Issue 375: A Decade On

Akbar Al Baker outlined his satisfaction with the current business in Australia. “We keep on increasing our capacity to Australia. And yes, we are planning more destinations in Australia, but we are restricted by our traffic rights“, Al Baker said, meaning capacity increases to Australia will be achieved by using larger aircraft.

Qatar Airways‘ current Australia program includes double daily services from Doha to Sydney with Airbus A350-1000 and A380. The A350-1000 uses Sydney as a stop to continue to serve Canberra. Melbourne also sees a daily A380 service, and Adelaide will receive a capacity increase from the current A350-900 to the larger A350-1000 starting from 29 March 2020. Also the current daily Doha-Perth Boeing 777-300ER service will be upgraded with Qatar´s A380 starting 13 December 2019, representing a 44% lift in capacity on this route. However, the A380 future within Qatar Airways and to Australia is limited. The Oneworld Alliance member and in partnership with Qantas, plans to phase out the Airbus A380 from 2024. The carrier received its first A380 in 2014. “I do not think there will be any market or that we will be able to sustain the operating costs of that aircraft beyond 10 years,” Al Baker said. “The aircraft is profitable when carrying full loads of passengers on point-to-point flights,” he said, but more than 80% of the carrier’s passengers make connecting flights at its Doha hub, which results in lower yields. In addition, he said, “when we bought the A380, the price of oil was $30 to $40 a barrel, so it was a good aircraft. But not today.”

‘Capacity increases to Australia will be achieved by using larger aircraft’

An ideal aircraft to serve the Australian market would be the Boeing 777X, however “Boeing has already stated that it will be delayed until 2021. But I was not expecting that it was delayed by that much“, he said. In March, Al Baker anticipated that deliveries of the Boeing 777X would be on time and hoped the airline would be the first to fly the new long-haul aircraft. Deliveries where expected to begin in 2020. Asking which consequences this delay might have on Qatar Airways‘ ambitious fleet plans, he said, “nothing, these aircraft to replace our fleet, we want to keep on growing but making sure that we are not growing our emissions, so this is why we are investing in state-of-the-art aircraft“. The airline has 50 777-9s and 10 777-8s on order. Qatar Airways’ 777Xs will offer an upgraded QSuite business class cabin and a new economy class experience, Al Baker said. “What we have to do is continue our 777 fleet a bit longer instead of retiring them from our fleet.”

‘Every one of our more than 300 daily flights needs 20 minutes additional flying time for each sector’

Akbar Al Baker
The Doha hub

All flights from Australia arrive at Doha’s Hamad International Airport (HIA) in the early morning hours, and one Sydney flight shortly after midnight, where more than 160 destinations connect with Qatar Airways‘ fleet of 250 aircraft. Qatar Airways is of course targeting the lucrative Australian-London/UK market. “Because we are a hub, we are not any different than Singapore or Frankfurt,” Al Baker downplayed the state-of-the-art infrastructure. HIA also has expansion plans and Al Baker said the airport’s capacity will eventually be capped at 70 million passengers annually. Expansion of HIA will take place in two phases, the airport announced on 23 October. The first will consist of the central concourse linking Concourses D and E. Construction will begin by early 2020 and will increase annual capacity from the current 30 million passengers to more than 53 million by 2022. The second phase will extend concourses D and E. “After 2022, we will expand capacity to 70 million passengers and then we stop there, because this is the size we need for the country,” Al Baker said. “Why spend more on the infrastructure? You don’t need more than this. You have to use your infrastructure efficiently with two runways. And we have the same number of passengers as London Heathrow.“

Interestingly, old Doha International Airport, which ceased commercial operations in 2014, will reopen to accommodate the additional traffic expected when Qatar hosts the 2022 World Cup. “This will deliver another 10 million passengers. In 2020 and 2021 the airport will get a full refurbishment. We only have to do the upkeep and overhaul of systems, which are already there, to update them to HIA standards.” The airport closed when Doha’s Hamad International Airport, which Qatar Airways operates, opened in 2014.

Overcapacity

Traffic-flows between Australia and Europe have significantly changed in the last years and are now dominated by the carriers from the Gulf. Hubs like Singapore or Bangkok still play a role on the Kangaroo Route. “I dont think there is overcapacity on routes to Australia. I belief this is a very big growing market and we see there is opportunity to grow“, Al Baker said. However Qatar Airways continues to face higher operational costs as a result of airspace restrictions around Qatar. The country and four of its neighbors—Saudi Arabia, the UAE, Bahrain and Egypt—have been at diplomatic loggerheads since June 2017, a dispute that has seen the Qatari flag carrier barred from the four nations’ airspace. This also has some consequences on the Doha-Australian routes, as Qatar Airways has to fly first to Oman airspace before heading to Australia, requiring a diversion around the Arabian Peninsula instead taking the advantage of the direct route. “On average, every one of our more than 300 daily flights needs 20 minutes additional flying time for each sector,” Al Baker said.

Onboard experience

In response, and to reduce the weight of its aircraft further, Qatar Airways has eliminated duty-free goods from all flights, including Australia. “We have seen zero effect for taking duty-free out of the aircraft. We were making a profit, but the profit was only half of the fuel burn we were facing,” he said. “We feel that we are saving around $10 million in fuel costs over a year by not offering duty-free goods on board our fleet.” Eliminating duty-free also frees up space on aircraft. “When there is duty-free on the aircraft, we have to reduce the passenger offering as the duty-free occupies the space of items that we need to enhance the travel experience,” he said. “Everything duty-free is offered at Doha’s Hamad International Airport, so there is no point in carrying,“ Al Baker said.

On the aircraft itself, Qsuite, a patented Qatar Airways product, features the industry’s first-ever double bed in business class, as well as privacy panels that stow away, allowing passengers in adjoining seats to create their own private room, a first of its kind in the industry. Oryx One, Qatar Airways’ inflight entertainment system offers passengers up to 4,000 entertainment options from the latest blockbuster movies, TV box sets, music, games etc. And the airline continues adding new aircraft to its fleet. Recently, it took delivery of two Airbus A350s on the same day.