I don’t need to take any lessons because actually I will teach them lessons.
-His Excellency, Akbar Al Baker
Qatar Airways has experienced a difficult year, recently reporting a $69 million loss after years of profitability. The Doha-based carrier’s business model has been upended due to geopolitical tensions between Qatar and the United Arab Emirates + Saudi Arabia. A blockade stops the airline from serving 18 regional destinations that were once bread and butter routes.
The airline responded to its sudden surplus of aircraft by loaning them out, with crew, to British Airways, during labor strikes last summer and again when BA’s 787 fleet underwent maintenance checks earlier this year. Former Qatar Airways aircraft have also been assigned to Air Italy, Qatar’s latest investment in Europe.
> Read More – Air Italy: Qatar’s Plan to Destroy Alitalia
But that aircraft surplus has become a deficit as Qatar has added 24 new routes over the last year. Al Baker told Forbes, “We don’t have any excess aircraft. As a matter of fact we are short of aircraft.” But don’t think Qatar Airways is out of the woods yet. The blockade by Qatar’s neighbors includes not only airports, but airspace. This has forced Qatar to file longer flight plans and even to utilize larger aircraft to carry more fuel. The result has been a dip in bookings.
All this, however, has not stopped Qatar Airways from investing in a number of airlines including:
- Air Italy
- International Airline Group (British Airways + Iberia)
- Cathay Pacific
“If there is an opportunity, we will make investments,” boasts Al Baker. But what about the grave of Etihad and all of its failed strategic partnerships around the world? Is Qatar taking a similar foolish gamble?
Not at all, says Al Baker. “Their strategy failed. I don’t need to take any lessons because actually I will teach them lessons.” Ah, classic Al Baker humility!
There is no denying Qatar Airways remains in a tough position. When asked about profitability this year Al Baker set expectations low. The long-term question will be if Qatar can adapt to this long-term blockade from its Gulf neighbors. Despite Al Baker’s confidence, will its strategic investments in partners actually lead to profitability? That I continue to question.
image: Qatar Airways