The biannual Paris Air Show is currently underway in Le Bourget but while Qatar Airways may have a big presence at what is the world’s largest aviation exhibition, the Gulf carrier hasn’t come with any new products or announcements to show off at this year’s event.
That, however, hasn’t stopped the airline’s colourful chief executive, Akbar Al Baker stealing the limelight with comments that are quite typically blunt and no holds barred.
The big ticket news that Baker wanted to share was a plan to make a further airline investment at some point this year. Qatar Airways already has investments in Europe’s IAG which owns British Airways and Iberia, as well as stakes in Latin America’s Latam, Cathay Pacific and China Southern Airlines.
Qatar’s investment in Air Italy has proved most controversial as some critics say the airline is using the Italian carrier as a proxy to expand into North America (a charge that is strongly denied by both Qatar Airways and Air Italy). A plan to invest in American Airlines was dropped in 2018 after the world’s largest airline spurned Qatar’s interest – instead, Baker opted to invest in US-based private jet company, JetSuite.
Baker isn’t willing to say what new airline he hopes to invest in but says in an interview with Bloomberg that it will be a “2019 story” hinting that we should get a formal announcement in the coming months. He has, however, poured cold water on the prospect tof aking a stake in an Indian airline, citing red tape and “vested interests” for delaying any investment in the country.
The Saudi-led blockade on Qatar
Since Saudi Arabia started a regional blockade on Qatar in June 2017, Baker has cited the “illegal” action as being one of the primary reasons for recent financial woes. Qatar was forced to drop flights to 18 destinations after the Saudi’s accused Qatar of promoting terrorism in the region. Qatar Airways now has to fly longer routes due to air space restrictions and has opened new routes at significant cost.
In fact, Baker even claims relations between the two sides have “got even worse”.
But now Baker is changing his tune and now believes the Saudi-led blockade has “achieved nothing” – instead, he puts losses down to an economic slowdown which is affecting the entire Gulf region. He claims both Emirates and Etihad Airways are feeling the “pinch” and are shrinking because of the regional slowdown.
“We are business as usual,” he claimed. “The airline is growing, Qatar’s GDP is robust and growing, our credit rating is still the same, Qatar Airways is investing. The world has woken up to realize that this is all rubbish, our country is not part of anything we are accused of,” he continued.
Geopolitical tensions
Looking to the future, Baker also believes his airline can weather worsening geopolitical tensions – both regionally and further afield. “Every slowdown has opportunities and it’s my duty to find them,” Baker claimed. “If there is tension between east and west we still have north and south to sell. We can always re-position our businesses.’
Baker has a habit of shooting from the hip when speaking to journalists and sometimes what he says has to be taken with a pinch of salt. Clearly, it’s Baker’s duty to talk up his airline, although it’s a little hard to believe that the Saudi-led blockade isn’t having any financial impact on Qatar Airways. Airport expansion at Qatar’s Doha hub was recently put on the back burner, so it seems clear that the airline isn’t growing at the pace it had previously envisioned.
Despite making a loss of $69 million in 2017, it looks like Qatar Airways and its government backers still have very deep pockets so another airline investment and further expansion seems more than likely.
