MIAMI — Qatar’s CEO Akbar Al Baker said that the carrier will begin to pursue closer ties with fellow oneworld powers on Tuesday. The carrier will open profit-sharing partnerships with fellow OneWorld alliance members British Airways and Cathay Pacific. Qatar’s CEO, Akbar Al Baker, says “it’s [a joint venture’s] not only revenue-sharing. It’s revenue-sharing and [it’s] loss sharing.” Qatar Airways became the first and only Gulf airline to join a global airline alliance, after joining oneworld in October 2013.
The first step of that process is set to begin in late March, when the carrier begins a reciprocal code share operation with oneworld member Cathay Pacific on the route between Doha and Hong Kong. The move will see Cathay Pacific launch new services to Doha, replacing one of the two existing daily flights presently offered by Qatar Airways on the route. The flight will be flown by 242-seat Airbus A330-300 aircraft (39J / 28 Y+ / 175Y). Once it launches the new route, the combined offering on Doha – Hong Kong will be as follows:
CX640/QR5801 –> DOH – HKG –> D: 0145 || A: 1440 –> 333 –> Daily
QR816/CX9200 –> DOH – HKG –> D: 0745 || A: 2045 –> 332* –> Daily
QR815/CX9201 –> HKG – DOH –> D: 0130 || A: 0530 –> 332* –> Daily
CX645/QR5800 –> HKG – DOH –> D: 1840 || A: 2250 –> 333 –> Daily
*Qatar Airways A330-200s seat 228 ( 12F / 24J / 192Y ), 260 ( 24J / 236Y ). or 272 ( 24J / 248Y ) passengers
Such a closely tied code share agreement is a likely precursor to a more in-depth joint venture (JV) partnership under antitrust immunity (ATI). For both Qatar Airways (who offers excellent connectivity to secondary European cities [for which flying via London Heathrow on British Airways requires backtracking for Cathay Pacific customers], the Middle East, and Africa) and Cathay (who has a fantastic East Asian network), the route will now have the added benefit of significant connectivity on either end. It also frees up a valuable A330-200 aircraft for Qatar to feed its breathtaking pace of network growth.
Even as Qatar moves into a formal alliance, other Gulf carriers have developed revenue-share programs and purchased equity stakes in other carriers. Al Baker has said that Qatar has received several requests for proposals (RFPs) for equity stakes in European carriers, but he did not elaborate on this topic.
Etihad has developed a so-called “equity alliance” by purchasing minority shares in Virgin Australia, Air Berlin, Air Seychelles, Air Arabia, and Jet Airways and code sharing with these carriers (and using them to feed Abu Dhabi). And Etihad is positioned to increase these sources of connecting feed, as it is in discussions to purchase an equity stake in Alitalia.
Emirates notably has a revenue-share program with Qantas that superseded the latter carrier’s longstanding joint venture partnership with British Airways on the so-called Kangaroo route between Europe and Australia/New Zealand.
The lost ties between Qantas and British Airways are likely a significant inducement for the latter to partner with Qatar. British Airways has already shifted its top products (Airbus A380 and Boeing 777-300ER) onto the Kangaroo route via Singapore (A380 on the Heathrow-Singapore leg).
Bracketing this aggressive action with a Qatar Airways partnership would only raise the pressure on financially beleaguered Qantas, who is rumored to be cancelling its flagship A380 services to London Heathrow and ceding the route to Emirates entirely.
JV partnerships have proven to be the primary positive outcome of membership in global alliances, as Star Alliance suffered from having too many carriers, SkyTeam was roiled by Delta’s by-and-large rejection of the alliance, and oneworld carriers struggled through a spate of financial ailments.
In the US, JV partnerships such as those between Delta and Air France KLM or American and Japan Airlines are extremely lucrative, allowing the carriers to coordinate planning and marketing. By joining new JVs in oneworld, Qatar Airways is giving itself a new and potentially lucrative revenue stream.