It has obviously been an incredibly rough year for airlines in the Gulf region, given the impact of the Iran war. It’s not just that local demand has decreased, but these airlines are also all about connecting people traveling between other regions of the world, and many people have been hesitant to transit the Middle East.
With demand down so much, Qatar Airways has just quietly retired a fleet type, and is even sending some of its pilots to go work in Rwanda…
Qatar Airways quietly dumps its Airbus A330 fleet
Reuters reports how Qatar Airways has just retired its passenger Airbus A330 fleet, which made up 7% of capacity at the airline as of earlier this year. In fairness, these planes were already near retirement before the war started, so this is hardly the most drastic move. For that matter, the planes were actually supposed to be retired years ago, but were kept due to delivery delays on other aircraft, so the airline needed them to meet demand.
Qatar Airways also started leasing four additional A330s from Oman Air last year, but the planes never actually entered service. Over the past couple of decades, Qatar Airways had 45 Airbus A330s, including 29 A330-200s and 16 A330-300s. They started to be delivered in 2002, but were phased out over time. With the A330s being retired, one can’t help but wonder how much life the small A380 fleet will have left…
In a statement, a Qatar Airways spokesperson said the airline regularly reviews its fleet, and “retiring older aircraft and introducing newer, more efficient aircraft as they are delivered” is a normal practice. It was also pointed out how the airline expects to receive 138 new aircraft over the next five years.
With the airline having an excess of pilots, Qatar Airways has also given some pilots the opportunity to work at RwandAir, which has longstanding ties with Qatar Airways. RwandAir even acquired an ex-Qatar Airways A330 earlier this year.
Regarding pilots moving from Qatar Airways to RwandAir, the airline spokesperson said “a group of Qatar Airways A330 pilots are being offered a voluntary short-term secondment opportunity with RwandAir.”
Qatar Airways also hasn’t been able to raise fares
Airlines across the globe have of course been grappling with the issue of much higher fuel prices, which are a massive expense for airlines. However, on a global basis:
- Demand has continued to remain robust, so at least there’s not an issue with filling planes
- Airlines have broadly been able to increase fares to largely offset their higher fuel bills, which helps avoid this being a full-on crisis across the board
Unfortunately in the case of Qatar Airways, they’re being screwed on both ends — they’re seeing a massive drop in demand, and they’re also unable to raise fares.
Skift recently reported on how Qatar Airways CEO Hamad Al-Khater said the carrier is not passing on increased fuel costs to customers. He commented that “we’re just kicking the can down the road from that side of things, and as a result, we just have to get used to this fuel price that’s higher.” He continued that “we don’t want to pass it to our customers just yet, that’s going to be an option of last resort, just because of the competitive landscape.”
Indeed, Qatar Airways isn’t keeping fares lower out of the kindness of its heart. I mean, any reasonable company would try to recoup higher costs. However, the issue is that when demand is down and many people are scared to travel through a region, trying to compete on price is one of the only options.
Frankly I’m a little confused by the “last resort” comments more broadly. Presumably the pricing decision is based on an analysis of the elasticity of demand. What is the “last resort” that would cause the airline to decide that significantly increasing pricing is the right move?
Not to make this political, but one certainly wonders how Qatar is feeling about its Boeing 747-8 gift to Trump, given how this war has impacted the country (including the national airline), with seemingly no exit strategy.
Bottom line
Qatar Airways is struggling at the moment due to a combination of reduced demand plus much higher costs — fortunately the carrier’s owner has very deep pockets. 😉 Nonetheless, Qatar Airways is taking action to protect the business, and that includes retiring the Airbus A330 fleet, which is no longer in passenger service. Given the excess pilots the airline has, some are even being sent to RwandAir.
While all airlines are suffering from higher jet fuel costs, Qatar Airways (and other carriers in the Gulf) haven’t really been able to raise fares due to the extent to which demand is down, so that’s a double whammy for them.
What do you make of Qatar Airways’ A330 retirement? Do you think we’ll see A380s retired soon as well?
Qatar is essentially funding both sides of this war (and a lot of the useful idiot propaganda that well meaning college kids are latching on to) ... hard to feel bad for their national airline.
@Justin
Lordy not that recycled nonsense again.
