Tourism Australia Loses Funding Support from Qantas

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By Esther Tanquintic-Misa | November 28, 2012 2:53 PM EST

Tourism Australia has lost some A$44 million funding support from Qantas Airways Ltd over allegations the tourism group's chairman is involved in a demolition job scheme to oust the airline company's chief executive.

Alan Joyce, Qantas boss, alleged Geoff Dixon, the agency's Chairman, was scheming, along with other investors, to change the airline's strategy as well as remove him from the top job.

Mr Dixon happened to be the national flag-carrier's former chief executive officer from 2001 up to 2008. Mr Joyce was his successor.

"Qantas cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unraveling Qantas's structure and direction," the airline company said in a statement. It further said the syndicate, of which Mr Dixon is a member, is "actively canvassing fundamental changes to the Qantas Group strategy" including its proposed partnership with Emirates.

Varied media reports named retail entrepreneur Gerry Harvey, advertising guru John Singleton, and another former Qantas executive Peter Gregg as members of the alleged consortium syndicate. The group of well-connected businessman has been allegedly buying and racking up shares of the airline company, which so far correlate to a stake of about 1.5 per cent in the airline. The plan was eventually to gain seat and entry on the board and press for a major change in the airline's strategic direction.

Mr Joyce had been reported to have written Martin Ferguson, federal Tourism Minister, on Monday advising the latter of the decision to suspend the relationship with Australia's peak tourism body due to a "potential conflict of interest of the agency's chairman."

"It's more than a falling out," Tony Webber, managing director of Webber Quantitative Consulting and a former Qantas chief economist, told Bloomberg News. "I'm surprised by how bitter it got so quickly."

In its latest annual report, Tourism Australia boasted of its A$44 million joint marketing agreement deal partnership with Qantas which should run over three years. The two corporate entities have been partners for over 40 years. 

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