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Sunday, November 29, 2020

Al Baker: Qatar Airways unlikely to cut fares amid lower profits

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Photo for illustrative purposes only.
Photo for illustrative purposes only.

As pressure mounts on Qatar Airways to open up its books and counter claims that it receives unfair government assistance, the carrier’s chief executive has cautioned that the airline’s financial performance last year fell below expectations.

The national carrier’s thin margins mean passengers shouldn’t expect to see a reduction in base fares even though oil prices are falling, CEO Akbar Al Baker said at a press conference this week, according to Arabian Business.

Akbar Al Baker during a press conference last year.
Akbar Al Baker during a press conference last year.

The statement takes a step back from a pledge Al Baker made in January to scrap the airline’s fuel surcharge. Currently, Qatar Airways website shows that the additional fee is still being levied on tickets.

Qatar Airways is owned by the state and does not disclose its financial results like publicly traded companies.

A year ago, officials said they planned to publish the airline’s 2013 profit figures, but that pledge does not appear to have been fulfilled.

This week, Al Baker said he would release the airline’s financial results for its last fiscal year, which ended on March 31. Speaking at the Arabian Travel Market trade show in Dubai yesterday, he said:

“I am not going to mince my words. I am going to meet the press. 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).”

He added that delays in receiving Qatar Airways’ new Airbus A380 and Boeing 787 hurt the carrier’s bottom line last year.

“Put together, the sales performance that we expected didn’t happen … our profit will be less than what I was estimating,” he said, according to The National.

Subsidy accusations

Al Baker’s remarks come as the airline, along with Gulf carriers Etihad and Emirates, fend off accusations from a coalition of US carriers that they’ve received billions of dollars in state support over the past decade.

The assistance has apparently allowed them to lower ticket prices and lure customers away from legacy carriers in the US and Europe.

Photo for illustrative purposes only.
Photo for illustrative purposes only.

These critics say Qatar Airways is “not commercially viable” without the subsidies, which have allegedly included interest-free loans that were ultimately forgiven, free land and airport fee exemptions.

The US airlines are asking American lawmakers to retaliate by restricting the Gulf carriers’ access to their market, and the Obama administration has said it would investigate the claims.

Qatar Airways has denied the accusations, but Al Baker reportedly said this week that it would take years to provide a full response to the claims.

Earlier this week, Qatar Airways announced plans to expand further into the US by introducing flights to Boston, Los Angeles and Atlanta.

However, some of these routes aren’t scheduled to begin operating for more than a year, prompting critics to speculate that the airline is accelerating its expansion plans ahead of possible US restrictions that could limit its growth.

Delta CEO a ‘bully’

Meanwhile, Al Baker continues his verbal assault on one of his biggest American critics.

Less than two months after publicly accusing Delta Air Lines of flying “crap” airplanes, Al Baker reportedly ripped into his Delta counterpart during the Arabian Travel Market conference.

“He’s just a bully. And he’s a liar … He has no dignity, he has no ethics. He has in my opinion a weak personality, and he is only hiding behind all this nonsense, misleading his government in a big way,” Al Baker said, according to Al Arabiya.

There were also some announcements of substance involving Qatar Airways at this week’s trade show, including:

  • A new daily flight to Ras Al Khaimah in the UAE, commencing Oct. 1 using an Airbus A320;
  • An agreement with Royal Air Maroc that will see the two carriers jointly operating 10 weekly flights between Doha and Casablanca and allow passengers to use a combination of flights from both airlines; and
  • A new service that expedites travel for passengers flying from Doha to Dubai. Travelers will be able to check in at dedicated counters, clear immigration in a special “fast-track” lane and board their plane through a gate in concourse A or B that’s no more than a 10-minute walk from security, the carrier said in a statement.

Separately, there were also reports that France may give Qatar Airways permission to add flights to that country. Last week, Qatar agreed to buy 24 Rafale fighter jets from French manufacturer Dassault, but French President François Hollande reportedly downplayed any connection between the two issues.