Why? Truth hurts? Qatar is a nasty Islamic family run fiefdom with zero respect for civil rights and a lot of sympathy for the Iranian regime.
Fellas, woah there, easy now... I hear Jared is already en route; there should be a 'peace deal' and a new luxury island resort bunker thingy, in no time! /s (again, if anyone needed it.)
Huh, that's all so interesting. And I thought those campus protests were long-over (like, 2024, just long enough to hand the election to...) Anyway, at least our Dear Leader got a beautiful new 747 'gift' with no strings attached! Such a good businessman... /s (in case anyone really needed it.)
I don't understand this at all. Our Commander in Chief has assured us there is no war.
Yeah, I wouldn't route through Doha (or anywhere in the ME) anytime soon.
Good for Rwanda, I guess. Qatar was investing in the new airport (Bugesera) in Rwanda as well. (Kigali is actually quite nice. Go see some mountain gorillas!)
"Kigali is actually quite nice."
You're referring to the city and not the airport, aren't you? The airport is...a box. The city itself is fascinating.
The daily price to see the gorillas in Volcanoes National Park is at US $1,500 per day now. I've done this and would do it again (though I visited the park LONG before the price got ridiculous), but the cost is through the roof. It's a quarter of that in...
"Kigali is actually quite nice."
You're referring to the city and not the airport, aren't you? The airport is...a box. The city itself is fascinating.
The daily price to see the gorillas in Volcanoes National Park is at US $1,500 per day now. I've done this and would do it again (though I visited the park LONG before the price got ridiculous), but the cost is through the roof. It's a quarter of that in the DRC, and about half that in Uganda, though I'd argue that Rwanda is the best site. And the four armed soldiers that accompanied a friend of mine and I on a hike to Dian Fossey's house were there to protect us from "water buffalo." Uh huh. Sure Jan.
Yes, I meant the city. (The current airport, KGL, is... not the best. In fact, I recall it's quite a fortress. Very intense vehicular security process even to enter the grounds.) You are also correct that the permits are not cheap, but it does go to support their conservation efforts. For safety, DRC is a no-go; Uganda is still dealing with things, too. As for the 'escort,' indeed, I recall this as well. Beautiful hike...
Yes, I meant the city. (The current airport, KGL, is... not the best. In fact, I recall it's quite a fortress. Very intense vehicular security process even to enter the grounds.) You are also correct that the permits are not cheap, but it does go to support their conservation efforts. For safety, DRC is a no-go; Uganda is still dealing with things, too. As for the 'escort,' indeed, I recall this as well. Beautiful hike at least. Going up to Bisoke is worthwhile, too, though exhausting. Glad you've been! :-)
I wonder what sort of load factors they have right now.
Etihad used to publish monthly load factors but funnily enough seemed to have stopped earlier this year.
Flown them a few times over the past couple of months. Flights were nearly full and DOH and the lounges seemed typically busy. But the peak summer travels obviously helped, be curious what their long term bookings look like. Certainly a lot of saver economy tickets available with Avios at the moment
I also flew QR this summer. While the flights were packed, keep in mind that QR kept prices very low and attractive this summer compared to normal fares (same with EY and EK). I managed to book a round-trip last minute ticket on QR for ultra long haul travel from the US for the same price as I would pay booking months out for off-peak travel. QR normally charges more for summer travel on that...
I also flew QR this summer. While the flights were packed, keep in mind that QR kept prices very low and attractive this summer compared to normal fares (same with EY and EK). I managed to book a round-trip last minute ticket on QR for ultra long haul travel from the US for the same price as I would pay booking months out for off-peak travel. QR normally charges more for summer travel on that route I frequent, even when booking in advance (and even more when booking last minute). That wasn't the case this time (nor is it now), so while they can fill their planes, I doubt they're making money.
Keep in mind that Emirates, Etihad, and Qatar serve many high volume destinations for which they have the best itineraries by far for travel to those places (for some destinations, they are the only option), so they are still the best choice for those travelers (though the fares in most of those markets are very low, so they don't make a lot of money).
