Victoria State Wants to Grab $40M Qantas Marketing Deal

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By Vittorio Hernandez | November 30, 2012 9:53 AM EST

The dust from Qantas's fallout with Tourism Australia over the alleged meddling of a private consortium at the air carrier's policies and decision has barely settled, yet new groups are in for the prowl ready to get a piece of the $40-million marketing deal with the airline. 

Among the early predators to the suspended agreement is the Victorian government, which confirmed it started talks with Qantas to ink a marketing partnership after Qantas Chief Executive Alan Joyce ditched the three-year contract with Tourism Australia.

The talks would be consistent with Mr Joyce's previous statement that Qantas would continue to support local tourism but would rather deal with states instead of federal agencies. His decision ended four decades of business relationship with Tourism Australia.

Mr Joyce ended the relationship with Tourism Australia because of his belief that Geoff Dixon, the chair of the federal body and former Qantas chief executive, is plotting to gain control of the air carrier and make him jobless.

Mr Dixon heads an influential group made up of businessmen Peter Gregg, John Singleton and Mark Carnegie who have jointly acquired 2 per cent stake of Qantas, which has fueled speculations of the consortium seeking a greater say in Qantas operations.

Mr Singleton pointed out that one key concern of the consortium is Qantas' plan to enter into a seat-sharing partnership with Middle Easter carrier Emirates to improve Qantas's financial viability in international routes.

Mr Joyce insisted that the Emirates alliance is a key plank to turnaround Qantas International and give the unit clear returns in the future.

Tony Webber, former chief economist of Qantas, acknowledged that Mr Joyce is under extreme pressure to improve the air carrier's finances because of the company's historical losses, non-declaration of dividend for years and the drastic drop in shareprice to $1 from $6.

He pointed out that the reason why Mr Dixon does not favour the Emirates tie-up is Qantas was outspoken in the past about Emirates, it is bad for Australian tourism and Aussie travelers prefer Asian stopover, not Middle Eastern layovers.

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