Where is Qatar’s aviation flying now?
By Theodore Karasik and Madison Taylor
Since the events last year when Saudi Arabia, the United Arab Emirates, Bahrain, Egypt, Libya, and the Maldives cut ties with Qatar, a boycott of Qatari aircraft in these countries has caused Qatar Airways great losses for last year.
After losing several destinations, and costlier routes avoiding these air spaces, the airline lost twenty percent of its revenue. Chief executive Akbar Al Baker explained the longer routes required extra fuel and maintenance, driving costs up.
In response, the airline has announced it will add sixteen new international destinations. These include Germany, London, Portugal, Estonia, Malta, Philippines, Malaysia, Vietnam, Turkey, Greece, and Spain.
This expanded market could help the airline gain revenue and increase its global influence to the level of its notable rival airline, Emirates. These ambitious new goals look to help compensate for losses through new large markets of potential customers.
This response is not surprising. After American-based airlines such as Delta, United, and has American accused Qatar Airways of having an unfair advantage with heavy government subsidies, the airline responded by adding new routes to the states.
After failure to acquire American Airlines stock, Qatar Airways was able to acquire 9.6 percent of Cathy Pacific stake. Recently, the airline also acquired stake in Meridiana, soon to be named Air Italy. Most recently, Qatar Airways announced an agreement with Russia to purchase a 25 percent share in Moscow’s Vnukovo airport.
The airport is the third busiest in the country and will allow the airline to compensate from regional losses. This move by Qatar follows on a series of Russian investments by Doha.
In 2016, the Qatar Investment Authority purchased 25 percent of the St. Petersburg airport and later purchased a 19.5 percent stake in the state-owned oil company Rosneft. Around the world, the airline is steadily been acquiring more international influence with powerful states to make up for neighboring boycotts.
Now, with the added routes after the blockade, Qatar will challenge many Emirates destinations. The airline is finding other ways to compensate for major destination losses and ways to stay competitive in the international market.
For example, Qatar Airlines have recently cut prices at a significant rate for sales. Another notable move is their changes to the A350-1000 aircrafts with comfort features installed to reduce jet lag.
The innovations include quieter engines, comfier seating, better cabin-pressure controls, temperature and air filter improvements, and new ambient lighting. Moreover, the airline is adding business class suites, called QSuites, to United States routes.
These top of the line suites, that include luxurious privacy and comfort features, could attract customers that would otherwise fly different airlines for these unique attributes.
Despite moves to increase global influence and market to new customers, Qatar Airways will still have a two-front battle ahead. American-based airlines and its neighboring competitors such as Emirates could still push for more action against the airline.
However, Emirates also faces challenges with received criticism from American-based airlines for subsidies from the UAE government.
In addition, though the UAE government also lost a major airline hub spot when Qantas dropped Dubai in favor of a direct Singapore route, Emirates extended a lucrative agreement with Qantas by five years.
If the states and airlines in the GCC and the US continue to pressure Qatar and its flagship airline, the airline might be forced to use more state-funding to compensate for additional costs.
The current fiscal year and its successes or failures for the airline will be critical to analyze how both the country and business can adapt to such international pressures, either through expansion, innovation, or both.