Qantas CEO Joyce says no to crossing over to the Dixon line
Qantas CEO Alan Joyce said today he would not be a party to actions by a group of shareholders spearheaded by his predecessor Geoff Dixon, the current chairman of Tourism Australia which he said would break up and destroy its business by selling off the Jetstar franchise or the Qantas loyalty program.
That fall out between Joyce and Dixon is now all over the general media, following news that he had written to the Federal Government suspending the groups sponsorship of any new tourism promotion activities with the body because Dixon’s position had been conflicted by his pursuit of what Joyce termed APA 2.
This is a reference to the original Air Partners Australia private equity bid for Qantas that failed to gain sufficient shareholder support in 2007 and which was actively promoted to Qantas shareholders by Dixon when he was the group’s CEO.
Joyce said he had no clear evidence as to what the APA 2 group’s detailed objectives or strategies were, other than references to Qantas cash reserves of $3 billion, its Jetstar brand, and the frequent flyer program.
In a Q and A session in which Joyce said he would leave the personal dimensions of the falling out between him and Dixon to the media, he said it was a matter of issues at the heart of the Qantas business and where it currently was, rather than personalities.
“We won’t be distracted from the main game”, Joyce said.
“We will never be wreckers of this amazing company that belongs to Australia. The majority of our shareholders know that the strength of our brand relies upon it being there for Australia and representing the best of Australia to the world,” he said.
Joyce said the premise that the Jetstar and loyalty program assets could be sold off before their full value is realized was destructive of the total Qantas business, and would depress the value of investments in Qantas in a short time measured against the long term prospects of the full Qantas group as it now is.
In relation to the conflicted state of Dixon as Tourism Australia chairman, Joyce repeated that no current commitments to promote Australian tourism, such as the major buyer and seller event the Australian Tourism Exchange, would be affected.
He said Qantas would however suspend the negotiation of all new programs with Tourism Australia, budgeted at around $44 million over the three years from 1 July, and would direct all of that money into tourism promotion ventures with the state bodies.
Joyce said Queensland Premier Campbell Newman was on the phone early today keen to discuss and negotiate promotional deals as soon as possible.
He also told the room that Qantas was concerned that through a ‘legalism’ Virgin Australia was now about 65% foreign owned, putting Qantas at a disadvantage in terms of capital raisings, and that the airline would continue its efforts to persuade the federal government of the need to ensure there was a level playing field or equal opportunity for all Australian flag carriers.