Jan 30, 2013

Qantas contras led by Dixon sell strategic stake

Joyce needs to bring Qantas back into the business of nationally coordinated tourism promotion, even if Qantas can no longer claim with conviction to be the Spirit of Australia unless we mean 'spirit' as in 'dead'.

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking


There are reports that the dissident Qantas shareholders, headed prominently by former Qantas CEO Geoff Dixon have sold out of their ‘strategic’ stake in the airline.

Will this mean his successor and current Qantas CEO Alan Joyce will now renew the airline’s ties with Tourism Australia, which Dixon chairs, and which he continued to chair after Joyce had a hissy fit and took his support away last year, only to discover the limits of his influence on the federal government, which reaffirmed its support for Dixon?

Dixon was a key proponent of the failed Air Partners Australia private equity funded bid to take out Qantas in 2006, and which failed to attract sufficient shareholder support in 2007, and left both Dixon and his then chair at Qantas, Margaret Jackson, looking somewhat exposed over their intensely partisan support of a takeover which would have destroyed Qantas in the subsequent global financial crisis because of its impact on highly leveraged structures.

The Qantas contras, Dixon, vulture capitalist Mark Carnegie, former Qantas CFO Peter Gregg and ad man John Singleton, were somewhat candid as to their reasons for wanting Joyce ejected from the Qantas cockpit.  They spoke in favour of liberating its $3 billion in cash, and selling off Jetstar and the frequent flyer program, but as shareholders who wanted to gain sufficient influence in the board room to drive such ‘reforms’ rather than through a total takeover.

It is widely said that the numbers were never going to work for the contras this time around because of the higher cost of financing such a shareholding through private equity and the distinct lack of enthusiasm in PE circles for such a play in 2012, compared to 2006/07.

And there was the additional problem that Qantas has been seen widely, including by the writer, as having been stuffed by the current management, with disastrous consequences for the share price and shareholders with no dividends being declared for more than three years.

Qantas can be argued to be giving away, or wasting, the very things the Qantas contras would have ‘plundered’, a term justified by John Singleton gloating about how Qantas was a bargain full of undervalued assets.

Not that Singleton was wrong about the attractions, but to Joyce’s credit, he labelled the proposed raid on cash, Jetstar and the frequent flyer program as destructive of a great Australian enterprise, a statement he made without even a flicker of irony.

If the contras are officially ‘gone’ there is a case for Joyce accepting the fact that Dixon is the chair of Tourism Australia, that he is very, very good at what he has done for tourism, and that he Joyce needs to bring Qantas back into the business of nationally coordinated tourism promotion, even if Qantas can no longer claim with conviction to be the Spirit of Australia unless we mean ‘spirit’ as in ‘dead’.

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9 thoughts on “Qantas contras led by Dixon sell strategic stake

  1. newformula

    Ben – no sarcasm intended here, just an honest question – is there anything you think that Qantas is doing right?

  2. Nick Brodie

    Dixon et al showed their true colours – it’s only ever been about profiteering and asset stripping. It’s what Airline Partners would’ve done, it’s what Dixon’s cabal did now. Tourism Australia needs Qantas more than Qantas needs TA. Q has it all over TA and Virgin in the branding stakes – always will. Dixon should retire.
    Now, lets talk about the Virgin share price which is currently about 18% of what it listed at…..

  3. Ben Sandilands

    The things Qantas does right, that is, that it gets up and does every day, are not being done ‘as right’ as its main competitors.

    The things Qantas does wrong, in my view, are rooted in, or by, an ideological agenda driven by the chair and board, that is harmful to its brand and passenger loyalty.

    I’m keen to see Qantas successfully articulate and give effect to initiatives that will restore value and satisfaction. But I want ‘real’ not ‘pretend’.

  4. Ben Sandilands


    Without disagreeing or agreeing on those views, share price comparison need to take into account capital and equity reconstructions like the Toll disbursement of its stake with an in specie dividend, and the equity reconstruction that accompanied the entry of NZ,EY and SQ to the register of the Virgin Australia Holdings structure.

    Your conclusion may be right, I think it is, but there is no straight numerical stock price relationship with the original float.

    Which fortunately for me, I didn’t participate in. The retail shareholders who have benefited from QAN and VAH or its previous form, did so from lucky or astute judgements as to when to buy and sell. In my opinion, subscribing to a stock at day one and then doing nothing is like choosing to go and sit on a deck chair on a freeway.

  5. chpowell


    Help me out here:

    “…Dixon is the chair of Tourism Australia, that is he is very, very good at what he has done for tourism”

    Can you explain/defend this statement?

    imo, Dixon created many of the problems which the unfortunate Leprechaun inherited on taking the MD role.

    Curious as to both why, and how, Dixon is doing such a wonderful job in what certainly appears to be a figurehead position.


  6. patrick kilby

    Ben there is the issue of doing it a ‘right as its major competitors’ and doing it as right as the ‘major legacy carriers’ stuck with 1970s IR and cost structures (LH AA AF etc). If the former it is getting there and despite the nay sayers Emirates is a good deal in this regard; and if the latter it is miles ahead even including internaitonal(and QF domestic is doing very well unlike almost all other legacy carriers).

  7. Ben Sandilands


    Sorry for the delay. These have been very full days.only just noticed your question.

    Starting point. Do what I do. Pull the reports of Tourism Australia and the read up on Dixon’s tenure and results. Subscribe to a few tourism newsletters. Attend the odd function. Ask questions.

    PS Are you really Paul Hogan?

  8. Geoff

    Newformula – One thing Qantas still does right is flying aircraft. They still have well trained pilots who rarely make the headlines for anything other than having done a great job under trying circumstances. Their domestic and international flights come and go with little fanfare, very few mistakes and an air of professionalism. Their cabin crew and their airport staff do a simalarly great job, putting on a smile as the company outsources them and tries to cut their wages and conditions.

    Qantas has become what someone once called Ansett – a great airline but a terrible business. Who is responsible for the business? The Board and the management.

    I can only hope that the wonderful Australians who work there will still be around when the airline gets some managers who know what they are doing, or, get jobs somewhere else where there is already good management.

  9. chpowell

    Thanks for your reply, Ben.

    I’ve looked at it (TA), per your suggestion. As with most marketing functions, all one can really say is that they (TA) spend all their money, year in, year out.

    To take one notable example, where all are those Yanks we were promised would be disgorged off QF11 en bulk after the Oprah Winfrey circus last year?


    ps I don’t wear Grosby footwear

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