* Qantas says club of investors wants to unravel strategy
* Investors include former CEO Geoff Dixon
* Qantas cuts off funding to tourism body headed by Dixon
* Investor group's aim is to oust current CEO Joyce -analyst
By Miranda Maxwell
MELBOURNE, Nov 28 Australia's Qantas Airways Ltd
went on the offensive on Wednesday against a group of
investors that includes the airline's former CEO, accusing them
of trying to sabotage a recent alliance with Dubai's Emirates.
The spat between Qantas Chief Executive Alan Joyce and his
former mentor and friend Geoff Dixon, who led the carrier from
2001 to 2008, formally came out in the public arena with Qantas
suspending over A$40 million ($41.8 million) in funding to the
country's main tourism agency, which is headed by Dixon.
Qantas has been battling high fuel costs, tough competition
and a strong Australian dollar that has dented tourism spending,
and in September announced a strategic tie up with Emirates
to shore up its loss-making international business.
Local media say the group of investors has accumulated a 1.5
percent stake in the airline and is seeking a shareholder-led
change in strategy. At least one of the investors, wealthy
advertising executive John Singleton, has called for Joyce's
In a statement emailed to Reuters, Qantas said it was
cutting funding to Tourism Australia, adding that Dixon "was a
member of a syndicate committed to unravelling Qantas' structure
The group of investors has not put out a statement about its
"They'll seek to gain influence the cheapest way possible
and I think that makes a hostile takeover for complete control
unlikely at this stage. But I wouldn't completely rule it out,"
said Peter Esho, analyst at City Index.
Esho said the group's main intent was to replace Joyce.
"This is a grassroots campaign to really align the
shareholder base either way: current management which has
presided over a large fall in the share price or a bunch of
people that previously ran this business, know it intimately,
and want to do things differently," he said.
Joyce recently wrote to staff saying he had no intention of
supporting any private equity bid.
Qantas shares have slid some 44 percent since Joyce took the
helm in November 2008. On Wednesday afternoon, they were down 2
percent at A$1.31.
The group of investors also include former Qantas Chief
Financial Officer Peter Gregg and investor Mark Carnegie. Many
were part of a consortium called Airline Partners Australia that
made an unsuccessful US$9 billion takeover offer at A$5.45 a
share in 2007.
Joyce, who dramatically grounded all flights for two days
last year to force a resolution with unions, told journalists in
Sydney on Wednesday that the majority of shareholders as well as
customers and employees supported the Emirates alliance.
He said that while it was clear that the investor group did
not support the Emirates alliance, it was not clear what their
strategy was, and added that he had not spoken to Dixon for
"Personal relationships and anything else around it is
secondary to ... protecting Qantas," he said.
(Editing by Edwina Gibbs)