Pistols at dawn!
Qatar’s (in)famous CEO Akbar Al Baker is known for saying all sorts of things on behalf of his airline that he doesn’t mean (how’s that new route to Las Vegas going?), but recently he has insisted that Qatar Airways is considering leaving the oneworld alliance.
One of his main reasons for wanting to leave is because of fellow oneworld member Qantas, who he has accused of blocking Qatar expanding into Australia. I wrote a separate article explaining exactly what he meant by this, and that I agree with him that Qantas is likely lobbying the Australian government to allow their joint venture partner (and Qatar enemy) Emirates to expand even further into Australia, while greatly restricting Qatar from doing so.
I have thought that Qatar is unlikely to leave oneworld both because the Gulf blockade is limiting their ability to operate the routes and attract the customers they want, and their alliance membership is a key advantage over their Middle Eastern competitors Emirates and Etihad, though having an advantage over the quickly deteriorating Etihad is less important than it used to be.
But then IAG’s Chief Willie Walsh coming out publicly to say that it was ‘highly likely’ Qatar would leave oneworld, which added some serious weight to the likelihood they actually would.
The latest in this saga is that Qantas allegedly sent a letter to all its staff criticizing Qatar’s expansion into Australia. This letter has not leaked to the public so we don’t know its exact contents, but presumably it would be a similar argument to the lobbying Qatar has accused Qantas of doing to the Australian Government.
Al Baker has then come out publicly again last week following this Qantas letter, to say he didn’t see ‘any point’ in staying in the oneworld alliance.
Qantas CEO Alan Joyce until recently stayed quiet on the debate, but has now said:
Our view has been very simple, we’re after fair competition. Nobody could say there is anything wrong with that.
We’ve plenty of other alternative mechanisms, which is the way our network is designed. People have a lot of choice on the Qantas-coded network to get to the same European points that they had been using Qatar.
If they decide to leave, it is because it is no longer working for them. Nobody should be in an alliance where they believe its not working for them. If Qatar feel they do better outside of Oneworld, that is up to them.
He was pressed on exactly what he meant by ‘fair competition’ to which he explained:
If aviation was governed by the World Trade Organisation, there would be some dumping cases against people for going in well below cost to force people off routes and markets. We think those rules should apply to aviation markets.
Hmmm…. does that argument sound familiar?
Bottom line
Global alliances like oneworld are not nearly as important as they used to be, with airlines forming individual partnerships themselves that suit their business model better than being lumped together with over a dozen airlines they may not even like.
Alan Joyce is a terrific CEO in terms of how he turned around Qantas fortunes over the past decade, and life would no doubt be easier for Qantas if they did not belong to an alliance of a carrier they saw as a direct threat. But to say Emirates is fine, while Qatar is an ‘uneven playing field’ is ridiculous.
I can’t see the loosening of the Air Services Agreement between Qatar and Australia leading to Qatar ‘dumping capacity well below cost to force people off routes and markets.’ Qantas doesn’t fly to the Middle East themselves at all, and only flies to London in Europe.
There’s little competition on Asian, African and American routes between the carriers as Australians would choose the far more direct Qantas option even if it were a lot more expensive (Qantas is rarely the cheapest option anywhere). Yes there’s competition with Qantas’ joint venture partner Emirates connecting many cities, but that is what free market competition is all about — Emirates is big and established enough to be able to compete.
And hasn’t Emirates employed the same tactics Qatar has anyway?
I do think there is now a greater chance Qatar will leave oneworld as this issue just won’t go away.
Do you think Qatar will now leave oneworld?
I must say that I am taken aback a bit... by the mass of negative commentary. For most of us as absurdly frequent flyers, having the largest selection of airline options, where we can either earn and/or enjoy the elites privileges we have worked (flown) so hard to get, certainly seems to be a reasonable and absolutely non-selfish objective! So no matter how "unique" (or entertaining) a personality Mr. Al Baker might almost always be,...
I must say that I am taken aback a bit... by the mass of negative commentary. For most of us as absurdly frequent flyers, having the largest selection of airline options, where we can either earn and/or enjoy the elites privileges we have worked (flown) so hard to get, certainly seems to be a reasonable and absolutely non-selfish objective! So no matter how "unique" (or entertaining) a personality Mr. Al Baker might almost always be, I feel that we in the "community" (especially if one is a OW elite-plus member) should extend and express our support for him to stay in the alliance program. Any of us who have experienced even lowly "J" (I'm not often at all at "F" level yet) on Qatar know that with or without Q-Suite, it is usually a pretty darn superb experience; and when transiting in Doha, a two to three hour minimum is preferable, to be able to experience either of the truly superb lounges! So why, if we are almost all mega-flyers, is there such a level of "who cares" as to the potential loss of a privilege offering member???
