Qatar Airways’ Pandemic Recovery Advantage

Qatar Airways’ Pandemic Recovery Advantage

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It goes without saying that the pandemic has been absolutely catastrophic for the airline industry. Most airlines are in a rather fragile position, and at best they hope that in a few years they’ll be back to where they were pre-pandemic. I’d say there’s one major exception.

Why Qatar Airways is better off than rivals

As we look at airlines around the world, I can’t help but think that Qatar Airways is uniquely positioned, and might actually emerge from the pandemic stronger than ever before.

That’s the case both in absolute terms, and also in relative terms (compared to the Gulf carrier’s biggest rivals). Some of these positive changes are specific to the pandemic, while others aren’t. In no particular order, here’s why I think Qatar Airways is in such a good position:

The Gulf blockade is over

Perhaps the best thing to happen for Qatar Airways in the past year is that the Gulf blockade has come to an end. Since 2017 Qatar didn’t have relations with Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt.

This both restricted Qatar Airways’ ability to fly to these countries, and also to use their airspace. As of recently this blockade is over.

Not only is Qatar Airways saving a huge amount of money by no longer having to make huge detours when flying, but the airline can now also serve nearby markets once again, making it much easier to fill flights around the globe. Keep in mind that Saudi Arabia was one of Qatar Airways’ biggest markets pre-pandemic.

Qatar Airways flights have made huge detours due to the blockade

Strong new partnerships in the United States

For years we saw a huge spat between the “big three” Gulf carriers and the “big three” US carriers over subsidies. Not only has this controversy come to an end, but arguably Qatar Airways has secured some really lucrative new partnerships with US carriers.

In addition to Qatar Airways being part of oneworld, the airline has announced new strategic alliances with Alaska Airlines, American Airlines, and JetBlue. This is pretty major, and Qatar Airways has already been stealing market share from Emirates at US gateways, especially on the West Coast.

Qatar Airways has a huge partnership advantage in the USA

Etihad Airways is no longer a major competitor

Historically Qatar Airways has had to compete fiercely against both Emirates and Etihad for sixth freedom markets (which is when airlines are essentially carrying passengers between two other countries via their hub). While Etihad Airways has been headed in the “boutique” airline direction for a while, the pandemic has certainly expedited that.

Etihad is retiring both its Airbus A380 and Boeing 777 fleet, and the reality is that when all is said and done, Etihad will look more like Oman Air than Emirates or Qatar Airways. While Etihad will still compete in some sixth freedom markets, it won’t do so to the same scale as in the past.

Etihad is retiring its A380 & 777 fleets

Qatar Airways’ rebound advantage over Emirates

Qatar Airways has a significant advantage over Emirates when it comes to a travel rebound. Qatar Airways has gained a significant amount of sixth freedom market share from Emirates in recent months, and the airline will continue to be better positioned as travel rebounds. Why?

  • Qatar Airways has a lot more fleet flexibility, as the airlines has everything from A319s to A350s; Emirates has the disadvantage of only having 777s and A380s, which don’t allow the airline to serve smaller markets, and which also make it harder to gradually add back capacity (while Emirates has a partnership with FlyDubai, it’s not nearly as well integrated as all the planes just belonging to a single airline)
  • Qatar Airways’ network right now is larger than Emirates’, and as we continue to see a travel recovery, that will make it much easier for the airline to add more destinations and fill planes
  • Qatar Airways has a huge product advantage over Emirates right now; Emirates is primarily flying 777s, and Qatar Airways’ long haul business class product is so much better than Emirates’ 777 business class

Of course it’s worth acknowledging that Dubai is a significantly bigger O&D market than Doha, both for tourism and business. So Emirates of course has the advantage of serving a larger market, but the above was focused on sixth freedom markets.

Qatar Airways has a versatile fleet, which is important in a recovery

Yes, Qatar Airways is government owned, but…

Of course some will (correctly) point out that Qatar Airways is government owned, and that it’s nice to be backed by one of the richest countries in the world. That’s absolutely true, though I’d note a few things:

  • It’s also nice to be a publicly traded company, spend all your cash on stock buybacks, and then get billions of dollars in taxpayer funds because you had no money in the bank 😉
  • Different airlines have different profit motives — the question for some government owned airlines isn’t whether they turn a direct profit, but rather if they’re a net-positive for the economy of their country, and I’d argue that Qatar Airways very much helps keep Qatar on the map
  • Ultimately there are well run government owned airlines, and poorly run ones; Qatar Airways is no Alitalia, Garuda Indonesia, Malaysia Airlines, or South African Airways, that’s for sure

Bottom line

I don’t think there’s a single airline in the world that has as many relative advantages coming out of the pandemic as Qatar Airways.

