Dubai: Qatar Airways expects to have 120 aircraft in its fleet within two years and routes to 120 destinations. The Doha-based carrier is also the largest customer for the Airbus A350XWB (extra wide body) with 80 on order.
This was achieved by the carrier in a very short time and it now poses a strong challenge to some of the world's bigger airlines.
Having a plan in place for everything, Qatar Airways chief executive Akbar Al Baker tells Gulf News how the carrier plans to storm ahead despite industry pressures such as the volatility of fuel prices, geo-political unrest in the region and other such hurdles, and he also discusses the carrier's ambitious growth plans for the next few years.
Gulf News: How has the regional unrest affected Qatar Airways?
Akbar Al Baker: The unrest in North Africa and the tsunami and the earthquake in Japan have impacted us by nearly four per cent as far as our load factor is concerned. This, of course, is the figure for the first three months of the year. Since April 2011, it has started to rebound. And we hope that by next month, we will be back on track.
How did this affect the airline's revenues for the first quarter?
It affected the revenue. We recorded a four per cent decline in our revenues for the quarter and around 2.8 per cent in seat factor. So that means we held our yields to some extent. We would have made a lot more profit than what we made since it was the last quarter of our financial year.
Wasn't the airline compelled to change any of its plans due to the unrest?
No, we didn't need to revise any of our plans. Qatar Airways' plans never get revised. When we establish a plan, it's a very clear goal we want to achieve and we will always stick to our plans no matter what. How we operate is we already take a cushion in our business plan to any economic or political eventualities.
You said that you expect the fuel prices to go up further in the year. So do you see that impacting Qatar Airways' airfares?
A small percentage of this will be passed on to our passengers, like any other airline would do. And a part of it, we will have to hedge like we do continuously.
For the IPO, your earlier plan was to launch it in 2012-13. Now you're saying it's going to be either in 2013 or 2014. Why so? And what percentage stake are you looking to offload?
Well, it is in that timeframe. It could be next year. With regards to the stake percentage, it is to be decided by the owners of the airline.
How confident are you about making an aircraft order announcement this summer at the Paris Air Show? Have you zeroed in to any aircraft type?
It all depends on our negotiations with both the aircraft manufacturers as well as the engine makers.
As for the aircraft type, we are interested to look positively at two aircraft types — the Airbus A320 NEO (the re-engined version of the medium-range A320) and the Bombardier C Series.
Industry analysts have been hinting that Qatar Airways is contemplating firm orders for up to 20 Airbus A380s (plus 20 optional) during the forthcoming Paris Air Show in June. Could you confirm this?
It would not be that much. But we have said we would be ordering more A380s this year. Do I see these being announced at the air show in Paris? I hope so. But I am not sure as we are still negotiating.
Now that the economy has recovered, what is the status with your plans to launch an all-business class service that you talked about a couple of years ago?
We are still thinking of it. But it will not be an all-business class airline. It would be an all-business class aircraft which we will use on certain routes where we have very high demand from premium cabin besides having an open skies agreement with that country, or we have extra frequencies. At least six countries in our network fit that category today.
Airbus has indicated there would be delays to its A350 XWB (extra wide body) programme. Does that not bother you, with Qatar Airways being the largest customer (with 80 on order) for the aircraft type?
Yes, there would be delays to the A350 XWB programme in our opinion but it doesn't concern us. Well, it affects our business plan and our fleet rollover. The only thing we will have to do is use our current aircraft for a bit longer.
Will you consider any Boeing aircraft if there are further delays to the A350 XWBs?
No, we will not. We already have 60 Dreamliners (787s). So if there are delays we can always exercise our purchase rights.
How much have the delays to Boeing 787s cost Qatar Airways in terms of lost revenue?
Quite a significant amount — nearly hundreds of millions of dollars. Giving out these exact figures would be detrimental to our claims, if any, from Boeing. We expect to receive a pair of these aircraft [787s] in February 2012.
Could it be even earlier than that?
No. We have a stream of deliveries. The deliveries for this airplane was supposed to start and finish by 2013. Now, we are only starting in 2012. So it will rollover until 2015-2016.
Those are the aeroplanes that may be delivered to us earlier. But the first aircraft will be delivered to us when they have specified. We would receive five of these [787s] next year and there could be more provided Boeing ramps up the Charleston facility.
What is the status with your claims?
We have no claim at the moment. We settled previously. But if the delay keeps on creeping then, of course, we will claim.
How much did the airline receive in compensation?
I cannot disclose this as we have an NDA (non-disclosure agreement) with Boeing and we respect that. And they [Boeing] respect the NDAs they have with us.
Emirates has been around for a couple of decades more than Qatar Airways. What is it like to be always chasing one of the biggest international airlines in the world?
We are not chasing, we are just expanding. We have a plan, they [Emirates] have a plan. We don't need to chase them, we don't need to chase anybody. If you notice, we go to destinations they don't go to. And they also go to destinations after us — where we go. So it's not a question of chasing but a question of how we our plans and how we stick to our plans for expansion.
You have expressed intentions a number of times for Qatar Airways to launch a low cost arm. When exactly will you do that? Won't you be too late in joining the LCC bandwagon with flydubai aggressively expanding its wings?
We will not do anything that will hurt our core airline business, which is a full service airline. We will only do it if our market share is being eroded. And we will launch as soon as we see that is happening. Up until now, it is not.
Do you plan to launch any Airbus A380 services into India?
No, we never planned to launch A380 into India. I don't think the Indian aviation infrastructure will permit operations of A380.
What are your targets for A380 fleet in the long run?
Our target for the A380 is to operate to selected ultra long routes and mostly slot restricted airports.
What are your financing plans for the year?
We have no financing plan at the moment because Qatar Airways does not buy aeroplanes anymore. It is bought for Qatar Airways by our leasing arm. And the leasing arm's owner is the Qatar Investments Authority.
The future: Airline Profile
- Worldwide Network: 100 destinations
- Expansion in 2011: 15 new destinations (5 launched already)
- Fleet on Order:
80 Airbus A350s
60 Boeing 787s
12 Boeing 777s
14 Airbus A320s
5 Airbus A380-800s
1 Bombardier Global 5000
1 Bombardier XRS
1 Challenger 605
Akbar Al Baker
Instrumental in shaping the development of Qatar Airways into one of the fastest growing and most highly acclaimed airlines in the world, Akbar Al Baker, a Qatari national, is a graduate in Economics and Commerce and has worked at various levels in the Civil Aviation Directorate before assuming his role as the airline's chief executive in 1997.
Al Baker has, over the last decade, spearheaded the growth of Qatar Airways, which operated only four aircraft in a regional capacity prior to his appointment.
The airline currently flies to over 90 destinations across six continents. He is also leading the development of the multi-billion dollar New Doha International Airport, which is scheduled to open by 2012.