I would imagine that Qatar (and other gulf carriers) have an advantage with aviation fuel in that they only pay the higher prices on at most one leg of the journey. There's a whole bunch of aviation fuel that's been produced but can't get through the Hormuz strait that they can burn (and so should be priced much lower)
Does anyone think the new Doh-Bog-Ccs route will materialize? It's been postponed twice already. The first time it was soon after the earthquake in Venezuela (so, I guess that one made sense). And a couple months later it was further pushed to November (no formal announcement).
It's bookable but is it realistic?
PS. Award availability was sooooo good on this route :'(
Don't worry, they're getting the money back from the loyalty program by doubling award prices and making awards harder to book.
But they only had 15 active A330s. So its not a massive loss. I wonder if the B777 with 2x2x2 J class are next on the block are on the block. They also lease a few B777s from CX.
If only this would translate into North American partner J availability…
This. Whatever QR's financial situation, there's obviously no incentive to increase awards through AA. Try to get a J award across the Atlantic. Or any non-stop award from DOH to MLE. US customers would book all day, if they made any of those available.
Probably that means that they are not making money on partner awards, and would only release space if the "aspirational" aspect would create cash revenue by word of mouth, but as cash tickets are not there, the rest follows. It's all a pyramid in the end, if the base is narrow, so is the tip.
The cost of fuel sob story is actually very theoretical: Qatar produces jet fuel it cannot export, so the...
Probably that means that they are not making money on partner awards, and would only release space if the "aspirational" aspect would create cash revenue by word of mouth, but as cash tickets are not there, the rest follows. It's all a pyramid in the end, if the base is narrow, so is the tip.
The cost of fuel sob story is actually very theoretical: Qatar produces jet fuel it cannot export, so the cost of jet fuel from DOH is likely lower than before the conflict. The issue of cost is mostly at outstations. However, most of their aircraft have way more range than they need on most routes, allowing them to carry more Qatari fuel for part of the return trip.
The issue for Qatar is really that people avoid travelling the region, which explains why the carriers that are not exposed to the region collect higher fill rates and yields.
ME3 carriers are used to have a competitive advantage due to lower cost of fuel, access to capital, advantageous geographical location and lenient labour laws. Now they need to compensate for a geographical disadvantage, the business equation does not look the same. They might need to recruit someone from Finnair :D
^This guy gets it.
A drop in demand and unable to raise fares.... since when did that become the economically rational strategy to adopt?
SAS announced getting some A330ceos to bridge the time to getting new A330neos. mmhh.... I wonder if some of the birds will end up at SAS or more growth for Rwandair.
They’ll get the planes from Virgin Atlantic.
Fairly certain Oman's A330 did enter service?
Correct, 2 of them entered service. They mainly operated JED, CMB, and WAW for a brief while
QATAR SHOULD RESTRUCTURE THE ROUTES COMPLY UNTIL THE SITUATION RETURNED TO NORMALCY
THEY CAN START NEW POPULAR ROUTES WITHOUT TOUCHING
WAR ZONES AND THEY CAN MAINTAIN THEIR REVENUES AND
PROFITS TILL THE WAR IS STOPPED TOTALLY.
Did you get your Caps Lock key stuck?
As unfortunate as it is, off peak recently I've flown Qsuites with <1/4 of the cabin full on flights sold at absolute rock bottom fares, so it makes sense that something would have to give.
(For some reason this doesn't include any of my U.S. flights which seem fairly busy... please stop flying QR so I can get my hands on Qsuite saver availability, fellow Americans)
Agree with my follow American please stop buying Q suite to the US. It’s always full and I can’t never find a Q suite seats with my Qatar airways Miles. I took a few flights to Spain and England Amsterdam. It’s always full and Ireland also so I don’t know about less demand comment
The conditions of conflicts in ME are beginning to show on QA Flights. Poor movie selections, Business Class does not have the same Goodies they used to have, even the water Bottles are not easily available. It is very sad to see this.
Zero sympathy. They can stay afloat with all their dirty money.
Your article is using the wrong name. It is called the Persian Gulf. The correct name is missing. Are you trying to support the Arabs who pay the media to stop using the correct name.
Have business class booking for JFK to Mumbai on Etihad for $2500 each RT for next month all legs on their A350. I'm guessing the current situation had something to do with the very decent price.
Good to see them gone. QR had the least hard product consistency among the ME3, and these A330s were supposed to be retired five years or so according to the original plan.