The airline has some useful new partnerships, the Gulf blockade that hindered the airline for years is over, and the airline has a huge advantage over rivals Etihad (because the airline is rapidly shrinking) and Emirates (because the airline doesn’t exactly have the right fleet for gradually ramping up operations).

While most other airlines have greatly scaled back their route networks, Qatar Airways has maintained a relatively steady network, and that will benefit the airline as demand starts to recover.

I’m curious to see if Qatar Airways can maintain this momentum and become even stronger post-pandemic.

Anyone else think Qatar Airways is well positioned for a recovery?

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  1. Dominic Yeo

    Qatar AIrways is bluffing.
    They are not operating at the level that they claim they are.

    And as for them taking stakes in other carriers. They aren't respected primarily because the way Qatar does business, its not right.

    Paying for partner airline cooperation has to be really crass.

    And Qatar AIrways can be noble and stuff, but the fact is that Qatar has questionable allegiances, they are not currently planning to help the airport...

    Qatar AIrways is bluffing.
    They are not operating at the level that they claim they are.

    And as for them taking stakes in other carriers. They aren't respected primarily because the way Qatar does business, its not right.

    Paying for partner airline cooperation has to be really crass.

    And Qatar AIrways can be noble and stuff, but the fact is that Qatar has questionable allegiances, they are not currently planning to help the airport fend of rising sea levels. And that Y design was an inftrastrucure blockade in the making for HKG, it will not solve itself here.

  2. Jan

    @The nice Paul
    Burj Khalifa
    Burj Al Arab
    Dubai Marina
    Dubai Frame
    Dubai Fountains
    Eating a gold-wrapped wagyu cheeseburger for the ‘gram
    Global Village
    Off Road Dunes tour
    etc

    I’m not particularly interested on Doha, if I had to compare it to Dubai. Yes it’s chintzy as all get out, but maybe that’s the point. Maybe most people feel the same way.
    Bonus points for me because I am a fan of architecture

  3. The nice Paul

    @Jan
    I’m genuinely unclear why people think Dubai is a “global destination” while Doha is not. I confess I don’t know anything about designer shopping, so I guess that could be the difference (though Doha didn’t strike me as being short of extraordinarily expensive upmarket malls — including one built to resemble a classical Italian quarter, but which had air conditioning vents actually in the streets. The energy profligacy was almost unbelievable. But I...

    @Jan
    I’m genuinely unclear why people think Dubai is a “global destination” while Doha is not. I confess I don’t know anything about designer shopping, so I guess that could be the difference (though Doha didn’t strike me as being short of extraordinarily expensive upmarket malls — including one built to resemble a classical Italian quarter, but which had air conditioning vents actually in the streets. The energy profligacy was almost unbelievable. But I digress).

    For an old fart like me, Dubai has a branch of the Louvre and a couple of good galleries.

    Doha has the Gallery of Islamic Art which is pretty much world-class, and a National Museum that is one of the best I’ve encountered, along with an assortment of other museums (and an unexpectedly brilliant national library), desert safaris and assorted falconry.

    I found more than enough to entertain me for a long weekend in Doha, though I suspect a week would be pushing it.

    What does Dubai have that is so much better?

    Oh — Qatar is hosting the World Cup next year, covid permitting, so I expect it will get a significant boost.

  4. Martin

    @JW the the bellies are not always fully loaded on QR. Let's see how economic their "resilience" has been once we get to see the figures are in their next annual report.

  5. Ben W

    One of the downsides of QR continuing to fly around the world is getting themselves added to the UK's 'red list' which has caused quite an inconvenience.

  6. Sam A

    They have earned kudos for keeping flights going even when national carriers (looking at you Qantas) abandoned customers overseas... but I still refuse to fly them based on the strip search incident in October https://onemileatatime.com/qatar-airways-passengers-strip-searched/ I'm really down to just Singapore Airlines for Australia as Qantas and Emirates both cancelled flights without any alternative and I'm still waiting for a refund from March 2020 from Qantas!

