Qatar Airways delays low-cost carrier launch
Posted on 07 April 2010 with no comments from readers
Qatar Airways is delaying the launch of a budget carrier to rival Air Arabia and FlyDubai until these airlines begin to impact on its revenues, something the Doha-based national airline says is not happening just yet.
Chief executive officer Akbar Al Baker told journalists yesterday, ‘We already have plans for the low-cost carrier but we are holding it back. We will launch the budget airline if there is a major dent in our revenue’.
Ankara debut
However, Qatar Airways is not holding back from launching new routes for its famous five-star service. On Monday the airline opened flights to Ankara, capital of Turkey.
On the flight path for 2010 are Tokyo on April 26th, Barcelona June 7th, and Sao Paulo and Buenos Aires on June 24th. Qatar Airways also started flying to Bangalore on February 22nd and Copenhagen on March 30th.
The airline carried 12 million passengers in the year to March 2009 and projects 14 million passengers for 2010-11. Mr Al Bakar boasts of 35 per cent annual growth and claims this is a sustainable business plan.
Indeed, Qatar Airways now has the second largest fleet in the Persian Gulf and an enviable reputation for its five-star cabin service. Its fleet is among the youngest in the skies, and its staff do not come with the legacy costs of older airlines.
Loss-making airline
All the same the decision not to go for a low-cost carrier seems to show some signs that the bottomless purse does have its limits. The Qatari state has been a generous sponsor of its airline to date and it remains a loss-leader for the nation.
If Qatar Airlines were profitable we would doubtless have heard a lot about it. Instead we have vague declarations from Mr Al Bakar such as, ‘We don’t fly anything but passengers. We are not flying to destinations just to show our aircraft but there is a demand’.
Actually that means the Qatari state is subsidizing the rich who choose to take its five-star service, and it seems stretching that generosity to include the poorer travelers is just too much. So perhaps if Qatar Airways ever moves into profit only then will its low-cost carrier take to the sky.
