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Qatar Airways chief criticises European body Saturday, 09 April 2011 10:52
The chief executive officer of Qatar Airways, Mr Akbar Al Baker. PHOTOs | file
By Akbar Al Baker
The Citizen Correspondent
The boss of the Doha-based carrier said comments made by Mr Ulrich Schulte-Strathaus in February at a gathering of the International Aviation Club in Washington DC were "factually incorrect and unfounded".
Doha. "I recently came across the remarks made by a colleague of ours, Mr Schulte-Strathaus, Secretary General of the Association of European Airlines, about how global competition needs to be addressed by the International Civil Aviation Organisation, similar to what the industry is calling for in the domain of the environment.
"Mr Schulte-Strathaus focused on the competitive pressure that airlines from the Gulf are posing on their counterparts elsewhere. Usually I would choose not to comment directly on calls to find ways to limit the growth of the Gulf carriers, including Qatar Airways.
"However, because Mr Schulte-Strathaus chose to address one of the august forums of aviation visionaries in the world, I thought I needed to put the record straight. Mr Schulte-Strathaus in his remarks included a number of "facts" which I beg to disagree with. The so-called facts that he alluded to were as follows:
"1. The geographical proximity of Doha, Dubai, and Abu Dhabi gives rise to an anomaly in aviation. The fact of the matter is that it is quite common to have a multitude of hubs in close proximity: Singapore and Kuala Lumpur; Paris, Amsterdam, and London; Frankfurt, Zurich, and Vienna; the airports of New York and so on.
"Therefore, having three major hubs within a 280 miles radius is not a novelty in aviation.
"2. Mr Schulte-Strathaus raises the issue that the governments of the UAE and Qatar consider the airlines of the Gulf as part of national strategy and as a "tool of a vertically integrated economic chain". Again, he is trying to highlight a norm rather than an anomaly in the current geopolitical structure.
"I would like to pose a question to Mr Schulte-Strathaus: Can he tell me of any country of the world which does not consider its air transport industry, be it an individual airline or a multitude of them, as part of national interests? Was it not the case that the US government provided its airlines with cash outlays and tax breaks, as well as war insurance subsidies after September 11 in order to ensure the continuity of the US air transport industry?
Is it not the case even further that the position of the US has consistently been to preserve the national identity and ownership of the US airlines? "And on the other side of the Atlantic, doesn't Mr Schulte-Strathaus consider the billions of euros that are allowed under the EU laws to pump into airlines for "restructuring purposes" as a manifestation of the strategic national interest in supporting national airlines and what they represent economically and socially?
"Doesn't Mr Schulte-Strathaus consider the control over the overwhelming majority of slots in a highly congested region as a lopsided support to national airlines against new entrants including airlines which are coming from airports where European airlines can operate freely without any reciprocity in terms of slots quality?
"3. Mr Schulte-Strathaus is comparing the aircraft order book of Gulf airlines with that of the US carriers in the long-haul wide body arena as if those airlines plan to dump capacity. The comparison itself is extremely erroneous! The backbone of the US air transport industry is domestic operations. The portion of the capacity deployed internationally as a ratio of the total capacity deployed by the US airlines is minimal. Of course, geography and population spread requires such a structure.
"The airlines of the Gulf operate from small countries and they are operating regionally in an area which is three times the size of the US, and internationally with a network that stretches across the globe. We operate with the minimum cost per seat mile in mind. We operate with the minimum environmental footprint in mind as well. The average age of our fleet is around five years only. We do not keep airplanes operating for 20 to 30 years. Therefore, you will find that in order to maintain the lowest cost in seat mile, and the greatest appeal to customers, our order book is higher than elsewhere because we maintain a young fleet.
"This is not a new strategy. It has been applied extremely successfully by the airlines of the Asia Pacific. Asian airlines have almost the same fleet age and a comparable unit cost. Furthermore, some Asian airlines are still owned by governments and they are definitely part of the national interests of their countries. Yet, we do not see Mr. Schulte-Strathaus signalling them as part of the threat to the future of the aviation industry.
"4. Mr Schulte-Strathaus goes further in saying that two of the Gulf airlines have never made a profit. First of all, I would like to ask him how does he know that since Etihad Airways and Qatar Airways are not publishing their financial reports as yet? But from the principle standpoint: If profit was the only reason why airlines buy airplanes, as he is insinuating, then the net result of buying new airplanes in this whole industry should have been negative during the last decade.
"5. The crux of the matter in what Mr. Schulte-Strathaus is saying lies in his remark that ‘these (Gulf) airlines are efficient, they have extremely low unit cost yet deliver consistently high quality service. They have clarity of vision and decisiveness of action. They also have the full and enthusiastic support of their domestic political institutions.' I couldn't say that better! Is it a mistake to be efficient and to have a low unit cost?
Is it wrong for governments to be supportive of their national interests? Is Mr. Schulte-Strathaus advocating that airlines which have high unit cost and do not deliver consistently high quality service should be protected from efficient low cost and high service airlines?"
