Qatar Airways chief ready to take US airlines to task

'Ours is not subsidy. Ours is a proper government equity in a company that is owned by the sovereign fund of my country. So what’s the problem?'
Qatar Airways chief executive Akbar Al Baker, right, with Royal Air Maroc chairman Driss Benhima during the announcement of the two carriers' commercial partnership at the Arabian Travel Market in Dubai. Antonie Robertson / The National
Qatar Airways chief executive Akbar Al Baker, right, with Royal Air Maroc chairman Driss Benhima during the announcement of the two carriers' commercial partnership at the Arabian Travel Market in Dubai. Antonie Robertson / The National

The Qatar Airways chief executive Akbar Al Baker yesterday promised to travel to America to confront US airlines trying to curb the expansion of their Arabian Gulf rivals, where he planned to open up the books, even as he warned that profits for last year would be lower than expected, hit by delays in aircraft deliveries.

“I am not going to mince my words. I am going to meet the press,” he said. “I am going to meet with government officials next week, but after that I am going to open the books and confront them [US carriers].”

The major US airlines Delta, United and American, and their unions, have claimed in a 55-page dossier sent to government officials and policymakers that Gulf carriers have received US$40 billion in subsidies and have called on the Obama administration to renegotiate open skies agreements.

In March, Etihad’s chief executive James Hogan and the Emirates president Tim Clark were both in Washington to hit back at the claims.

Mr Al Baker, speaking at the Arabian Travel Market event in Dubai, said that US airlines were “all bankrupt”.

“Ours is not subsidy,” he said. “Ours is a proper government equity in a company that is owned by the sovereign fund of my country. So what’s the problem?

“I want to say in very clear terms that [Delta chief executive] Richard Anderson is not a patriot of his country, because what he is doing is stifling the interest of the travelling public in the United States.”

Mr Al Baker said he did not think the US government would ultimately respond to the claims by its carriers, pointing to the bigger economic picture and the number of jobs created by aircraft orders from Gulf airlines.

A delay in the delivery of A380 superjumbo and 787 Dreamliner aircraft will lower profits for last year, Mr Al Baker said.

“Due to the delay of the four [Airbus] A380s, it was nearly six months delayed when we were talking to Airbus about the quality of the product,” he said. “At the same time, we had delays on the [Boeing] 787s again due to quality issues, so this is put together, the sales performance that we expected didn’t happen – so our profit will be less what I have estimated.”

The airline’s financial year runs to March 31.

However, the carrier is planning “aggressive” expansion this year, after adding 12 routes last year, with more acquisitions on the radar, particularly in India.

“We will look at holding equity in other airlines,” Mr Al Baker said. “Why I always talk about IndiGo is because it is the best run, most successful Indian carrier. If there is any opportunity for taking an equity stake in Indigo, we will be very interested.”

In January, Qatar Airways took an almost 10 per cent stake in International Consolidated Airlines Group (IAG), the parent of British Airways, and it has been tracking a possible investment in the fast-growing budget Indian carrier IndiGo for some time to help it expand capacity to the subcontinent.

Qatar Airways has ordered a total of 14 superjumbos and 62 787s.

Its first A380 was delivered last September after several months of delays over the quality of cabin fittings.

The airline’s website says it currently has four of the planes in service.

Qatar Airways is vying with other Gulf airlines including Emirates and Etihad to showcase innovative and luxury features inside the superjumbo.

Qatar operates 21 Boeing 787s with a further 41 on order, according to its website.

Its total fleet consists of over 150 aircraft and it has more than 340 on order.

“Our aircraft is the latest of what you can expect. We were the first operators of the 787. We are the first operator of the A350. We will be the only operator for a period of time on the A320neos that will be delivered to us between September and October this year,” Mr Al Baker said.

However, he warned Airbus that it needed to improve the efficiency of its superjumbo to compete with US rival Boeing.

“This airplane has very big potential, but Airbus has to put their hands in their pocket and take this aircraft a step higher. If this aircraft can perform between 10 per cent to 15 per cent better fuel burn, then this aircraft is really a killer for the airlines,” he said.

“I don’t know if Airbus will be able to do it. I know from them that they are very keen to look into this. I know that Tim [Clark] has promised them [they will order] more A380s. There is a possibility that he will replace his current fleet with the re-engined A380s if it comes into the market.

He said that unless Airbus “goes a step higher” then the Boeing 777X, of which Qatar Airways has 100 on order, will become “the backbone of a lot of major airlines”.

selgazzar@thenational.ae

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Published: May 6, 2015 04:00 AM

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