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Reaching for the cutting edge

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Reaching for the cutting edge

Reaching for the cutting edge
June 14
16:12 2016

Published in February 2015 issue

Qatar Airways began flying in 1994 as a small carrier serving a handful of routes in the Gulf region, using Airbus A310s and Boeing 727s. In 1997, the airline re-launched with the mandate to become a leading global carrier with the highest standards of service and excellence.

By Chris Sloan and Benet J. Wilson

At the time of his appointment in 1997, Group Chief Executive Akbar Al Baker took that mandate to heart, despite not being taken seriously by the airline industry at the time. Since then, Qatar Airways (QR) has become one of the fastest-growing carriers in the world. In April 2011, the airline reached the milestone of covering 100 destinations in its global routes and, in October of the same year, it took delivery of its 100th aircraft. Seventeen years later, Al Baker has created exactly what he promised. In an exclusive interview with Airways, he outlined the carrier’s expanding route network, its fleet plans and challenges, and its ongoing quest to retain its status as a five-star passenger carrier.

“It is extremely satisfying to be a leader for my country’s national airline,” said Al Baker. “Not only are we flying the flag of Qatar to all corners of the globe, with 139 aircraft to 145 destinations, but we are now a proud member of the oneworld global alliance, having been nominated to join in 2012,” he noted. “We connect the world to Doha and, as a strategic connector, we see ourselves as a business enabler, bridging families, friends, businesses and destinations. I believe that, to any of our critics from 17 years ago, the fact that we have been experiencing double-digit growth every year speaks for itself,” he said.

YEAR OF THE FLEET

The carrier began upgrading its fleet at the 2011 Dubai Air Show, where it placed firm orders and options for 90 aircraft— 80 Airbus A320neos, eight A380-800s and two Boeing 777 freighters. Two years later, at the same air show, it ordered a mix of 60 more aircraft, including Boeing 777X and Airbus A330 freighters. And, at the 2013 Farnborough Air Show, Qatar Airways ordered 100 Boeing 777Xs.

Qatar declared 2014 to be the `Year of the Fleet.’ “Quite simply, 2014 has been a year of exponential fleet growth. Our fleet has now expanded to 140 aircraft, with deliveries taking place on a weekly basis,” said Al Baker. “[The week of October 27,] we received two Boeing 787s and one Boeing 777, all in one afternoon. [This is] something truly quite unique in the aviation sector today and the first time it has happened in our own short history,” he proudly noted.

QR is significantly investing in its fleet, with more than 340 additional aircraft, worth more than US$70 billion, on order, including 80 Airbus A350XWBs, of which it is the global launch customer. “This aircraft will be the world’s most advanced, incorporating aviation’s latest technology. Our Doha-Frankfurt route will start in January, shortly after delivery,” said Al Baker.

Scott Hamilton is the owner of Seattlebased aviation consultancy Leeham Co., which focuses on the big four airframe and engine manufacturers. He observed that the underlying premise of the fleet questions is the presupposition that the business models of the Gulf three, comprised of Qatar, Etihad, and Emirates, are the same or so substantially similar as to require similar fleet decisions. Qatar’s competitors do not necessarily share the exact same business model.

QR’s business model pursues smaller and alternative business markets, and some shorter-haul routes than some of its rivals, and has shown to be willing to join alliances. “Once you look at the various business models, the fleet planning is appropriate for each,” said Hamilton. “Qatar’s acquisition of a smaller number of A380s is appropriate for its model. It has said it may acquire more.”

Hamilton also claims that he sees nothing wrong with QR’s order of the A350 XWB. “The future deliveries are scheduled to provide growth and replace aging airplanes, [so it] makes sense,” he said.

Hamilton noted that, of QR’s backlog of 340 aircraft on order, some will replace older aircraft. The airline said that its average fleet age is less than five years.

