Why is Qatar Airways still buying planes?
Posted on 16 June 2009 with no comments from readers
Still yet to make a profit in a single year Qatar Airways continues to amaze industry observers with its aircraft orders. Yesterday out came the check book with a $1.9 billion order for 24 Airbus A320s at an otherwise recession-struck Paris Air Show.
At the same air show two years ago Qatar Airways confirmed a $16 billion order for 80 Airbus A350s – 20 Airbus A350-800s, 40 A350-900s and 20 A350-1000s- making the airline the single largest customer of the European aircraft manufacturer’s newest commercial jet, so it is arguable that the pace of expansion has slowed down this year.
Boeing Dreamliners
In November 2007, at the Dubai Air Show, the airline Qatar Airways announced an order for 30 firm and 30 option Boeing 787-8 Dreamliners, together with confirmed orders for 27 Boeing 777s (pictured above) and an additional five options.
Delays in delivering some of these new aircraft has probably been one factor behind the decision to buy more A320s which are not a new model and therefore more readily available.
The other major factor is that the Qatar economy is still growing strongly, and expected to be among the fastest growing in the world this year. In short, the headwinds impacting Qatar Airways are just not the same as the rest of the industry, and not only can it afford to carry on investing, to a certain extent it has to in order to cope with growing demand.
Bold expansion plan
However, Qatar Airways is still making a bold move while other global carriers are struggling in a life-and-death battle with declining passenger and freight revenues. It could still come unstuck if the recession proves to be much longer and deeper than generally expected.
For a huge increase in capacity requires a commensurate increase in demand. But for passengers this could not be better news. Qatar Airways is investing in the latest aircraft with the best facilities, and if it ends up having to discount seats to attract business then this is a bonus for the global traveler.
This is also undoubtedly good for the rest of the Gulf region’s hospitality industry as an expanding airline will deliver more passengers in need of accommodation and restaurants. But the jury is still out on whether it will prove a good investment for Qatar.