The author is the chief executive officer of Qatar Airways
The chief executive officer of Qatar Airways, Mr Akbar Al Baker. PHOTOs | file
By Akbar Al Baker
The Citizen Correspondent
The boss of the Doha-based carrier said comments made by Mr Ulrich Schulte-Strathaus in February at a gathering of the International Aviation Club in Washington DC were "factually incorrect and unfounded".
Doha. "I recently came across the remarks made by a colleague of ours, Mr Schulte-Strathaus, Secretary General of the Association of European Airlines, about how global competition needs to be addressed by the International Civil Aviation Organisation, similar to what the industry is calling for in the domain of the environment.
"Mr Schulte-Strathaus focused on the competitive pressure that airlines from the Gulf are posing on their counterparts elsewhere. Usually I would choose not to comment directly on calls to find ways to limit the growth of the Gulf carriers, including Qatar Airways.
"However, because Mr Schulte-Strathaus chose to address one of the august forums of aviation visionaries in the world, I thought I needed to put the record straight. Mr Schulte-Strathaus in his remarks included a number of "facts" which I beg to disagree with. The so-called facts that he alluded to were as follows:
"1. The geographical proximity of Doha, Dubai, and Abu Dhabi gives rise to an anomaly in aviation. The fact of the matter is that it is quite common to have a multitude of hubs in close proximity: Singapore and Kuala Lumpur; Paris, Amsterdam, and London; Frankfurt, Zurich, and Vienna; the airports of New York and so on.
"Therefore, having three major hubs within a 280 miles radius is not a novelty in aviation.
"2. Mr Schulte-Strathaus raises the issue that the governments of the UAE and Qatar consider the airlines of the Gulf as part of national strategy and as a "tool of a vertically integrated economic chain". Again, he is trying to highlight a norm rather than an anomaly in the current geopolitical structure.
"I would like to pose a question to Mr Schulte-Strathaus: Can he tell me of any country of the world which does not consider its air transport industry, be it an individual airline or a multitude of them, as part of national interests? Was it not the case that the US government provided its airlines with cash outlays and tax breaks, as well as war insurance subsidies after September 11 in order to ensure the continuity of the US air transport industry?
Is it not the case even further that the position of the US has consistently been to preserve the national identity and ownership of the US airlines? "And on the other side of the Atlantic, doesn't Mr Schulte-Strathaus consider the billions of euros that are allowed under the EU laws to pump into airlines for "restructuring purposes" as a manifestation of the strategic national interest in supporting national airlines and what they represent economically and socially?
"Doesn't Mr Schulte-Strathaus consider the control over the overwhelming majority of slots in a highly congested region as a lopsided support to national airlines against new entrants including airlines which are coming from airports where European airlines can operate freely without any reciprocity in terms of slots quality?
"3. Mr Schulte-Strathaus is comparing the aircraft order book of Gulf airlines with that of the US carriers in the long-haul wide body arena as if those airlines plan to dump capacity. The comparison itself is extremely erroneous! The backbone of the US air transport industry is domestic operations. The portion of the capacity deployed internationally as a ratio of the total capacity deployed by the US airlines is minimal. Of course, geography and population spread requires such a structure.
"The airlines of the Gulf operate from small countries and they are operating regionally in an area which is three times the size of the US, and internationally with a network that stretches across the globe. We operate with the minimum cost per seat mile in mind. We operate with the minimum environmental footprint in mind as well. The average age of our fleet is around five years only. We do not keep airplanes operating for 20 to 30 years. Therefore, you will find that in order to maintain the lowest cost in seat mile, and the greatest appeal to customers, our order book is higher than elsewhere because we maintain a young fleet.
"This is not a new strategy. It has been applied extremely successfully by the airlines of the Asia Pacific. Asian airlines have almost the same fleet age and a comparable unit cost. Furthermore, some Asian airlines are still owned by governments and they are definitely part of the national interests of their countries. Yet, we do not see Mr. Schulte-Strathaus signalling them as part of the threat to the future of the aviation industry.
"4. Mr Schulte-Strathaus goes further in saying that two of the Gulf airlines have never made a profit. First of all, I would like to ask him how does he know that since Etihad Airways and Qatar Airways are not publishing their financial reports as yet? But from the principle standpoint: If profit was the only reason why airlines buy airplanes, as he is insinuating, then the net result of buying new airplanes in this whole industry should have been negative during the last decade.
"5. The crux of the matter in what Mr. Schulte-Strathaus is saying lies in his remark that ‘these (Gulf) airlines are efficient, they have extremely low unit cost yet deliver consistently high quality service. They have clarity of vision and decisiveness of action. They also have the full and enthusiastic support of their domestic political institutions.' I couldn't say that better! Is it a mistake to be efficient and to have a low unit cost?
Is it wrong for governments to be supportive of their national interests? Is Mr. Schulte-Strathaus advocating that airlines which have high unit cost and do not deliver consistently high quality service should be protected from efficient low cost and high service airlines?"
The author is the chief executive officer of Qatar Airways
