No doubt Qantas CEO Alan Joyce considers himself a hard-headed businessman with pragmatism overruling emotion. But his decision to suspend the airline’s marketing agreement with Tourism Australia over a dispute with Chairman Geoff Dixon is increasingly looking like an emotionally driven strategic error.
Ask yourself this: what has Qantas actually gained from the action? Nothing. In fact, the reverse is true.
It’s opened the door for arch-rival Virgin Australia to fill the void, which it immediately did under sympathetic headlines such as: “Snub for Qantas as Virgin goes to tourism body’s aid” (SMH, Dec 1).
The action also further damaged the already poor relationship between Qantas and the Federal Government, which funds TA, while failing in its main goal, which was to dislodge Geoff Dixon, who is said to be running a destabilisation campaign against Mr Joyce.
There is no upside or plan B.
Fairfax columnist Michael West wrote on the weekend Mr Joyce once again “engaged the thermonuclear option” which worked last year when he grounded the airline in a dispute with unions.
“This time, it looks petulant. It takes Geoff and his mates (John Singleton, Mark Carnegie, Gerry Harvey, Peter Gregg) too seriously.
“The lads are pretty good at getting yarns in the press mooting what they might do if they had a lazy $3 billion. That’s a far cry from a credible offer for the national carrier.
“Between them, they speak for 1.5% of the stock.
“Joyce has moved to flush them out, but really this is an agitators’ game, a slow burn.”
It appears Mr Joyce made his move without evaluating the impact on his business if the all-or-nothing strategy failed.
Which it did.
Emotion was the winner, Qantas the loser.
NB: Travel Daily reports that under their three-year agreement, orginally scehduled to conclude next June, TA and Qantas each contributed $5m annually to joint-marketing initiatives. Qantas also provided $3m to $4m in travel each year.