  7. JW

    @Martin Rubbish... This shows how little you understand the dynamics of operations during covid, its not who the airlines are carrying but what they are carrying that makes them profitable during this period. Passenger number counts for nothing if you have a load of vaccines in the belly. QR has done an amazing job reconcelliating with OW partners and keeping in the air to ensure that people are able to reach where they need for...

    @Martin Rubbish... This shows how little you understand the dynamics of operations during covid, its not who the airlines are carrying but what they are carrying that makes them profitable during this period. Passenger number counts for nothing if you have a load of vaccines in the belly. QR has done an amazing job reconcelliating with OW partners and keeping in the air to ensure that people are able to reach where they need for all circumstances, that itself is already commendable.

  8. Matt

    So glad I was able to take advantage of the ~$2K RT qsuites deal in late feb/early march 20 before the shutdown. Got to see Malaysia, Thailand, and Cambodia. Before they also “cheapened” their product as other users have been saying. The Qatar lounge in Doha is gorgeous. Was in the air about 24 hours each way but I have never enjoyed being up in the air more!

  9. Jan

    I'm going to second/third/fourth etc the other posters here. Dubai is truly a global destination now, and Doha, and even Abu Dhabi, are just playing catch up. This is Emirates' biggest advantage. In fact, once restrictions open up, I might hit up a JFK->DXB in an A380 in the future!

  10. Udo

    What DC Yukon said, I had them reimburse a five figure sum for four business long haul flights, given the lounge access nonsense, inability to book seats without paying a ludicrous extra amount, etc. Not spending the obligatory DOH overnight without lounge access. Weird time to eliminate competitiveness ‍♂️.

  11. John T

    The problem Qatar Airways will have for the foreseeable future is that very few people actually want to visit Qatar. It's fine for a 24 hour stopover to sleep in a proper bed but there's not enough to do there for say a weeks vacation. They can build as many luxury hotels as they want but that won't make tourists flock there.

    Dubai is truly a destination in itself and Emirates will always have that advantage over Qatar.

  12. Nick in Chicago

    Best line in the article is calling out the most indisputable proof that the US3 are just as subsidized as the ME3. Where are all of those who were arguing in every blog about Qatar having an unfair advantage? Crickets....

  13. DC Yukon

    Sort of. I hate how they have started to offer a cheapened version of business class - no advance seat assignments and no lounge access. Why they felt they had to cut these limited amenities during a pandemic when flights were nearly empty is beyond me. I assume they will also do away with hotel rooms at Doha for discounted fares for long connection times once entry to Qatar is no longer banned.

    ...

    Sort of. I hate how they have started to offer a cheapened version of business class - no advance seat assignments and no lounge access. Why they felt they had to cut these limited amenities during a pandemic when flights were nearly empty is beyond me. I assume they will also do away with hotel rooms at Doha for discounted fares for long connection times once entry to Qatar is no longer banned.

    I've never flown them in coach and have often booked "bargain" (still several thousand dollars) ultra long-haul business class flights when available, but this cheapened version means those fares will no longer be available, as the next highest business class fare is a difference of several thousand dollars (based on every destination I've checked). I only ever flew them for personal reasons, so it means bargains will no longer be available with the same standard of service. It is debatable whether I could put up with getting stuck with other folks in middle seats in a 4 seat QSuites configuration or whether I could tolerate 10+ hours at DOH with no lounge or hotel (unless Amex or Priority Pass offer an alternative better options). Yes, I got spoiled. Shame they decided to cheapen their premium product.

  14. Sabine

    @Martin
    You are spot on! Could not agree more!

  15. khatl

    The other key point is that the Gulf blockade already had made Qatar aggressively review their cost base, cut unprofitable routes etc. The pandemic was an extension of that process that they could act on rapidly (vs every other airline having to spends months in a scramble to cut costs). In other words, they didn't fall as hard and incur huge losses, which leaves them better positioned to come out as travel picks up

  16. Sabine

    Qatar Airways may be one of the best in the air, is great with its marketing spiel and its CEO is controversial and loves to boast but if things go wrong on the ground they are just a terrible terrible airline. And, not all the destinations they announce actually take off! Remember Las Vegas?