The airline’s significant investment in 80 A350XWB aircraft has been made to directly complement growing demand for medium-haul, thin routes, according to Al Baker. “Doha is uniquely placed in the Middle East region as a connector between the East and West and, typically, many of our flights operate within this timeframe,” he said. “When operating on a global scale, no airline can rely solely on one wide-body aircraft type to deliver peak performance for each destination on which it operates. For optimal performance, it is crucial to have the right mix of the latest and most modern aircraft in the skies, to ensure and complement the five-star offering for which we are world renowned for.”

In response to a question about aircraft delivery delays by Airbus and Boeing, Al Baker admits that it is no secret that he is tough on his manufacturing partners. “But this is not a oneway street, as we are also tough on ourselves. That is how we deliver our five-star service to passengers,” he said. “Despite the obvious inconvenience for the airline of aircraft delivery delays, it is also important to factor in that this significantly impacts our business planning models. A delay of one or two months, maybe, but longer delays cost us as an airline, impacting on our route planning, frequency upgrades and capacity increases.”

But, however great the cost, under no circumstances would Qatar Airways accept a product that it did not believe to be perfect in every detail, Al Baker stated. “We do not expect our passengers to settle for anything less and, as such, we do not ourselves,” he said.

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MAKING DOHA A STRATEGIC HUB

The industry has always compared Qatar with its regional rivals, Etihad and Emirates. The comparison is understandable because the Middle East, as a region, is a strategic global aviation hub, connecting east-to-west traffic flows. Qatar feels they have an advantage in this competitive arena.

“Our focus is to deliver five-star service, value for the money spent, and a level of class that I do not think you will find among other airlines. We deliver a unique and genuine flavor of Arabian hospitality,” claims Al Baker. “In doing this, and matching it with a world-class airport, which is a destination in its own right, and one of the world’s most advanced and modern fleets, I believe we naturally become the airline of choice when it comes to the traveling public,” he said.

The opening of Hamad International Airport (DOH/OTHH) this year was also a real game changer for the airline in terms of its customer offering, explained Al Baker. “The airport is a unique destination, featuring world-class shopping facilities, museum installations, a spa, Japanese gardens, a gym, swimming pool and even squash courts, all available for use by passengers traveling airside and who may wish to do something different during their layover. We thought of every detail—and put the passenger experience first,” he noted.

The airport was originally supposed to open in 2009, but didn’t open until May 2014. “There was a delay in opening, this is true, but the reason behind this was that, rather than progressing with a phased approach to opening, we decided to merge the first phases of building work into one, thereby increasing our operational capacity,” said the airline’s chief.

QR has made no secret of extending its five-star service from the airplane to the airport, raising the bar in terms of passenger experience. Thanks to its world-class amenities, Hamad is now competitive with some of the world’s best airports as ranked by Skytrax, including Singapore’s Changi, South Korea’s Incheon, Hong Kong International, Vancouver International and London Heathrow.

The new airport will allow the airline to better compete for premium cabin passengers. The former Doha International Airport required most passengers to board and deplane without a jet bridge, directly onto the ramp, and ride a bus to and from their aircraft. This type of passenger experience, while common in some parts of the world, can be a significant turn-off for Western business travelers and, accordingly, the new airport, with plenty of jet bridges, should boost the airline’s business and First Class traffic loads.

The opening of Hamad was a moment of great symbolic pride for QR, said Al Baker. “The airport has already distinguished itself as a world-class airport and a key hub for the Middle East, and it ensures that all passengers have a seamless and hassle-free journey,” he said. “Qatar Airways’ growth over recent years has superseded many expectations and we required a world-class hub that offered a five-star transfer experience from the moment of opening. And, judging by the reaction from all of the passengers who visit or transfer through the airport, that is exactly what we have achieved.”

To that end, Qatar Airways has launched 12 routes so far in 2014, including: Sharjah; Dubai; Philadelphia; Istanbul; Edinburgh, Scotland; and Dallas/Fort Worth. It has also announced service to Eritrea, along with Bangkok on the A380 and Frankfurt as its first A350 route.


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CONFRONTING THE COMPETITION

Henry Harteveldt, a travel industry analyst and advisor for the Atmosphere Research Group, has spoken extensively about the airline passenger experience. He considers QR to be a world-class airline.

