The country's premier tourism body has become a casualty of the bitter feud between Qantas boss Alan Joyce and his former mentor Geoff Dixon after the airline withdrew its financial support for Tourism Australia.
In suspending its 40-year partnership with Tourism Australia, Qantas has accused Mr Dixon – who is the tourism body's chairman – of being part of a group of investors committed to "unravelling Qantas's structure and direction".
The loose group of investors, which also includes Sydney money man Mark Carnegie, former Qantas executive Peter Gregg and advertising guru John Singleton, has been garnering support from large shareholders and unions for a change in strategic direction at the de facto national carrier.
In a major escalation of the stand-off, Mr Joyce wrote to the federal Tourism Minister, Martin Ferguson, late on Monday to advise him of its decision to suspend the relationship with Australia's peak tourism body because of a "potential conflict of interest of the agency's chairman".
Mr Dixon, who is a former Qantas chief executive, declined to comment today.
Qantas has made clear that Mr Dixon will have to step down from his role or cease being part of the rival group before it will resume its dealings with Tourism Australia.
‘‘The consortium is determined to stymie the Qantas-Emirates partnership which has otherwise been enthusiastically embraced by the tourism industry, our customers and our shareholders,’’ Mr Joyce said in the letter to the Tourism Minister.
‘‘Qantas is of the view that as chairman of Tourism Australia, Mr Dixon is in a position of significant and untenable potential conflict.’
The airline has a three-year marketing deal worth about $44 million with Tourism Australia.
It will divert the money it spends on tourism marketing to state-based bodies.
The breakdown in the relationship between Mr Joyce and Mr Dixon has attracted more interest than usual because the pair had been so close. Not only did Mr Dixon back Mr Joyce to be his successor in 2008, but he chose him to be the inaugural chief executive of Qantas's budget offshoot, Jetstar.
Until late last year, the pair met frequently at some of Sydney's finest eateries.
Mr Joyce will front an aviation industry gathering in Sydney at midday today where he is expected to face questions about the agitation strategy being pursued by the group of investors and his decision to suspend the relationship with Tourism Australia.
Despite the decision to suspend the arrangement, a Qantas spokesman said the airline remained committed to supporting Australian tourism. "Rather than providing this support through the federal agency, Qantas will instead look to do so through the states," he said.
The suspension includes both Qantas and its budget offshoot Jetstar but the spokesman said that in order to avoid penalising the tourism industry it would not include some key initiatives already under way.
The group of well-connected businessman has taken a stake of about 1.5 per cent in the airline as part of a plan to eventually gain seats on the board and agitate for a major change in its strategic direction.
Last week Mr Joyce sought to quell any nerves among his senior managers about the agitation from the high-profile group of investors. He told them in an email that the board had "every confidence" in management's five-year plan to improve the airline's fortunes.
"Rumours about this type of agitation have been doing the rounds for many months. We have not received any formal or informal approaches regarding a takeover. And I have no intentions of supporting any private equity bid," Mr Joyce said in the email.
"No doubt your teams will have questions and concerns as these rumours escalate. I ask for your support reassuring them that our strategy is the right one."