Qantas has withdrawn its four directors from the board of Fijian carrier Air Pacific in another sign of deteriorating relations with Fiji’s military government.
Qantas has been trying to sell its 46 per cent stake in the money losing carrier for several years but has been unable to agree on terms, with Fiji’s government claiming Qantas is demanding an unreasonably high price.
In what some saw as a retaliatory move, the Fijian government earlier this year declared that at least two-thirds of Air Pacific’s board must be Fijian citizens, leaving spots for only three foreign directors. Fiji says the move was meant to end Qantas’s effective veto power over Air Pacific operations, a power Qantas says it never had.
“Qantas’s only right under the Articles of Association has been to appoint four directors to the Air Pacific board (where a two-thirds majority must endorse major decisions). At no stage has Qantas had ‘veto rights’ over any aspect of Air Pacific’s management,” the airline said in a statement today.
“Despite these parameters, the government has made clear its intentions to unilaterally take absolute control of Air Pacific under the new decree. In the circumstances, Qantas believes it is appropriate to remove its four directors.”
Qantas said its four directors would step down immediately. The directors are Qantas International CEO Simon Hickey, QantasLink chief Narendra Kumar, legal counsel Brett Johnson and Charles Harvey.
The airline said it would continue to pursue options to sell its stake in the Air Pacific.
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