Issues & Trends – December 2012 / January 2013

TA, QF split: VA, EY and others to the rescue

OTHER airlines are helping to fill the void created by Qantas’ decision to pull its co-operative marketing support from Tourism Australia.

Incensed by the reported involvement of TA chairman Geoff Dixon in a planned takeover of the carrier, Qantas has decided to take its bat and ball and go home.

Claiming Dixon has an untenable conflict of interest – a claim rejected by the TA board – the airline has terminated the flow of marketing funds, headlined as $50 million and variously valued between $5 million a year and $44 million over three years depending on whom you listen to.

Barely had Qantas slammed the door shut on its way out than Virgin Australia had prised it open to negotiate a deal that will see the carrier double the value of its marketing partnership with TA.
The two parties will increase their joint commitments from $6 million to $12 million over the next three financial years, on a range of joint marketing activities, including the promotion of major sporting and business events.

The global partnership will focus on key inbound visitor markets to Australia – the US, New Zealand, the UK, continental Europe and Asia.

TA managing director Andrew McEvoy described the pact as “great news for Australian tourism”. He said the extra funds will “immediately go to good use in some of our most important inbound tourism markets”.

He added that the recent bounce back in US arrivals, up four per cent so far this year, was a significant opportunity and would also be a key focus of the additional marketing funds.

Virgin Australia chief executive John Borghetti said: “Thanks to our growing international operations and our recently formed alliances with four of the world’s leading airlines Air New Zealand, Delta Air Lines, Etihad Airways and Singapore Airlines, we now have the ability to access international visitors from over 400 cities around the world.”

One of those partners, Singapore Airlines, signed a major three-year marketing partnership with TA in July last year to jointly fund a range of tourism promotion activities.

And another, Etihad Airways, has now signed a strategic marketing agreement with TA that will see the parties jointly spend up to $6 million over the next three years in a range of co-operative programs. Etihad president and chief executive James Hogan said: “Etihad Airways and Tourism Australia have already started planning a major campaign for the first half of 2013.”

McEvoy said Tourism Australia and Etihad will jointly seek involve-ment of the states and territories in future co-operative campaigns “in line with continuing efforts to speak with ‘one voice’ in international marketing” – a thinly veiled criticism of Qantas’ claim that it will channel marketing funds directly to individual states.

Qantas’ new partner Emirates, meanwhile, has committed more money than it spends with any other Nation Tourist Office worldwide to a $14.3 million, three year marketing pact with TA.