MIAMI – Qatar Airways (QR) CEO, Akbar Al Baker, has said that the airline will not take delivery of aircraft for the next two years and aircraft due to be delivered within the next two to three years will be pushed back by up to ten years.
Throughout this pandemic, Qatar Airways (OR) has been a significant player across the world carrying nearly 1.8 million passengers and repatriating nearly 180,000 passengers across March, April, and May, making it the largest airline in the world for both passenger and freight during this time.
Speaking to Ian King on Sky News, Akbar Al Baker said, “We have already notified both Boeing and Airbus that we will not be taking any airplanes this year or next year, and all the other aircraft that we have on order that were supposed to be delivered to us in within the next two or three years, will now be pushed back to as long as nearly 8 to 10 years.”
What is on order?
- 12 A350-1000 still to be delivered
- 50 A321neo
- 10 777-8
- 50 777-9
- 5 777F
- 23 787-9 still to be delivered
- 30 737max
This will, naturally, cause significant headaches for both manufactures, but arguably more so for Boeing. The Boeing 777X has not been a huge seller and Qatar has the second largest order of any carrier at 60 aircraft, behind Emirates (EK), which has 150 on order.
Qatar has also canceled its entire order for 30 Boeing 737 max aircraft, explaining that the airline no longer has a need for them. Al Baker said, “we have already informed Boeing that we will have to replace them with some other type of airplane.”
His reasoning is that QR had “bought [the 737max] for a particular airline in which we had invested and we have withdrawn our investment from that airline, so we will not require any more 737max.”
The news isn’t all bleak however. Al Baker said that “as the business ramps up and the traffic increases, then we will bring forward those delayed aircraft deliveries,” which not only gives a glimmer of hope to both Boeing and Airbus but also to the airlines.
A warning to Boeing and Airbus
Al Baker did issue a stark warning to both manufactures though, saying “people should know, both of them, that if they don’t oblige to our requirements we will have to review our long-term business relationships with both of them.”
This fighting stance from Al Baker shows that he is serious and that he is going to move at his own pace, in line with what is best for the business regardless of what impact this may have on Boeing or Airbus.
Why is this decision necessary?
Qatar currently operates some routes at 30-40% capacity while others at 90-92% capacity. This significant drop in passenger numbers will account for a huge loss in revenue for the airline.
The decision also makes sense, as QR has also recently announced both staffing cuts and pay reductions to help it weather the global pandemic. The airline announced it will be cutting more than 9000 jobs, from its current 46,000 staff, totaling a fifth of its entire workforce.
Other airlines such as EasyJet (U2) and Cathay Pacific (CX) have also announced that they will be deferring aircraft delivery, so today’s news only reiterates the impact COVID-19 has had on the aviation industry.
The future looks bright
The airline is currently operating nearly 35% of its schedule, looking to increase that up to 75% over the next 4-8 weeks.
Qatar clearly sees passenger demand increasing over the next few months as countries begin to, once again, open their borders to tourists. How much growth however, is yet to be seen. Only time will tell.