His Excellency Akbar Al-Baker, Qatar Airways Group CEO and IATA Chairman, says airlines must continue to embrace rapid changes brought about by a dynamic industry.
Airlines can never stand still. Qatar Airways continues to expand its network, develop its cargo business, and invest in greater efficiency at its award-winning hub. As Group CEO His Excellency Akbar Al-Baker explains, smart regulation would help cement the economic benefits this activity generates.
Can you continue to grow as you have done in previous years?
Qatar Airways will continue to grow in 2018. Our innovative approach to both product and service drives our customer loyalty, which in turn drives our rapid growth. Our growth in the last year has been impacted by the loss of destinations in Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt, due to the illegal blockade imposed on international airspace by these countries. Since the blockade we managed to replace these destinations with new routes, expediting expansion plans across our global network. We continue to focus on joint business agreements and further strategic investments as well as expanding our passenger and cargo network.
Our expansion plan for 2018 is aggressive; we have already launched London Gatwick and Cardiff in the UK; Bodrum, Antalya and Hatay in Turkey; Mykonos and Thessaloniki in Greece; and Málaga in Spain. We also plan to launch new destinations such as Lisbon, Portugal; Tallinn, Estonia; Valletta, Malta; Cebu and Davao, Philippines; Langkawi, Malaysia; and Da Nang, Vietnam.
Has cargo been a key component in your revenue and what can be done to improve cargo processes?
Qatar Airways Cargo is the second largest international cargo carrier in the world as measured by freight-tonne kilometers and naturally is a key component in our revenue. Our cargo fleet consists of 23 widebody cargo aircraft, including a Boeing 747-8 Freighter.
Our portfolio of distinctive products includes QR Pharma, QR Fresh, QR Live and QR Express offering efficiency and compliance in the handling of temperature-sensitive pharmaceutical and perishable cargo, transportation of live animals as well as time-critical shipments.
We have also made substantial investments in our cargo operations at our Doha hub to ensure all cargo deliveries are processed efficiently and seamlessly. Special facilities and well-trained personnel ensure expert handling over a wide variety of product categories. Looking ahead, we will be increasing cargo capacity at the airport, from the 1.8 million tonnes handled last year to 4.4 million tonnes, through the addition of a second cargo terminal. In addition, we will provide the best e-cargo solutions in the world.
The private sector can play a meaningful role in bringing expertise and cost efficiencies to air transport infrastructure provided the right framework is put in place
How important has the new airport been in your success in both the passenger and cargo markets?
Hamad International Airport (HIA) ensures that the Qatar Airways flight experience is complemented by the same level of service, comfort, and hospitality on the ground as passengers receive in the skies.
The airport set a new record for passenger traffic and aircraft movements in 2016/2017, handling 38.2 million passengers and 250,419 landings and take-offs. The airport also handled a total of 1.8 million tonnes of cargo.
HIA has won a host of awards across numerous categories and was certified as a ‘5-Star Airport’ in January 2017 by Skytrax. Qatar Airways’ network works because HIA is able to connect our flights efficiently and conveniently. In this regard, HIA continues to provide a strong and unmatched competitive advantage for Qatar Airways, serving 38 million Qatar Airways passengers annually. HIA is operationally efficient, supporting 88.4% on-time departures and among the top airports globally able to support international connections below 60 minutes. The airport’s third-phase development plan is under way, and this will add significant capacity to the airport and allow Qatar Airways to continue its upward growth trajectory. Once complete, phase 3 will boost our capacity to 50 million passengers a year.
What is your view of airport privatization?
The private sector can play a meaningful role in bringing expertise and cost efficiencies to air transport infrastructure provided the right framework is put in place. Airports are natural monopolies and privatization without proper governance and public accountability can easily lead to predatory behavior, with airlines often the first victim. It is essential to understand the risks that can occur during privatization to determine the appropriate regulatory framework.
Do alliances still hold value in the modern industry?
Qatar Airways is part of the oneworld alliance, which serves more than 1,000 airports in 150-plus territories with 14,000 daily departures. It carries almost 550 million passengers a year on a combined fleet of 3,500 aircraft and generates more than $130 billion in annual revenue.
Our broad network has further expanded by more than 350 destinations through our membership of the oneworld alliance and our codeshare agreements with our airline partners.
