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‘No plans’ to lower Qatar Airways fares as oil prices fall

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Akbar Al Baker at the launch of A350 services to the USA in December 2015
Akbar Al Baker at the launch of A350 services to the USA in December 2015

This story was edited at 1700 on February 10th to add details of the Qatar Airways fuel surcharge

Qatar Airways will not be reducing ticket prices despite falling fuel costs and even though the airline made “a good profit” this year, CEO Akbar Al Baker has said.

In an interview with Newsweek Middle East, Al Baker acknowledged that the carrier’s fuel prices have dropped, but said that no changes would be made to basic fares.

“We will make a good profit (this year), better than last year. Don’t forget my last year’s oil (price) was at $130 (a barrel).”

Since then, oil prices have dipped as low as $27 a barrel, and are now hovering around $30.

Fuel surcharge

Al Baker said that Qatar Airways (QR) had not increased its fares when fuel prices had gone up, and he denied that the airline received a government subsidy on fuel, despite the fact that the airline is government-owned.

He added that the airline was “one of the highest fuel-paying businesses in Doha.”

Though prices will not be changed in the future, Al Baker said that Qatar’s national carrier had recently removed its fuel surcharge entirely from fares.

“Actually there was a fuel surcharge that we used to charge as part of the ticket and we erased that,” he told Newsweek.

However, the current price breakdown of tickets available to book on the airline’s website clearly shows that a fuel charge remains in place.

A return economy flight from Doha to London Heathrow in March would pay QR300 in fuel surcharge, according to the website.

The airline announced plans to reduce the surcharge in January last year, but it declined to give details of the amount of the reduction, or when it would be put in place.

Qatar Airways has not yet responded to our request for more details about the fuel surcharge.

Acquisitions

Al Baker has also ruled out plans to sell shares in the company for now, although he suggested that there might be room for an initial public offering (IPO) in 10 years’ time, “in both regional and international markets.”

He also laid out plans to acquire shares in two other airlines, following the carrier’s $1.7 billion purchase of 10 percent of British Airways and Iberia owner International Airlines Group (IAG) last year.

One of these is Royal Air Maroc, a move that he first spoke about in October.

A Royal Air Maroc Boeing 767
A Royal Air Maroc Boeing 767

He declined to name the other airline, simply stating that it was “a big one.”

Meanwhile, Italian airline Meridiana announced last week that it had agreed to a deal that could see Qatar Airways buying up to half of the company in the first half of this year.

However, given the company’s small size – it’s Italy’s fourth largest airline – it seems unlikely to be the “big one” hinted at by Al Baker.

Whatever the identity of the carrier, is it unlikely to be another from Europe.

Last November, Al Baker told journalists at the Dubai Air Show that he wasn’t keen on dealing with airlines whose employees were unionized.

“I don’t want to go and work in a climate with so much employee control on the company,” he said.

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