Qatar to order 60 A350s and 20 777s

By: rdc1000 - 13th June 2005 at 16:58 Permalink - Edited 1st January 1970 at 01:00

This is a really massive expansion for Qatar Airways, though.

I know I've asked this before, but could they be planning on diversifying into the aircraft leasing business, a la Icelandair?

I wouldn't have thought so, from what I know of their strategy it is to follow the lead of Emirates in exploiting the good location these carriers have for hub operations. Hubbing passengers is usually low yield and not so worthwhile, and for an airline to almost rely solely on this could eb considered dangerous....but the advantage Qatar and Emirates have over other airlines is that they pay relatively little for fuel in their home nations and so can increase the yield. Therefore this makes them hard to compete against by direct services (in terms of price anyway) and so there is a very large Europe/Asia (and Europe/Africa, Africa/Asia) still to be tapped into. These airliens are big players into the UK when compared to the scale of their operations elsewhere in Europe, if they continue to expand by this method it won't take long before they need all these aircraft.

By: rdc1000 - 13th June 2005 at 17:06 Permalink - Edited 1st January 1970 at 01:00

Thinking about it let me put it into perspective a bit....assume 1 aircraft will be used for every daily flight into Europe..if Qatar provide the following services to feed their hub then you can see it won't take long to use all of their A350s...

Munich - Twice daily (ie 2 aircraft)
Dusseldorf - Twice Daily
Geneva - Daily (ie 1 aircraft)
Lyon - Daily
Nice - Daily
Brussels - Twice Daily
BHX - Daily
MAN - Twice Daily
Barcelona - Twice Daily
Madrid - Twice Daily
Stuttgart - Twice Daily
Berlin - Twice Daily

OK, so even with that relatively short list I have used 20 aircraft, and non of those would seem totally unviable for their strategy. So assuming that another 20 aircraft then need to be flying to Asia to compliment these then thats 40 aircraft. So add a few more routes and 80 aircraft can easily be swallowed in the schedule. Also take into account reserve aircraft and those in maintenance.

By: rdc1000 - 13th June 2005 at 21:57 Permalink - Edited 1st January 1970 at 01:00

I do not know what the current routes are for Qatar. But I know that DUS is not one of them. You did list it though, what makes you think Qatar can fill a flight? Let alone two daily flights to DUS? Emirates is already very active on the route and growing hard (they often upgrade to 343). Would Qatar be able to take part of the market?

Same goes for all the middle eastern airlines really. Emirates, Qatar, Etihad, Gulf Air... they are all large airlines with very ambitious expansion plans. One or two of them will probably collapse since I doubt the demand will be there for all four of them (not even counting smaller airlines like Oman Air).

Gulf Air is co-owned by the various Emirates and will in the long term almost certainly cease to be a mayor player. Maybe even cease full stop. After all, why should individual Emirates keep this "SAS-like" airline when they each got a mayor of their own.

I do not think a collapse of Gulf Air alone will be enough though. Another airline may have to go too.

I never implied the need for any airline to go bust. And I quoted DUS as an example of the kind of destinations that these airlines feed from, so therefore likely possibilities. The airline market is much more contestable than it used to be and indeed I do believe Qatar could enter this market. There are good prime examples of markets similar to DUS which support such services. Take MAN for example, it has 2 Emirates services daily and (when I last looked) 4 flights per week by Qatar, but I am not fooled, I believe that it is capacity shortage which holds Qatar back from expanding at MAN.

You seem to have missed a little of the point with your comment about the 4 carriers in the area taking market share. A lot of the business of Emirates and Qatar is not even to their home nation or the regional market, it is long haul, from one continent to another via their home nation. As it happens Gulf Air has now started turning in a profit, so you'll be stuck if you expect that one to go bust too soon.

Typically air travel is growing at a rate of around 5% per annum, by 2020 the number of passengers travelling will have DOUBLED, therefore if you're not sure whether airports can sustain airlines such as Qatar and Emirates then look at what each airport has now from these carriers and AT LEAST double it (long haul routes are growing very fast). Remember these planes will not be delivered tomorrow and have to be put onto routes, they will be delivered through to 2015, by which time air travel will be nearing that doubling.

Your comments have concerned me about people's understanding of air transport :confused:

By: rdc1000 - 13th June 2005 at 23:53 Permalink - Edited 1st January 1970 at 01:00

Personally I would say that there are other destinations in Europe that could be more lucrative for a ME airline (not necessarily Qatar. Etihad, Emirates etc can do so too). For instance, AMS lacks a pax fligt from any ME airline. KLM has that market pretty much cornered. Only a fey freight services from Emirates and Qatar. In the past Jordanian and Kuwait used to fly here but they gave up.

AGAIN you've missed the point. You need to consider the availability of direct flights. DUS and MAN are good points to feed from because they have a relatively low number of long haul direct services. AMS on the other hand has loads of good quality direct services. KLM may have the AMS - ME market sewn up, but there is a good chance that there isn't room for lots of airlines between these two points offering point to point traffic. And Emirates/Qatar are not likely to get too excited about routes from there because passengers are more likely to fly to Bangkok, Hong Kong, Singapore, Tokyo and a host of other destinations direct. I know these airlines operate into London, from where passengers can also do the same. But they do so because they use London as a point to offer transfer traffic to US services. Furthermore there is stronger demand between the ME and UK than most other points in Europe. Finally, there is a 'shortage' (I use inverted commas cos obviously the flights are not all full but there would be a lack of capacity at the right price were it not for these airlines taking passengers to their hubs from here) of reasonably priced seats to points all over the world from London.

If you actually look where ME hubs carriers tend to be growing their operations it is to/from regional airports, not the majors (again..they do operate from major airports I admit, but are growing their regional services). So in the UK, Emirates serves GLA, MAN, BHX. They also serve NCE in France, and DUS in Germany, all airports with otherwise relatively poor connections to Asia (Direct anyway). I work in aviation, including passenger forecasting for airlines/airports and believe that DUS offers great potential for ME carriers offering connections through their hubs.

As for Gulf Air, it's operations have changed heavily since stakes have been sold and interest lost by certain parts of the Emirates. The airline remains the sole airline for Bahrain, a relatively strong destination in it's own right. Furthermore the carrier has a different business strategy to Emirates and Qatar...they have not yet placed significant airliner orders either, choosing instead to strengthen their current business model.