We announced a joint business agreement with International Airlines Group (IAG) subsidiary, British Airways, over the course of the 2016-2017 year, with revenue sharing on the trunk London Heathrow-Doha route. The joint business enabled us to coordinate commercial activities for the benefit of our mutual customers, while drawing our two companies closer together and thereby strengthening not only our bilateral relationship but also the oneworld alliance.
Qatar Airways has also launched new codeshare partnerships with other oneworld partners.
The facts and figures speak to the value that oneworld brings to the airlines and their customers.
Looking ahead, do you think we will continue to see a fragmented industry or will ownership rules relax, and consolidation occur cross-border?
We need to overcome fragmentation within the industry and with related industries such as tourism and alternative or complementary modes of transport.
We must advocate in favor of harmonization, the adoption of global standards, smart regulation, and maximum operational flexibility for airlines.
It is undeniable that consolidation has contributed to the overall improvement of the industry, allowing airlines to generate cost synergies and network efficiencies. In recent years, we have witnessed the emergence of joint ventures and equity partnerships among airlines serving international markets. This trend has been good for consumers as airlines’ networks and routes have become better aligned with the travel needs of passengers.
However, these commercial arrangements are still subject to regulatory review and governments could decide to withdraw their support at any moment based on short-term political considerations. How can we get governments to understand the benefits of aviation and create fair and transparent regulations? Our industry plays a crucial role in the global economy. Worldwide, aviation supports nearly 63 million jobs and $2.7 trillion in global GDP. And there is enough historical evidence to prove that the countries and regions that have implemented liberal aviation policies have ultimately benefited economically and socially.
We need to overcome fragmentation within the industry. We must advocate in favor of harmonization, the adoption of global standards, smart regulation, and maximum operational flexibility for airlines
Our role as an industry is to continue to engage with governments and regional bodies to ensure the development and implementation of smart regulation. We must encourage governments to adopt regulatory approaches that do not harm the industry’s economic potential. IATA is promoting the value of aviation across various regions, emphasizing the important role that aviation plays in connecting people and businesses.
What new technologies do you think will be most disruptive to the airline industry?
Like all industries, aviation is not immune to the disruptions caused by rapid advances in information technology. These advances have created both challenges and opportunities.
Advances in handheld technology and social media access have resulted in more airlines selling direct to passengers as opposed to the traditional model via distribution systems through intermediaries and agents. This has brought a reduction in costs for airlines but also created opportunities for new non-aviation retailers to aggregate and sell end-to-end travel with airlines only one part of the chain. This creates its own challenges as airlines learn to work with new players in the e-retail market.
Advances in artificial intelligence to manage big data and forecasting will also present opportunities in the future for airlines to optimize revenue management systems. In terms of aircraft, advances in fuel efficiency have brought new competition in the form of low cost carriers challenging the established market positions of legacy carriers. On the other hand, it has made once secondary airports more attractive as they can be connected directly or via hubs with right-sized aircraft.
As IATA Chairman, what are your plans for assisting airlines in dealing with human trafficking?
Human Trafficking, increasingly referred to as Trafficking in Persons (TIP), is the fastest growing and second largest criminal industry in the world. As with all forms of transport, aviation can unknowingly be misused to facilitate TIP.
Ultimate responsibility for identifying, investigating, and prosecuting perpetrators of this crime lies with government and enforcement agencies. However, the aviation industry can play a key role in providing intelligence to the authorities by identifying individuals who may be being trafficked during air travel and reporting this to the relevant authorities.
The IATA 74th AGM unanimously approved a resolution denouncing TIP and committed to a number of actions related to anti-trafficking initiatives. As Chairman, I am proud our members unanimously supported this resolution, with many members well advanced in implementing programs to identify and report TIP. Human traffickers operate in plain sight and can only be stopped with the full cooperation of all parts of the value chain, especially airport operators, ground handling agents and other air transport system stakeholders.
150 plus destinations are served by Qatar across six continents
220 is the number of aircrafts in Qatar's fleet
Qatar Airways became the Oneworld alliance's 12th full member in October 2013
60 plus destinations are served by the airline's cargo division - Qatar Airways Cargo - with a dedicated cargo fleet