The Week in Focus: No winners in TA/QF feud

The Week in Focus: No winners in TA/QF feud
By admin

Whatever you think of Alan Joyce, he can never be accused of backing away from a scrap, or from making bold decisions.

Faced with the prospect of endless industrial action by mutinous unions last year, his answer was to ground the entire fleet and bring the dispute to a head.

Such a shock tactic ultimately worked, although it was not without huge risks, both for the business and for Joyce personally in the form of his career.

Now, Joyce has reacted in similarly ruthless fashion over the position taken by Geoff Dixon, the airline’s former chief executive and now chairman of Tourism Australia.

To briefly recap, Dixon is among a number of influential individuals said to be alarmed at the strategic direction of Qantas, with a couple of those individuals – though not Dixon – actively briefing against the airline.

The group has acquired 1.5% of Qantas and has ambitions, so we are led to believe, to scupper the planned tie-up with Emirates.

Qantas is of the firm view that Dixon, as chair of the nation’s tourism body, is out of line by involving himself with such a cabal and promptly terminated all commercial ties with TA, citing Dixon’s untenable conflict of interests.

Qantas “cannot continue to collaborate with an agency whose chairman is a member of a syndicate committed to unravelling Qantas’s structure and direction”, it said.

Whether Joyce and Qantas expected TA to ask Dixon to step down in unclear, but that did not happen. On the contrary, TA has publicly backed its chairman and insisted that all protocols were followed with Dixon excusing himself from any discussions involving Qantas.

TA’s support for Dixon comes in part because it genuinely values what he brings to the table. His experience, contacts and deep knowledge of the international aviation industry has been instrumental in securing airline partnerships around the globe. TA would be loathed to lose such qualities.

In addition, TA fundamentally believes that Qantas has over-reacted and has shot itself in the foot by refusing to work with the agency.

There is no question that withdrawing all financial support from TA was a drastic move. While understandable in one regard, there is a bigger picture and higher stakes at play here that made Qantas’s decision surprising (notwithstanding Joyce’s penchant for dramatic action).

I don’t see what Qantas has gained from its stance. Tourism Australia is more than one individual – albeit that individual is the chairman – and there are countless stakeholders who benefit from the close relationship between the two organisations. Punishing TA and the wider tourism industry seemed an over the top response.

Furthermore, Qantas itself benefits from its partnership with TA. It hasn’t worked with the tourism agency over many years for the good of its health. It sees value in working with the national tourism body, value that will now be lost.

TA has predictably played down the impact of losing the support of Qantas. While acknowledging Qantas as the “largest and highest value marketing partnership”, it represents 6% of the total marketing effort with deals with around 20 other airlines helping to ease the disappointment.

That Qantas is not the be all and end all of Tourism Australia’s marketing may be true.

But Australia’s peak tourism body and flag carrier tearing lumps out of each other is hardly the positive image we want to portray overseas. Consumers may not care – it’s hardly going to put them off travelling to Australia – but the international industry will frown upon such a unsightly feud.

Much is said about the importance of uniting behind one tourism voice – ironically underlined recently in a speech by Geoff Dixon – and here we now have the industry’s two most important players at loggerheads. It’s madness.

It might not be very palatable for Joyce to see TA’s chairman – and his former mentor – disagreeing with his strategy for the airline. But according to Qantas, virtually all shareholders are supportive of the proposed Emirates deal so is this “APA mark II club” as Joyce branded it really such a nuisance?

There are no winners in this saga, only losers. And for the good of everyone, it needs resolving quickly. 

As a senior industry figure said last night, tourism minister Martin Ferguson should haul both Joyce and Dixon into a room and get them to sort it out.

Latest News