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’.