    I also agree that Dubai with its very versatile economy and tourism offerings should not be underestimated as an important...

    Qatar Airways may be one of the best in the air, is great with its marketing spiel and its CEO is controversial and loves to boast but if things go wrong on the ground they are just a terrible terrible airline. And, not all the destinations they announce actually take off! Remember Las Vegas?

    I also agree that Dubai with its very versatile economy and tourism offerings should not be underestimated as an important global business and tourism destination. Tourism numbers have gone up continuously over the years (pre Covid) and will increase again with EXPO kicking off this autumn. Emirates partnering up with Flydubai also opens up new destinations. Doha has the World cup coming next year but in general has less point to point traffic.

    I think Emirates’ premium economy on the A380 will be a game changer, with some of the existing A380 also now being fitted with it. The A380 is still my favourite plane and I am happy Emirates will fly it for quite some years to come.

    Covid-19 makes travelling still very unpredictable with plenty of border restrictions in 2021 and for me in the end it’s not an airlines’ market share but its great reliable service in the air AND on the ground that count! On the ground Qatar Airways is just not one of them.

  17. W

    This is a really interesting article and I agree with the above points. However, EK does have more O&D demand with Dubai and carries a large amount of the Indian Subcontinent traffic, with whom they have built up brand recognition. Therefore, it won't be too difficult for EK to fill up their planes once a vaccine is in this part of the world. But until then, I do think QR will be doing better.

  18. PeterCS

    I totally agree with the points above, in the article and in the comment section. What maybe have been left out is that Dubai remains a globalized, world class city, and an important business and tourist destination. With the demise of Etihad, Abu Dhabi will be also easier to reach with ground transportation from Dubai. Putting the World Cup aside, Doha won’t really generate as much point to point traffic. That of course doesn’t change...

    I totally agree with the points above, in the article and in the comment section. What maybe have been left out is that Dubai remains a globalized, world class city, and an important business and tourist destination. With the demise of Etihad, Abu Dhabi will be also easier to reach with ground transportation from Dubai. Putting the World Cup aside, Doha won’t really generate as much point to point traffic. That of course doesn’t change the big picture, but it will keep Emirates strong

  19. SAN_POA

    I wonder if the 2022 world cup will be a boon for QR as well. It might make sense to keep their name recognition intact, and leverage the less competitive environment to have a knockout 2022.

  20. Martin

    Complete disagree with your judgement, Ben. QR is all about ego and prestige, in the pandemic more than ever. Looking at QR's economics, one can absolutely put them in a row with other poorly run gvmnt-owned airlines. The only difference is that Qatar has so much more monetary power than the other states that run airlines. EK's bottom line has been in fact better than QR's in the last reports, as you know.

    QR...

    Complete disagree with your judgement, Ben. QR is all about ego and prestige, in the pandemic more than ever. Looking at QR's economics, one can absolutely put them in a row with other poorly run gvmnt-owned airlines. The only difference is that Qatar has so much more monetary power than the other states that run airlines. EK's bottom line has been in fact better than QR's in the last reports, as you know.

    QR has -not- made use of their flexible fleet. Instead, they senselessly dump capacity into the market. It is insane to fly largely double daily DOH-ARN with A350/B787 and consistently less than 30% SLF. This is an overkill that reminds me more of EY under James Hogan. And just look at Al Baker and Antinori when they speak about "resilience" and "pride" - this is what QR is all about.

    If one had unlimited funding, anyone could be a fantastic manager. And when Al Baker says that the coming support will not be a subsidy but instead equity, it's a joke. How do they want to increase equity if they already have 100% equity in the company? CNN and influencers will not be critical when he says so, otherwise Quest and Chui would not be invited to promotional flights again.

  21. Tim Dunn

    I have heard of countless individuals that have been able to get out of countries they wanted to leave because of QR's continued operations during the pandemic- so they have had an advantage there.

    QR also operates a much smaller percentage of its network to India than Emirates which right now puts EK at a disadvantage.

    Longer term, all of the Middle East airlines including Turkish will have to deal w/ Euro, US and other...

    I have heard of countless individuals that have been able to get out of countries they wanted to leave because of QR's continued operations during the pandemic- so they have had an advantage there.

