Saturday November 01, 2014

A distinctly Byzantine saga

This image of a Qantas 747-400 has been synonymous with the promotion of tourism to overseas markets, but no longer, it seems. (Qantas)

By Michael Gisick

The Byzantine Empire, as the standard-bearer of Christian civilization for a millennium after the fall of Rome, deserves to be remembered for many things. But it has left its clearest mark in modern English as a term for a particularly self-destructive form of politics – one defined by consuming internal rivalry and inattention to external threats. As its neighbours ate away at the Imperial borders, the court in Constantinople devoured itself with shadowy plotting and vicious score settling. Byzantine politics typically ended with someone having their eyes put out.

Alan Joyce lacks the power – and, one would hope, the will – to put out Geoff Dixon’s eyes, but there is a distinctly Byzantine quality to the saga that has surrounded the two men in recent weeks. Mr Dixon, the erstwhile Qantas CEO and current chairman of Tourism Australia, has been linked to a cabal of investors seeking to wrest control of the airline away from Mr Joyce. Reportedly they are upset by Joyce’s decision earlier this year to cancel a raft of orders for Boeing 787s. Nor are they said to be happy about Qantas’s proposed alliance with Emirates.

But there is considerable mystery about all this. It is far from clear whether Dixon and his mates, who reportedly own about two per cent of the airline’s stock, seriously hope to take over Qantas. Perhaps, as one line of speculation runs, they are simply trying to drive up the share price. Perhaps, holds another, they are acting on a personal grudge.

Joyce has struck back, calling out the alleged conspirators at a Sydney press conference last month and cancelling Qantas’s marketing deal with Tourism Australia, citing a conflict of interest on the part of Dixon. The deal, which was set to expire in July next year had been worth $44 million over three years with Qantas contributing $5 million in cash and supplying tickets for media and trade events. After cancelling the deal Qantas said it would redirect its support to state tourism bodies and would remain “the biggest private investor in promoting Australia to the world.”

But its rivals have been quick to step into the territory Qantas has abandoned. On December 13 Virgin Australia announced it would double the value of its partnership with Tourism Australia from $6 million to $12 million over the next three years. Four days later, Virgin shareholder Etihad announced a deal with the national tourism body to inject $6 million over three years promoting Australia in the Middle East and Europe.

In the scheme of things it could be argued this is all small potatoes. Certainly Qantas will not live or die on whether its partnering dollars go to Tourism Australia or Tourism NSW. But it could hardly be clearer that Qantas faces very large and very real threats to its future. The Emirates alliance is at the centre of Joyce’s efforts to tackle those threats, and he is certain to be judged on the success or failure of that effort.

What Qantas doesn’t need now is distraction and it could be argued that Joyce has made rather too much of this affair through his heavy-handed effort to ‘smoke out’ Dixon and his crew. As often as not, Joyce might bear in mind internal threats are best defeated not by Byzantine palace politics, but through success on the field.