| Code: 135503 |

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Qatar Airways CEO Akbar Al Baker ruled out aircraft cancellations after four Middle Eastern countries blocked the airline from using their airspace, but the airline will start redeploying capacity to new destinations.

“We still need some time, but we will redeploy very soon,” CEO Akbar Al Baker said at the Paris Air Show Monday. The airline plans to bring forward the launch of new destinations such as Skopje, Macedonia; Ljubljana, Slovenia; and Sarajevo, Bosnia and Herzegovina as well as open more destinations in Iran to use excess narrowbody capacity freed up as a result of the blockade. The airline will launch new long-haul destinations in South America in January—Rio de Janeiro and Santiago de Chile—despite the much increased flight time. Flights to Brazil now have to take a two-hour detour because of the airspace closures.

Earlier this month Egypt, Saudi-Arabia, the UAE and Bahrain closed their airspace for Qatar-registered aircraft as part of a diplomatic conflict over Qatar’s alleged support of Islamic terrorism. Al Baker stressed that in his view “no country has the right to block airspace” and that the four countries were “in violation of the air transport agreement.” He also criticized ICAO for not having acted in the past two weeks despite what he considers to be a “gross violation of international law” and ICAO’s own rules. The blockade is “an unprecedented illegal act,” Al Baker said.

He conceded the situation was having a major effect on the airline’s costs, not only because of longer flight times and operational restrictions, but also because of a lower level of bookings. A lot of US and European group bookings were canceled after the ban was announced, Al Baker said. “But people start to realize that it is a diplomatic issue that has nothing to do with the safety of the airline.” Therefore, Qatar Airways was seeing the booking curve “go back up again.”

Al Baker asserted that “we will never cancel orders because of the conflict.” The airline is still “short of widebody capacity” because of delayed Airbus A350 deliveries. The airline will take five more long-haul aircraft this year.

On the narrowbody side, Qatar Airways firmed an order for 20 Boeing 737-8s that includes 40 options. The carrier plans to take the first three 737-8s in the second half of 2018. Al Baker is also near an agreement with Airbus and CFM International about the conversion of an existing order for A320neo aircraft into A321neos powered by CFM LEAP-1A engines. Qatar was originally the launch customer for the Pratt & Whitney PW1000G-powered version of the aircraft, but refused to ever take delivery of them because of the issues surrounding the engines.

According to Al Baker, the 737-8s will replace the existing A320 fleet. Qatar Airways could also use the options to start up the planned domestic airline in India. The company has not yet filed a formal application to the Indian authorities to launch the airline, but has received “assurances for the launch” from the Indian government.

Al Baker said he had no interest in ordering more A380s even after Airbus proposed the A380-plus project. The airline still has outstanding orders for two additional aircraft and options for another three.

Boeing has been pitching at customers, saying “Boeing should fine-tune the 787-8. They don’t have to reinvent the wheel.” Qatar Airways will move the 787-8s in its fleet to NMA-geared routes once it has taken delivery of 787-9s. The airline operates 30 -8s and has 30 -9s on firm order. Boeing originally launched a short- to medium-haul version of the 787, the 787-3, with Japan Airlines and All Nippon Airways as customers, but it dropped the version later.

 

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