Qatar Airways Group CEO Akbar Al Baker does not expect to return to profit in the next two or three years as the COVID-19 pandemic is sure to create uncertainty for several years to come, Al Baker said on an Aviation Week webinar July 21.
“It is painful to see that what we have built up since 1997—a fleet of more than 250 aircraft—half of our fleet is grounded. We have had to lay off so many employees who have worked so hard for us. It is the darkest period for our airline,” Al Baker said.
He said it is just a matter of time when air traffic will recover globally, but he also knows that the future looks very bleak for the next two to three years. “Especially for a long-haul airline like Qatar Airways; we have no domestic market,” the CEO said.
Al Baker said he considered grounding the airline completely, like many others worldwide, “but my business focus did not allow it. I wanted to continue, to take the risk; we had to take a huge gamble.”
But in times of a crisis, there is always some light and he said Qatar Airways began to react proactively. “We targeted the light. In April, May and June Qatar Airways has been the largest carrier operating to 70 destinations.”
Al Baker said Qatar Airways became the first airline to use grounded passenger aircraft to carry cargo-only flights in the belly of the aircraft and on the main decks. However, he said his airline never reconfigured a passenger aircraft by removing seats, which he said incurred costs.
Restoring the business to additional destinations became challenging, as many airports had been closed. “We had huge difficulties because some countries got cold feet and postponed opening airports when passengers were already on their way,” he said.
Al Baker described the ups and downs of passenger demand like a yoyo. The carrier is trying to mitigate costs when reopening a new route while also focusing on cargo. “I’m very fortunate because main flights are positive, but not profitable. I don’t think we will make any profit in the next three years.”
Like many others, Qatar Airways, a launch customer for the Boeing 777X, also expects further delivery delays. “We are very committed to the 777X. But there will be a delay because of the uncertainty in the aviation market,” he said.
Al Baker also made clear that not all of its 10 Airbus A380s will be returning to operations. “We are considering only some of them. They will be in long-term storage and will come back maybe in a year to a year-and-a-half,” he said.
The airline will concentrate on utilizing its the A350s and 787s, and the 777X from 2022 onward. Beginning in 2022, the oneworld member plans to start taking delivery of A321neos, which will be the backbone of its narrowbody fleet.
Not Afraid To Walk Away From Airbus Or Boeing
“We are not preparing any cancellations of our orders,” Al Baker told Aviation Week. “What we have done is pushed back deliveries like all the other airlines in the world have done.”
He said it would be a very bad idea for both Airbus and Boeing to mistreat Qatar Airways. “We have proven to them we are a [valuable] customer and they have to address all our requirements and problems.”
Al Baker made clear that Qatar Airways is very robust and would not hesitate to walk away from any of the manufacturers “if they don’t comply or address the demands of a big customer like Qatar Airways.”
He said both manufacturers love an airline that aims to keep its fleet young, operating the most modern and fuel-efficient airplanes. “We are always their first choice when they launch a new program, because they know we always want to have the best product on the market.”
Al Baker does not expect demand will reach 2019 levels for the next three to five years, but people will travel. “Now with the reduction of global capacity, in my opinion there will be a shortage of capacity in the near term and then there will be demand.”
Asked how he sees the further development of airline consolidation, Al Baker said he believes “there will be not many airlines left for consolidation if there is a second spike.”
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