“There have been discussions in other areas with Qatar, and with other countries, regarding the allocation of air routes, but this contract concerned only the Rafale aircraft and the material that will equip it,” Hollande said in Doha this week according to Aviation Week, citing Le Monde.

Thoughts?

33 COMMENTS

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Meh
Meh
5 years ago

They’ve got to attract more customers from the local market by reducing the prices for short-haul and medium-haul flights. Case in point, a flight from Dubai/Bahrain/Abu Dhabi to my hometown costs less than half what it costs on Qatar Airways.

Chipper fluffypants
Chipper fluffypants
5 years ago
Reply to  Meh

Yep, QA wanted $600 from Doha to Saudi. I just booked a flight to the U.S. for $1,200. Why on earth would a flight to Saudi cost $600? And this was 2 months in advance!

sicti
sicti
5 years ago

Because they can

al-Lalal
al-Lalal
5 years ago

Think of exorbitant rents and school fees, QDC, Qatar Airways and Ooredoo prices, etc. as a form of taxation, so when a_qtr says that expats get tax-free money here, tell him to take a walk

Observant One
Observant One
5 years ago

Because only 2 people wanted to go to Saudi, like have you seen the place! …..so have to cover costs somehow.

Michael L
Michael L
5 years ago

A ridiculous state of affairs … the fares from Qatar are extortionate … how do they not make a profit? Clearly because they don’t charge the 80% of the customer base that lives outside Qatar enough as they want to attract volume to justify the large number of planes purchased … deeply flawed business model that provides poor value for money for citizens and expats who live here but also doesn’t turn a profit for the company. A better plan … A better future

Scarletti
Scarletti
5 years ago
Reply to  Michael L

i stopped flying Qatar Airways because their prices were so expensive, and the service second rate… the oiption was two flights not one, 3 hrs extra journey time, but with friendly staff and a business culture to match – well worth it. How on earth did QA win their awards !!!!!!

Michael L
Michael L
5 years ago
Reply to  Scarletti

I don’t know … perhaps the way they won the World Cup ? Obviously I mean through diligent strategic planning, superb networking, hard work and upholding the highest levels of integrity.

SLICK
SLICK
5 years ago
Reply to  Michael L

A few dollars Under The Table 🙂

Simon
Simon
5 years ago
Reply to  SLICK

Shame! Never!

Oh, hang on, ……….

al-Lalal
al-Lalal
5 years ago
Reply to  Michael L

A business model where rapid expansion “to gain market share” and the constant acquisition of new aircraft is the justification for annual losses is not sustainable. At some point in time Mr. Al Baker will have to face the music.

dubious
dubious
5 years ago
Reply to  Michael L

The cost penalty for using QR from Qatar is huge. We looked at meeting some friends in the Far East. Their ticket costs flying from Europe via Doha to the Far East was 12% cheaper than us getting on the same plane from Doha…

Chilidog
Chilidog
5 years ago

Wow, way to stay classy Akbar. “Crap” is certainly a more sophisticated word than “bulls___.” Any predictions on what new high-class homonym for stool he learns before his next press conference?

In other news: “Whiskey prices at QDC set to double in order to offset Qatar Airways’ poor financial performance.”

Expat77
Expat77
5 years ago
Reply to  Chilidog

While alcohol ban in incoming QA flights they compensate that via QDC where sales soar much above QA altitudes. The double standards in QA flights to Asian sectors is pathetic

Daniel Schriefer
Daniel Schriefer
5 years ago

There is always a huge difference in Qatar between what the officials ‘say’ and what they ‘do’. Get used to it. In some countries it’s called ‘lies’.

Yacine
Yacine
5 years ago

Waiting for MMIH on this 🙂

MIMH
MIMH
5 years ago
Reply to  Yacine

Not really that interested in his pronoucments but just for you…..

Not Drinking The Cool-Aid
Not Drinking The Cool-Aid
5 years ago

Qatar airways really needs to understand something; to command a higher price, offer a superior service. Although QA is nicer on board than some legacy airlines, it simply misses the mark when compared to emirates. I don’t mind paying more a better service but paying more for an inferior ‘crappy’ service where someone will somehow piss you off is not reasonable. A layover for a better and cheaper flight will make etihad and emirates more attractive to local travelers sick of the bad service. So, keep the prices high QA. You’re only incentivising us to use others.