I tend to agree with @anthony. In the air QR are fine but dislike them greatly on the ground and Al Bakar seems to be a bit of a fruit loop. As for the interests QR have in other carriers, they are all minority interests so why would those carriers move from where they are... unless a few dirhams (or whatever it is) is slipped under the table?
They might as well leave OneWorld
Try spending 70k AA miles to get from US to India and half of QR segments are in Economy.
NOT.
@James
Yeah I know. I was just fantasizing how nice it would be if all the worthy airlines would stick together in one or two alliances. It would make life so much easier.
Probably more noise than action but I wouldn’t mind Qatar joining StarAlliance or Skyteam. If Finnair could do the same then there is no reason left to fly OW.
@ Ron - Lufthansa have lobbied their government even harder to keep the ME3 out of Germany so Qatar would have the same issues if it moved to Star.
@James and @Seat1C,
The deals being offered by QR were simply not as wide ranging as EK. Firstly, reciprocal lounge access for QF platinum and Chairman members did not equate to what EK offered. CX retreated from Doha due to yield because QR aggressively undercut them and were able to do so because they flew their own metal to Hong Kong.
Absolutely consumers benefit from Qatar’s present in a market but airlines, which...
@James and @Seat1C,
The deals being offered by QR were simply not as wide ranging as EK. Firstly, reciprocal lounge access for QF platinum and Chairman members did not equate to what EK offered. CX retreated from Doha due to yield because QR aggressively undercut them and were able to do so because they flew their own metal to Hong Kong.
Absolutely consumers benefit from Qatar’s present in a market but airlines, which don’t receive state support, need to make money somewhere to maintain staff remuneration and cover operating costs.
As for Qantas having known QR would join, really? Lucky himself wrote here on October 1, 2012 that Al Baker denied joining in a reuter’s Report, doing more backflips than an Olympic gymnast. Imagine signing a 10 year joint-services agreement with him at a point in Qantas’ history where it absolutely needed a stable partner. Knowing his personality, it would have been a series of yes and no’s and lots of last minute demands before he signed. Negotiations between Qantas and Emirates would have preceded a long time before it was announced, so I think it’s not so clear cut. Nothing is transparent with Qatar Airways and OMAAT readers should know this better than most.
@Anthony: You say, Qatar joined in 2013 after Qantas signed their joint services agreement with Emirates. That's technically true, but it was already known that Qatar was going to be joining OneWorld.
Isn't it the case that QF and EK split money in their JV based on percentage travel on relevant metal, meaning that EK take the vast majority of the profits made? They could have had a more balanced deal with QR, but that...
@Anthony: You say, Qatar joined in 2013 after Qantas signed their joint services agreement with Emirates. That's technically true, but it was already known that Qatar was going to be joining OneWorld.
Isn't it the case that QF and EK split money in their JV based on percentage travel on relevant metal, meaning that EK take the vast majority of the profits made? They could have had a more balanced deal with QR, but that would have meant Qantas actually maintaining flights to Europe or the Middle East themselves, given that Qatar has a lower footprint flying to Australia than Emirates.
Similar with AA in a way - why did they do a deal with Etihad (though obv cut back now) rather than Qatar? I suppose that for both AA and Qantas they thought it was more competitive at the time.
I wish that both Qantas and AA had done their deals with Qatar but they must have had good reasons not to.
Who knows how it will work out - IAG/AA won't be getting divorced any time soon and it seems highly unlikely that IAG/QR will be falling out soon.
@ James
What’s in it for QF (or VA) in allowing QR to have more access?
@James,
I think you forget being in an alliance is about being a team player and Qatar is far from that. They compete with Alliance Partners instead of working with them. There needs to be a balance if consumers and employees want to have security.
Qatar joined in 2013 after Qantas signed their joint services agreement with Emirates. Commercially, they are not interested in offering the same benefits to Qantas but yell and...
@James,
I think you forget being in an alliance is about being a team player and Qatar is far from that. They compete with Alliance Partners instead of working with them. There needs to be a balance if consumers and employees want to have security.
Qatar joined in 2013 after Qantas signed their joint services agreement with Emirates. Commercially, they are not interested in offering the same benefits to Qantas but yell and scream when Qantas doesn’t roll over and give them unfetted access (just as they do with CX, AA, JL and LA. Hypocritical isn’t it?
@ Anthony -- I agree Qatar isn't a team player in oneworld but shouldn't Qantas be encouraging more traffic rights into Australia for both Emirates and Qatar, both of which Qantas have (different) partnerships with?
Qantas, the US3 and many other are just jealous of Qatar because they can't keep up wit the quality of service, new aircraft and Qsuite.
He’s disgusting, he has objectified women and only hired young women at his airline.
He has publicly said if you wanna fly on U.S. carriers, you’ll be served by grandmas which is disgusting and so racist and sexist and a just vile.
