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CAPA Live Transcript: Qatar Airways' tech investment, expands partnerships

Analysis

Qatar Airways has continued to add destinations during the pandemic and will continue to do so. 

The airline has invested heavily in technology and was one of the first airports to use UV robots and the latest technology to sanitise aircraft.

Qatar Airways continues to work on developing partnerships. They are now working closely with American Airlines, JetBlue and Air Canada and will look to look to widen partnerships across the globe.

The airline believes business traffic will return, although maybe not before 2024, depending on the current circumstances of the pandemic.

Talking at the CAPA Live on 13-Jan-2021, Qatar Airways’ Group CEO H.E. Akbar Al Baker spoke with CAPA’s chairman emeritus Peter Harbison. Some of the key highlights can be found below.

CAPA Live is broadcast monthly on the second Wednesday of each month. The next CAPA Live will be on 10-Feb-2021. For more information please see CAPA Live - 10 February

Qatar Airways has increased frequencies from 33 countries at beginning of the pandemic to 110 destinations today and will end up with 129 destinations by March

“After this pandemic is over there will be fewer airlines that will be operating. For certain, by the grace of God, we will be one of them because we have persevered, we have established ourself very strongly, we have made everybody aware of our brand, our product, and most importantly, carried the flag of Qatar internationally. I think though, by RPK we are one of the three, but when you look at the number of international destinations, we are the largest international operator connecting people and we will continue to do so."

"We have increased frequencies from 33 countries at the beginning of the pandemic, to 110 destinations today and we will end up 129 destinations by March. So you can see the commitment we have to our industry and to our passengers, like no other airline.”

We have invested a lot in technology and were one of the first airports to use UV robots, contactless processes for passengers, and the latest technology UV equipment to sanitise our aircraft.

“Fortunately, we are in a very unique position, which no other airline in the world is, that we both operate the airport as an airline, so it gives us responsibility for total passenger experience. Once you check in at Qatar Airways, until you board your airplane. So this is something that is helped us to provide to our people a very safe and sanitised way of travelling during this very serious situation the world is facing since nearly over a century ago.

“If you notice what we did from the beginning of the pandemic, we invested a lot in technology that will make our airport and the airline safe. We were one of the first airports that used UV robots, contactless processes for the passengers, sanitisation, and including using latest technology UV equipment to sanitise our aircraft. We were one of the only international carriers to provide mandatory face shield, mask, gloves, sanitisers to every single passenger, and made sure that they use it while they're onboard our airplane."

"So these are the things that we did to bring confidence of the people. And we have already received five-star rating by Skytrax for the COVID mitigating factors we have introduced in our airport. So we have met all the requirements of our ministry of public health, including international organisations."

We are going to expand our partnerships with other carriers. We are part of a larger aviation family and can contribute to each other’s bottom line

“You know that we had huge disagreement with American. Today, we are very close to them and we are very close to JetBlue. We are now going to expand our partnerships with other carriers. Air Canada is an example where two CEOs that have same understanding about the industry, two CEOs that are very progressive, have come to an agreement whereby we contribute to each other traffic. And this is a very good example for everybody else, that in our industry, we are not adversaries, but we are part of a larger aviation family and we can contribute to each other's bottom line, to each other's progress, to each other's increase in traffic, and contributing to facilitations for their passengers and most importantly, to their frequent flyer members."

“I hope that this is a very good learning curve for all the other people in our industry that think that we should only keep the pie for ourselves and eat it alone. And now that the pie is very small after this pandemic is over, and it is for everybody else to make sure that they can learn from us of how to generate partnerships and meet the demand that will be very much reduced over the next three to four years."

“It also gives a very good example to other oneworld members who are not openly working with us or working with us to the level that the alliance should work with each other. I'm a businessman, and I look at win-win for two sides. You can never have a relationship with somebody where it is a one-way street. And both American JetBlue and Air Canada start to realise that with Qatar Airways, there is a mutual benefit partnership, not like some other airlines that they are only looking to their benefit and using other people in order for them to get and eat the cake for themself.”

CAPA Live January 2021 Highlight: H.E Akbar Al Baker Group CEO Qatar Airways

We have invested right across the globe from South America to China, and now in Africa. So we are covering nearly the entire globe

“If you really look at the way we have invested, we have invested right across the globe from South America, with LATAM to North America, our relationship with American Airlines, JetBlue, and now with building relationship with Alaskan, then going back to the Far East, doing it with China and Cathay, and now investing in Africa. So we are really covering nearly the entire globe, and with our developing strong relationship and the shareholding with IAG. So we ought to be satisfied that we have enough exposure to our business growth over the entire globe.”