“Its investment at the [old] Doha [airport] Premium terminal was inspiring, because it was the first airline to create a standalone facility for First and Business Class passengers,” said Harteveldt. “They clearly invest a lot in their onboard services in their Premium cabins, including their meal service, wines, and inflight entertainment.”

QR does not offer some of the more over-the-top frills of its competition, but the gap is not a big one, said Harteveldt. “It’s not that Qatar has omitted anything. It’s just that the other two invest at higher levels for certain amenities,” he added. “It doesn’t have the apartment or the showers and that’s OK. They’re also focused on being a good business,” he concluded.

There is no question that QR, along with its two competitors and their ongoing investment, have forced airlines in Europe and Asia to re-examine their passenger experience and invest in everything from websites to airport lounges to the onboard experience, noted Harteveldt. “Qatar’s five-star service, its Boeing 777 lie-flat seats, great IFE and exemplary customer service are having a significant impact on European and Asian airlines,” he claimed.

But there is one opportunity that QR and its two Gulf competitors are missing out on, highlights Harteveldt. “None of them offer a Premium Economy or more legroom product, and they should cater to a customer who wants a product that is between Economy and Business Class,” he said. “I understand wanting to protect against dilution from Business Class, but maybe it’s something that could be offered in the future.”

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THE BEST PASSENGER EXPERIENCE

As part of its need to offer the very best passenger experience, Qatar has been very particular about the interiors of its aircraft, pushing to go beyond the products available in both manufacturers’ set catalogs for aircraft interiors.

“QR is world renowned for delivering an exceptional five-star service to all of its passengers, no matter in what class they travel. As such, it is with a sound expectation of the level of the standards that we provide our passengers that our partners, such as Boeing and Airbus, meet with us on any new aircraft fitting,” said Al Baker. “We aim to provide luxury in the skies, ensuring that a passenger’s holiday or leisure trip starts the moment they step onto one of our aircraft.”

For those traveling in business, having the right surroundings and space to work is a must, supported by the airline’s inflight service and modern necessities, such as inflight WiFi. “We make sure that our interiors provide the máximum level of comfort and entertainment that makes the passengers’ journey enjoyable,” he said.

By close collaboration with those that craft the interiors of the carrier’s aircraft and scrupulous attention to detail, it can achieve truly magnificent results, said Al Baker. “This is why this year we were awarded both World’s Best Business Class and World’s Best Business Class Airline Lounge for the second year consecutively and Best Airline in the Middle East for the eighth time by Skytrax,” he said.

As part of its business strategy, the airline made the decision to phase out First Class in all new aircraft being delivered, with the exception of the new A380 First Class service. “As an airline, we are conscious of the factors that will make each route successful. The operating aircraft has a significant rôle to play in that aspect, and even before the economic turmoil of recent years around the globe, we made the decision to offer only Business and Economy classes, except on regional routes, where we still operate most flights in a two-class configuration of first and economy classes,” Al Baker said.

However, First Class is still an important offering on the A380 and, this year, the airline showcased its new luxury First Class seats, which form part of the aircraft’s tri-class configuration. “This new First Class seat features a 90-inch pitch and transforms into a fully flat bed, together with an expansive choice of entertainment options displayed on individual 26-inch television screens,” he said. Harteveldt agreed with QR’s decision to eliminate First Class on all aircraft except for the A380. “If you can’t make a profit on a product, you shouldn’t sell it. Instead, take that real estate and reallocate it for use in Business Class or add more coach seats,” he said. “I’ve seen other airlines in Europe, Asia and North America do this, so, good for Qatar.”

With its Business Class service, QR is proud to equal or supersede the service offered in the First Class sections of most other airlines, said Al Baker. “To highlight this, this year, we launched our first all- Business Class daily service to London Heathrow, Business One, which has garnered immense popularity and drawn global attention,” he said.

Though it offers in-flight connectivity on a minor portion of its fleet, the airline has been somewhat slow to adopt broadband Internet overall, said Mary Kirby, founder and editor of the Runway Girl Network, which covers connectivity and passenger experience issues.

