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Rift with tourism body necessary, Qantas

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SYDNEY, Nov 28 AAP

November 28 2012, 2:25PM

Qantas' decision to suspend its partnership with Tourism Australia was required to protect the airline's interests, its chief executive Alan Joyce says.

Mr Joyce said Tourism Australia chairman Geoff Dixon had a clear conflict of interest given he was part of a group of investors looking to climb onto the Qantas share register and take the airline in a different direction.

"It is a clear conflict that needs to be resolved," Mr Joyce said at a National Aviation Press Club lunch in Sydney on Wednesday.

"From our perspective, it is going to be inappropriate for us to continue to work with Tourism Australia while that conflict is there."

Mr Joyce said Mr Dixon was part of a consortium "out there briefing against the company".

"As a consequence of that we are better off working with the states closely on tourism activities," Mr Joyce said.

On Wednesday, Qantas confirmed it had terminated a a three-year, $44 million partnership with Tourism Australia.

Mr Dixon was part of a group of investors looking to buy into in the airline with a view to changing its strategy.

The group included former Qantas chief financial officer Peter Gregg, venture capitalist Mark Carnegie and advertising man John Singleton.

Retailer Gerry Harvey, who is also part of the consortium, said on Tuesday he was a passive investor in the airline.

It was reported that the group had a different strategy to Mr Joyce, preferring instead to sell off the Flying Kangaroo's frequent flyer program and low-cost offshoot Jetstar.

They were also lukewarm about the proposed partnership with Emirates.

Mr Joyce has cut aircraft orders, dropped unprofitable routes, shed jobs and announced a proposed global alliance with Emirates in an attempt to turn around Qantas' struggling international operations, which reported a $450 million loss in 2011/12.

Mr Joyce said selling the Qantas frequent flyer program and Jetstar would be a big mistake and would not in the medium to long term improve shareholder value.

He said Qantas shareholders were behind the current management's strategy.

"We have full support for the strategy that is there," Mr Joyce said.

In his prepared speech, Mr Joyce said 98 per cent of shareholders supported Qantas' proposed 10-year partnership with Dubai-based Emirates, which is being considered by the competition regulator.