Strong quits Qantas chair race

Reports in the Herald Sun and other media this morning say that Qantas Director James Strong has withdrawn as a candidate to replace Margaret Jackson as chairman of the airline.

After weeks of speculation, Mr Strong, who was widely tipped as the front runner for the position, announced late last night he was withdrawing his name from the list of three candidates believed to be shortlisted for the prestige appointment.

The Qantas board must now consider an outsider to succeed Ms Jackson, who steps down in November.

Announcing his decision on the the ABC’s Lateline last night, Mr Strong said his commitments as chairman of Woolworths and insurance company IAG, would have had to give up at least one of those roles to undertake the heavy role demanded at Qantas.

The Qantas board is keen to announce Ms Jackson’s successor and had planned to name her replacement within the coming weeks to head of uncertainty about the airline’s future leadership.

Mr Strong, who stepped down as chief executive in 2001, rejoined the Qantas board in July last year at Ms Jackson’s invitation, a decision which was welcomed by the present CEO, Geoff Dixon, who was Mr Strong’s successor.

While Mr Strong is believed to have expressed initial interest in replacing Ms Jackson, that would have meant a change to a rule inserted in the Qantas charter in 2003 preventing chief executives becoming chairmen.

While the rule could have been changed, the decision would have to have been taken by six board members who voted for proposal believing at the time that it was an example of good corporate governance.

Qantas also is still coming to terms internally after the failed $11 billion takeover bid by private equity consortium Airline Partners Australia.

John Schubert, the chairman of the Commonwealth Bank of Australia and a member of the Qantas board, was regarded as another suitable candidate as chairman of the airline, but had already advised fellow Qantas directors that he was not interested.

He is considered as a likely appointment as the next chairman of BHP Billiton.

The Qantas board has hired executive search firm Spencer Stuart to come up with lists of names for three vacant Qantas board seats.

There is already one spot vacant on the board following a resignation last year.

Two more positions will become vacant in November with the resignation of Ms Jackson and also that of the executive chairman of Publishing & Broadcasting, James Packer.

Yesterday Geoff Dixon defended Ms Jackson yesterday against criticism of her handling of the failed $11 billion buyout offer by Airline Partnes Australia.

Ms Jackson, who has been Qantas chairman since August 2000, was criticised for being too supportive of the offer from APA, a consortium put together by the Macquarie Bank.

Asked at yesterday’s Aviation Press Club lunch if Ms Jackson had been treated unfairly over her controversial response to APA, Mr Dixon replied: “Yes, I do.

“She has been an absolutely outstanding board member and an outstanding chairman for a long period of time, during some pretty turbulent times,” he responded.

“Margaret said herself she may have misspoken once. My God, I would get hung every day for misspeaking.”

Then asked to expand on that he said, Mr Dixon replied: “I think that’s probably as strong a statement as I can make.”

Speaking to Lateline last night, Mr Strong also suggested Ms Jackson had been the subject of unfair criticism and noted that she had been a good chairman.

James Packer, who has also announced his plans to step down as a Qantas director at the November meeting, is believed to have been upset at Ms Jackson’s treatment.

Former British Airways and Cathay Pacific chief Rod Eddington, who now lives in Melbourne, would have been the most likely outside appointment as chairman but has ruled out taking another airline job.

He is at present an adviser to federal Opposition Leader Kevin Rudd and head of Melbourne’s Major Events Committee.

Mr Dixon said yesterday that the two executive directors — himself and Qantas chief financial officer Peter Gregg — were not being involved in the discussions over who might become the future chairman.

“The chairman is an issue for the non-executive directors,” Mr Dixon said.

The future chairman of Qantas will have to choose a replacement for Mr Dixon, who intends to retire in July 2009.

Report by The Mole