Qatar Airways threat to quit Oneworld alliance

Qatar Airways chief executive Akbar Al Baker has threatened to create a mini-alliance within the Oneworld alliance. Fadi Al Assaad / Reuters

Bloomberg

Qatar Airways said it may seek to form a breakaway group within the Oneworld alliance, should fellow member American Airlines continue to lend its weight to a US push to curb the growth of Arabian Gulf rivals.

Qatar Airways, which joined Oneworld in 2013, won’t tolerate a situation where “conditions are no longer conducive to a fair business relationship and mutual respect”, chief executive Akbar Al Baker said.

“We don’t get bullied by anybody,” he said at a briefing in Los Angeles, where the carrier began flights from Doha on January 1. “If American does not want to work fairly with us, we will consult the others and we could form our own mini-alliance if we wanted to.”

While Mr Al Baker has said before that Qatar Airways could quit Oneworld if its partner continues to seek limits on US access for Gulf operators, he has not previously threatened to split the alliance.

The US carriers American, Delta and United all say Qatar Airways, Etihad Airways and Emirates Airline have benefited from US$42 billion in illegal aid and want air treaties revised. The Gulf airlines refute these claims.

Oneworld has 15 airline members drawn from 13 companies. A schism could become a major issue for the biggest US carrier should it involve British Airways, in which Qatar Airways has a 10 per cent stake via the UK company’s parent group IAG.

A joint venture between BA, the US carrier and IAG’s Spanish Iberia arm on North Atlantic routes took more than a decade to win regulatory clearance and is regarded as one of the most profitable in the entire airline industry.

IAG last May submitted evidence to a federal government inquiry in which it disputed the claims of US carriers, including American, saying that Gulf airlines are generally run along similar lines to competitors. The chief executive Willie Walsh has said he began making the same argument in public well before the Qatar Airways investment.

The American Airlines chief executive Doug Parker said in June that US and Gulf airlines had “agreed to disagree” and that the matter must be left to governments. He said he hoped Qatar Airways would remain within Oneworld, while describing the pact as “a marketing relationship that we view as separate from public policy”.

Qatar Airways already operates to New York, Washington, Philadelphia, Miami, Dallas and Houston, as well as Los Angeles, to be followed by Boston and Atlanta this year. Flights to Detroit are being evaluated.

Qatar Airways is progressing with plans for a “super premium” berth for business-class customers that would include more room and screening for privacy, as well as a new take on a lie-flat seat. The proprietary model, to be unveiled this year, will mark a step change in aviation, and could be sold to other airlines, although it will cost “an arm and a leg”, Mr Al Baker said.

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