    QR also operates a much smaller percentage of its network to India than Emirates which right now puts EK at a disadvantage.

    Longer term, all of the Middle East airlines including Turkish will have to deal w/ Euro, US and other nation's global carriers that are not going to let the Middle East carriers gain the advantage they once had. The ME carriers grew because there was huge demand which other airlines could not accommodate or chose not to because of low fares. It is far from clear that dynamic will return any time soon. Middle East airline business models are built on carrying large amounts of connecting traffic to offset their relatively small local markets.

    Relatively speaking QR will be stronger than other Middle East airlines but it is probablyl a stretch to say they are the best positioned airline.

  22. Paul

    One problem for the airline was the strict entry and quarantine requirements for Qatar that are only beginning to relax now. For a long time almost their entire business was transit. Compare that to Emirates who have been able to bring tourists in and take residents out without much fuss for months.

  23. shoeguy

    A really great article and some very valid points. The ME3 is quickly becoming the ME2. Etihad's relevance (and prominence) in the group is quickly fading as it retrenches and licks the wounds of years of failed investments in all the wrong airlines. Emirates is the airline of the pre-pandemic, and not positioned for the post-pandemic world, which will see COVID remain a factor in perpetuity, and cause a much reduced demand for business travel...

    A really great article and some very valid points. The ME3 is quickly becoming the ME2. Etihad's relevance (and prominence) in the group is quickly fading as it retrenches and licks the wounds of years of failed investments in all the wrong airlines. Emirates is the airline of the pre-pandemic, and not positioned for the post-pandemic world, which will see COVID remain a factor in perpetuity, and cause a much reduced demand for business travel and super-connector airlines like EK. Emirates still has a place and DXB will remain a global air hub but not to the extent it was pre-COVID. EK has the wrong fleet to thrive in the new landscape and you correctly point out, its business class, even with improvements, is subpar compared to QR. Qatar has smartly remained in oneworld and grown its relationship in the group, helping to fill a void.

  24. Celine

    I'm flying Qatar Airways nowadays, because they kept flying in the first lockdown in Europe. All other Middle Eastern carriers shut down their operations, so for the moment it gives me the most trust that you will not get stuck in your destination when flying Qatar. They flew months back and forth between Europe with empty passenger planes.

  25. surfdolfin

    Ben, unless I missed it, you failed to mention a "business travel" factor. ie: Where is business travel on Qatar's bottom line?

Featured Comments Load all 25 comments Most helpful comments ( as chosen by the OMAAT community ).

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Dominic Yeo

Qatar AIrways is bluffing. They are not operating at the level that they claim they are. And as for them taking stakes in other carriers. They aren't respected primarily because the way Qatar does business, its not right. Paying for partner airline cooperation has to be really crass. And Qatar AIrways can be noble and stuff, but the fact is that Qatar has questionable allegiances, they are not currently planning to help the airport fend of rising sea levels. And that Y design was an inftrastrucure blockade in the making for HKG, it will not solve itself here.

Jan

@The nice Paul Burj Khalifa Burj Al Arab Dubai Marina Dubai Frame Dubai Fountains Eating a gold-wrapped wagyu cheeseburger for the ‘gram Global Village Off Road Dunes tour etc I’m not particularly interested on Doha, if I had to compare it to Dubai. Yes it’s chintzy as all get out, but maybe that’s the point. Maybe most people feel the same way. Bonus points for me because I am a fan of architecture

The nice Paul

@Jan I’m genuinely unclear why people think Dubai is a “global destination” while Doha is not. I confess I don’t know anything about designer shopping, so I guess that could be the difference (though Doha didn’t strike me as being short of extraordinarily expensive upmarket malls — including one built to resemble a classical Italian quarter, but which had air conditioning vents actually in the streets. The energy profligacy was almost unbelievable. But I digress). For an old fart like me, Dubai has a branch of the Louvre and a couple of good galleries. Doha has the Gallery of Islamic Art which is pretty much world-class, and a National Museum that is one of the best I’ve encountered, along with an assortment of other museums (and an unexpectedly brilliant national library), desert safaris and assorted falconry. I found more than enough to entertain me for a long weekend in Doha, though I suspect a week would be pushing it. What does Dubai have that is so much better? Oh — Qatar is hosting the World Cup next year, covid permitting, so I expect it will get a significant boost.

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