“I believe the carrier will soon find itself at a competitive disadvantage to both Emirates and Etihad, as the former is now offering free, or near free, connectivity on its Airbus A380s and 777s, and the latter is fitting its entire fleet with Panasonic Avionics’ Ku-band connectivity system,” said Kirby. “It’s hard to imagine how any airline will be able to hang onto their five stars in the coming years if they don’t embrace connectivity, as passengers truly expect to be able to access their email and social networks at every touch-point of the passenger experience,” she noted.

ALLIANCES AND ROUTES

Unlike its two Middle East rival airlines, Qatar decided to join a global airline alliance and chose oneworld. “We are honored to be a member of the oneworld airline alliance and I believe that such partnerships will play an increasingly important rôle in the airline industry in both the short and long-term future,” Al Baker said.

When QR was asked to join oneworld in 2012, it quite simply changed the future shape of the airline, admits Al Baker. “This Alliance connected us immediately to an elite team of the world’s leading airlines, offering our passengers a truly unique proposition for travel to all corners of the globe,” he said.

Last month, the airline celebrated its first anniversary of joining the alliance, remaining the only carrier in the Gulf region to be a member. “This unique partnership will see us strengthening our competitive offering, as we grow our fleet, while providing our passengers with the opportunity to access the world’s top Premium lounges, while collecting frequent flyer miles across the oneworld global network,” he said.

And, speaking of routes, 2014 has been a year of rapid expansión for the airline in the United States, with new routes to Dallas/ Fort Worth, Miami and Philadelphia adding to its existing network of Houston, New York, Chicago and Washington, and nearly doubling its U.S. footprint this year.

QR’s relationship with American Airlines (AA) is probably its strongest in the entire alliance, primarily because it mostly caters to passengers that AA couldn’t profitably handle, while also offering options to the proportionally small number of key AA frequent flyers and business travelers who can’t get where they need on the US-based carrier.

Most of AA’s long-haul network is isolated from competition from QR (Latin America and Europe for obvious reasons, but also East Asia because of the time advantage). And, if you look at a market like India, where American could not profitably serve the Chicago—Delhi market because of exceedingly low yields, QR allows AA customers to get to and from several Indian destinations in an easy and convenient manner. Indeed, India looms very large in the strategic plans of Qatar. In Europe, Australia, and Asia, where airlines are competing more directly with Qatar Airways, relationships are more frayed while, in Latin America, the airline is, for the moment, effectively irrelevant to LATAM.

“Having recently celebrated our first year anniversary of joining oneworld, the last year has also witnessed many new code shares with our partner airlines and, with regards to our connectivity in the United States, we recently strengthened our relationship with fellow oneworld member American Airlines, with new code share arrangements on flights across a significant part of the American network from Dallas/Fort Worth and Miami,” reveals Al Baker.

“The addition of these code shares within our oneworld network further enhances our competitive offering, while providing our passengers with a global network unrivalled among the world’s leading airlines,” he adds.

As the longest currently-serving CEO of a major airline in the world, Al Baker said there is no secret to his company’s success. “The success of Qatar Airways comes from the sheer hard work and determination of all our employees around the world, sharing the vision of delivering a five-star service to the world’s traveling public,” he stated.

“I am extremely proud to have grown Qatar Airways from a small regional airline to one of the world’s most respected and favorite global carriers. However, there is further growth and expansion ahead and I will continue to serve my country and government with dedication,” he proudly concludes.

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About Author

Chris Sloan

Chris Sloan

Aviation Journalist, TV Producer, Pursuer of First & Last Flights, Proud Miamian, Intrepid Traveler, and Did I Mention Av-Geek? I've Been Sniffing Jet Fuel Since I was 5, and running the predecessor to airwaysmag.com, Airchive, Since 2003. Now, I Sit in the Right Seat as Co-Pilot of Airways Magazine and airwaysmag.com. My favorite Airlines are National and Braniff, and My favorite Airport is Miami, L-1011 Tristar Lover. My Mantra is Lifted From Delta's Ad Campaign from the 1980s "I Love To Fly And It Shows." chris@airwaysmag.com / @airchive

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