Qatar Airways has undergone major upheavals during its nine-year life. Starting as a low-cost charter operation in January 1994, the airline was redefined three years later as an upmarket international carrier. After initially trimming its network, Qatar Airways is expanding as the country's single flag carrier, with a dedicated cargo arm, following Qatar's withdrawal from ownership of Gulf Air.
The catalyst for the airline's reincarnation was the appointment of Akbar Al Baker as chief executive in 1996 by the Qatar government, which holds a 50% stake in the airline. Al Baker immediately cut the network from 27 destinations to 19 to enable frequencies to be increased on key routes. At the forefront of all aspects of the airline's reorganisation, Al Baker masterminded Qatar Airways' rebranding, fleet development, network development and in-flight products.
The airline's traffic has grown steadily to 2.5 million in 2002 - a 50% increase on the previous year - and it now serves 38 destinations. The network from its Doha hub comprises eight points in the Gulf (including Doha), three in Africa, six in Europe, 11 in the Indian sub-continent, six in the Middle East and four in Asia. These are served by a fleet of 21 aircraft - nine Airbus A300-600Rs, one A319 Corporate Jetliner, eight A320s and three A330-200s.
"By mid-2005, we will serve 50 destinations," says Al Baker. He adds that he is in talks with Airbus and Boeing for a "large number" of long-haul widebodies and hopes to conclude a deal in time for the Paris air show in June.
Al Baker says the fleet "will double in the next five to six years to no more than 45 aircraft, but average size will stay lower than that of our competitors". The airline plans to phase out its passenger-configured A300s by 2006, but some will be converted to freighters for the cargo arm.
Al Baker is guarded on expansion plans, but the most obvious holes in the long-haul network are Australia and North America, which may be next on the agenda. For shorter, low-demand routes from Doha, the airline has introduced the extended-range A319CJ.
The withdrawal of Qatar from Gulf Air has allowed the airline to focus on expansion. Al Baker concedes that the growth plans, which include the acquisition of 550-seat A380s in 2007 and the introduction of A300-600 Freighters later this year, means the airline will not be profitable until at least 2008.
"The state of Qatar - one of the richest countries in the world - is a shareholder, but we won't rely on government hand-outs. Managers keep an eye on performance against the long-term business plan," he says. An initial public offering is planned "as soon as we break even and are profitable for two consecutive years".
Qatar's withdrawal from Gulf Air has resulted in all bilaterals being renegotiated to record Qatar Airways as the country's only designated carrier, says Al Baker. He adds that the departure from Gulf Air "opens a lot of opportunities for Qatar Airways to all the major destinations". This will allow the airline to expand point-to-point services "in a big way", providing access to the highest yield passenger traffic.
Al Baker is angry about the pricing policy of rival Gulf carriers, saying: "There is irresponsible pricing and capacity management by some of our competitors because Qatar Airways is so aggressive in its service levels. It is so irresponsible to drop prices when there is demand."
The airline has built a strong transit business around its Doha hub, offering competitive one-stop flights between Europe and Asia. Currently, a large proportion of Qatar Airways' traffic through Doha is connecting, but the airline is working with the government to boost the city's appeal as a tourist destination. This will improve the attractive- ness of Doha to function as a stopover destination for Qatar Airways' long-haul connections.
There is much hotel construction under way in Doha to cater for the influx of tourists, but Al Baker is adamant that the country is not trying to emulate the tourist growth being targeted by rival Dubai. "We are aiming for quality tourism in Qatar," he says.
The airline is taking control of the state-run Qatar National Hotel Company and is eyeing opportunities for additional hotel acquisitions overseas. This is linked to the airline's Qatar Holidays division, which is selling overseas vacations for Qatar nationals, and developing the local tourist industry.
Al Baker has overseen refurbishment of the terminal at Doha Inter- national Airport and is tasked with masterminding the construction of the city's new airport, due to open in 2006-7.
Source: Flight International