Business traffic will start growing once the pandemic is brought under control.  High net worth people are now fed up being locked in their countries and will want to start travelling

“There will not be too much business traffic, but this is only for the time being. I am certain that the business traffic will start growing once the pandemic is brought under control. To a lot of people that I spoke to always feel that they can do and conduct their business better when it is a face to face meeting than doing it over a TV screen or on a laptop. What is very important for people to know that we have passed through epidemics, not a pandemic, but we have passed through pandemics which also indicated that business travel will be affected, it didn't happen. And I think the same will happen keeping in mind that there will be so much reduced capacity of premium carriers that we think people will still fill our premium seats in not too distant future."

“I think mostly the traffic in the premium will come from the high-net-worth people who are now fed up by being locked in their countries, and would suddenly want to go and start travelling. I'll give you an example. Even at the peak of the pandemic, people are still travelling to the Maldives, Seychelles, Zanzibar on Qatar Airways. So our premium seats in these routes are full. We started with one flight a day to the Maldives, and now we are operating three flights a day to the Maldives. Two of them are widebody and one is a narrowbody, and the narrowbody is because that aircraft is operating between two bubbles carrying point to point traffic between my country and the Maldives."

“We came up with a very clever system where people can go, being tested and then go to dedicated islands that has been requisitioned. When I say requisitioned space, we have taken the entire capacity of those three islands. People go to those islands and then come back straight without going to quarantine because they are on the return again, tested. So by this way, we have generated a model that is giving a very good high value traffic between these two destinations. So we always come up with new types of inventions to keep our airline continuing to fly."

“I think that the entire network, business traffic will start growing once the pandemic is brought under control, and I hope that it will happen sooner than later, even though there's no 100% guarantee that the vaccine is going to work. You don't know how long will be the effect of the vaccine. Will it be six months, nine months, one year? Will it be permanent or will you have to get vaccinated every year? Will the vaccine producers have the capacity to cater for the world's population if it is to be taken year-round? Every year? And even if you get vaccinated, still science cannot prove that you will not be infectious to other people. Especially when not everybody will get vaccine. So you could still be a carrier, though you are not getting effected because you have been vaccinated. So all these things need to be clarified. And I don't think it will happen in a day or two."

“If a new variant of COVID comes out, which is then difficult to treat, or the spread is more aggressive than what it was, then we would be in trouble and this may extend recovery beyond 2024."

“People will eventually forget about this pandemic. Or if it gets extended, I'm sure humans will always find a way around of how to get along and live with whatever is at hand.”

We want to be a dominant player in the cargo business. People have learnt from us how to convert passenger aircraft into freighters

“In the long run we will still be one of the largest cargo operators. But I don't think that once passenger numbers started ramping, that we will still have the same capacity in the belly that we have today. However, we already have nearly 30 freighters and those numbers are going to increase. We want to be a dominant player in the cargo business. People learnt it from us, of how to convert passenger aircraft into freighters.”

The A350 is a very efficient airplane when it comes to emissions. The A380 is the worst aircraft when it comes to emissions that is flying around today, so we will not operate them for the foreseeable future

“The 350s and the 78s are very efficient airplane when it comes to emissions. Especially with the 350-1000. We never expected that aircraft to be the efficiency that it is producing today. The 380, I think, is one of the worst aircraft when it comes to emission that is flying around today. This is why we have decided that we will not operate them for the foreseeable future. And even when we operate them, we will only operate half of the numbers we have.”

We have one of the most comfortably economy class seats flying. We give you the same product in economy that other airlines give in premium economy

“We have one of the most comfortable economic class seats that are today flying in the air because even our economic class seats are designed with feedback from the airline. So we look at all the requirements that you have. We give you the same product that other airlines will give you in premium economy, we give it to you in the economy. So why should we reinvent the wheel?"

“Frankly speaking, I rather rest my feet on the floor of the aeroplanes stretched under the seat in front of me than have this funny leg rest that comes out from underneath the premium economic seat that is so uncomfortable to your calf that after sometime it starts hurting you. So you need to look at all the comforts, pros and cons of the both product, and you will eventually come to the conclusion that a normal economic seat with proper amenities and ergonomics of the seat, that it is a more comfortable proposition than a premium economy.”

I don’t think airlines will start taking advantage and start charging higher fares. We will always find ways to make money, but it doesn’t mean that you have to overcharge passengers

“I disagree that airlines will start charging people an arm and a leg just because there is reduced capacity or the airline industry has shrunk. I don't think that will be the case. Eventually the airlines really start growing again, but in the short and medium term, yes, there will be a reduction in the number of airplanes and the network. But also keep in mind that less people will want to travel in that period of time. So I don't think that there will be lower capacity or people or airlines will start taking advantage of what is happening to start charging people higher fares. I don't think that is going to happen."

“We have introduced in Qatar Airways different fare levels in different classes to encourage people to travel, and this is what we will continue to do. So you'll have different fare classes, which you could choose depending on when you are booking and how close to the date of departure you're booking. So we are not going to change that. We will not take advantage because there is a less airlines flying or there is less capacity available."

“We will always find ways to make money, but it doesn't mean that you have to overcharge passengers.”

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