He’s a pig that objectifies women and fires women after three years .
I think if you’re desperate enough to fly one of these Middle Eastern carriers you are...
He’s disgusting, he has objectified women and only hired young women at his airline.
He has publicly said if you wanna fly on U.S. carriers, you’ll be served by grandmas which is disgusting and so racist and sexist and a just vile.
He’s a pig that objectifies women and fires women after three years .
I think if you’re desperate enough to fly one of these Middle Eastern carriers you are just looking for attention from women who wouldn’t normally give you the time of day and you’re lonely..
By the way I have friends who work for the airlines and they say exactly the same thing.
Keep dreaming buddy !
I fly regularly to Europe from Singapore and choose Qatar for their service but principally for the Elite points awarded toward OneWorld Emerald which, with the Iberia program, mean every return trip (via DOH) gets me 1/3 of the Emerald renewal. If Qatar leave OneWorld then I’d stop flying them and use CX via HKG. So unless Al Baker moves with at least IAG in tow he’d shoot himself in the foot as far as I and any (many) likeminded travellers are concerned!
This is AAB's Brexit moment. His bluff is being called out and (like David Cameron) he has to act or be humiliated. For Cameron, it was calling a referendum to leave. For AAB, it's going to be just leaving and losing face. AAB is a person that can't admit defeat, making leaving oneworld the likely outcome of this sharade. I'll think twice about flying them in the future. Cheap J fares are gone, service is hit or miss, and status/miles accrual was a key point!
If it's competition on soft product, Qatar wins hands down! Qantas, always the follower, never the leader, gives the impression it's not even trying, on so many levels. Of course they will run to the federal government pleading for 'special' treatment, but it has not been a quasi-government operation for many years now, so is undeserving of any government favors.
However with this shambolic tory government who knows what lengths they will go to...
If it's competition on soft product, Qatar wins hands down! Qantas, always the follower, never the leader, gives the impression it's not even trying, on so many levels. Of course they will run to the federal government pleading for 'special' treatment, but it has not been a quasi-government operation for many years now, so is undeserving of any government favors.
However with this shambolic tory government who knows what lengths they will go to to keep a large corporate friend happy.
This would leave OneWorld essentially without any presence in Africa save for British Airways and ConAir’s very limited footprint on the continent. I hope this doesn’t happen.
@Pedro Al Baker has already said he would
For us in Canada this sounds like an instant replay of AC versus the MEB3 right down to the CEO arguments. Personally I have always felt Oz threw open their skies too wide. Last time in I was in SYD there were more EK & EY WBs on the ground than QF.
"If aviation was governed by the World Trade Organisation, there would be some dumping cases against people for going in well below cost to force people off routes and markets. We think those rules should apply to aviation markets."
This is pretty funny coming from a Qantas CEO, maybe he should look at the practices of his own company in the past against new competitors. People in glass houses, Mr Joyce.
SydneyFlyer - you made me laugh!
If Joyce could keep quiet until after I book some QR awards with AA miles next month that'd be great...
I highly doubt Qatar would only take their airline out of the alliance and leave the rest of their investments in. Qatar's got significant stakes in multiple airlines and should be able to leverage that advantage when going at it with other OW airlines. Could we see Qatar break away and bring all of their serfdom with them to form a new alliance?
Sounds like the UAE (through Emirates) is lobbying Australia for this to punish Qatar.
Forgive me if it's obvious and I can't see it, but what is the benefit of Qatar (or any other airline) being in Oneworld if they don't like it? And conversely, who cares if they left - in other words, how would it impact Qantas for example, if Qatar left OW? Why should they care or be worried (this goes for any airline in the alliance)?
@ Dennis - each of the US3 and Europe 'Big 3' are in a respective global alliance. Qatar is the only ME3 in one.
So, previously that was an edge Qatar had over Emirates and Etihad.
It is less important now that Etihad has gone so downhill but Qatar still have investments in several Oneworld airlines.
I still think there's benefit in Qatar being in a premium alliance like Oneworld while there is...
@ Dennis - each of the US3 and Europe 'Big 3' are in a respective global alliance. Qatar is the only ME3 in one.
So, previously that was an edge Qatar had over Emirates and Etihad.
It is less important now that Etihad has gone so downhill but Qatar still have investments in several Oneworld airlines.
I still think there's benefit in Qatar being in a premium alliance like Oneworld while there is restrictions against their growth like the Gulf Blockade and the Australian Air Services Agreement
Qantas air fares are far more competitive in the past few years (save for peak times where the balloon well past the competition).
Emirates is run far more transparently than Qatar is and enjoys fewer government benefits. Not saying they’re run without government subsidies but EK don’t often fly aircraft half empty like QR do on some routes.