In-depth: Qatar Airways global expansion despite blockade
Since 2017, a Saudi Arabia-led blockade has had its fair share of negative impact on Qatar Airways’ operations. While the airline’s latest report includes a statement by its Chief Executive Officer Akbar Al Baker claiming that the Doha-based carrier’s “adversaries have suffered far more than” Qatar Airways did, a $639 million (QAR2.3 billion) loss in FY2019 might point otherwise. A $1.3 billion increase in fuel expenses compared to FY2018, in part due to the blockade, forced the flag carrier to navigate some tough waters and airspace, quite literally, as neighboring countries are not too keen on letting Qatar-registered aircraft bypass their airspace.
While Qatar Airways declaring bankruptcy is not a sight that we are likely to see in the short-term, the poster boy (or rather airline) of the Gulf country is having a tough time. After all, the Big Three Gulf airlines, including Emirates and Etihad, have become marketing tools for the specific countries’ flags placed on the side of fuselages. Thus, in the face of a blockade, remaining a global powerhouse within the industry and Qatar’s connection to the outside world is crucial not only for the airline but for the country it represents as well.
New Qatar Airways horizons
On December 15, 2019, the airline’s Airbus A350-900 landed for the first time in Botswana’s capital Gaborone (GBE). The route is fairly bizarre: coming from Doha, Qatar (DOH), the A350XWB first landed in Johannesburg, South Africa (JNB). Then, the same Airbus jet continued its journey to Gaborone, whereupon it landed and turned back to Johannesburg for a flight back to Qatar’s capital city. The newly inaugurated route to Botswana’s capital is served three times a week.
Qatar is betting on the success of Africa. In 2019 alone the carrier added three flights from Doha to Africa (including Gaborone), namely Mogadishu, Somalia and Rabat, Morocco. In 2020, it also plans to launch flights to Luanda, Angola. Furthermore, on December 17, 2019, the airline announced that it will increase frequencies on 20 destinations it serves, including changes to six flight schedules from Doha to Africa.
The strategy should not shock anyone. In Qatar Airways’ FY2016 report, the carrier highlighted that in the short and medium-term, the two biggest markets set for growth are “on the African continent and India”, while China and South America continue to showcase “strong underlying growth”.
And the airline has made it clear that it wants to increase Qatar Airways’ brand presence not only by deploying aircraft but by slipping in cash, in the form of investments, as well.
Taking stakes up and down, side to side like a rollercoaster
Since 2015, Qatar Airways had been taking stakes in various airlines and airline groups. Its first huge splash-of-cash target was International Airlines Group (IAG), the parent of such airlines like British Airways and Iberia. In January 2015, the deal, worth more than $1.7 billion for a 9.99% stake in IAG, was announced. Gradually, the Doha-based airline increased its stake, stopping at 21.43%, according to Qatar Airways’ latest financial report.
In December 2016, the company acquired 10% of LATAM Airline Group, the largest airline group in South America. Almost a full year later, in November 2017, Qatar Airways ventured in another market where it foresaw growth – China. The airline made an investment in the Hong Kong-based carrier Cathay Pacific.
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