndicate that is actively cavassing fundamental changes to the Qantas Group strateghy," said a Qantas spokesperson.

"Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas' structure and direction."

The 'Flying Kangaroo' posted its first loss in almost 20 years in August and the consortium is reportedly unhappy with Mr Joyce's performance yet Mr Joyce contends that Mr Dixon's involvment with the consortium is a conflict of interests given his position and has writtin to Tourism Minister Martin Ferguson to explain his actions.

However, Qantas was quick to reassure that despite suspending the three year, multi-million deal, the money would still be spent on marketing.

"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."

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