Anonymouse
Anonymouse
5 years ago

The Delta CEO is a bully with weak ethics?? Wow, pot, kettle, black if ever there was one.

Enceladus
Enceladus
5 years ago
Reply to  Anonymouse

Hahaha Yeah… The man calling someone “A bully”. That’s even better than ” I’m not going to mince my words”

MIMH
MIMH
5 years ago

To be fair he is trying to run Qatar Airways as a business and while he has a captive market in Qatar why would be lower airfares? He has no incentive to do that with no meaningful competition. If the real figures were revealed it would show QA operating at a loss, with all things taken into account with only QDC being profitable. That might be useful for them to show the US Authorities but it still does not explain away the huge subsidies, er sorry, investments the state of Qatar gives to QA and continues to give.
As for him calling someone a bully, well I know plenty of Qataris and Expats who would level that charge at Mr Albaker. If he was CEO in Europe or North America his company would constantly be in court fighting employee cases, luckily for him employment law in Qatar is heavily stacked in his favour….

Observant One
Observant One
5 years ago
Reply to  MIMH

Albaker….Just another slaver and abuser of human rights…cant get married, cant get pregnant etc etc…..

Ivan
Ivan
5 years ago
Reply to  MIMH

Well, at least he is right about crappy Delta Airlines.

MIMH
MIMH
5 years ago
Reply to  Ivan

U.S. Airlines are crap and I wouldn’t fly on any of them but that’s a different debate

Ivan
Ivan
5 years ago
Reply to  MIMH

It’s actually connected with the debate.

Yousef
Yousef
5 years ago

be HONEST …

the STATE runs and OWNS this “airline” ( Private air taxi for the EXTRA rich royals)

OPEN your BOOKS and PLAY in a FAIR BUSINESS MARKET..

GROW SOME BALLS CEO Akbar Al Baker…if you can ??

johnny wang
johnny wang
5 years ago

They do not want to open their markets out here to free, fair and open competition but want to take the maximum benefit of the other markets like in the USA which have been built up and developed over a great period of time and perhaps this is something the other parties in the USA are not willing to accept.

DickDePilot
DickDePilot
5 years ago

How can any airline make a profit if it is injecting so much into capital outlay, unless the airline isn’t the one doing the purchasing

Skippy1111
Skippy1111
5 years ago

“A year ago, officials said they planned to publish the airline’s 2013 profit figures, but that pledge does not appear to have been fulfilled.”
That is a polite way of saying they lied : )
” He’s just a bully. And he’s a liar” – well, we know Ali is not prone to tell the truth, eg: the opening date of Hamid airport was off by a few years and the initial cost of the airport was around $6 Billion US short ( a sackable offence in any other country ) but as for being a bully – that’s not fair, all any one has to do is to google ‘ Al Baker – abuse ‘ to see what a lovely kind caring CEO this guy is.

KK
KK
5 years ago

Baker; I believe you suffer from a severe napoleonic syndrome .

kwrtravel
5 years ago

Simple – I have voted with my feet and am now using other airlines, after exclusively using Qatar Airways in the last 6 years. And yes, I have another 2 to 3 hours added to my long haul flights but when paying 25 to 30% less I can comfortably live with that; now only use Qatar airways if there is a special that gets close to the other airlines prices but even in Qatar Airways latest ” 25% off” offer Qatar airways was between 5% and 15% more expensive – so I still booked a ticket with the opposition. If Qatar Airways want to ignore these facts I will continue to ignore Qatar Airways.

Observant One
Observant One
5 years ago
Reply to  kwrtravel

Exactly. QA to Australia…1200AUD return. Emirates and Qantas 650AUD return, with 3 hour wait in Dubai….I know which one to choose….

Victoria Melbourne
Victoria Melbourne
5 years ago

How did Emirates post billions of profit?…lol

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