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A Qatar Airways Boeing 777-200LR flying out of Malaga Costa del Sol airport.
Sopa Images | Lightrocket | Getty Images
Qatar Airways says it welcomes the competition from the new Saudi Arabian flag carrier Riyadh Air, although acknowledging a range of challenges and headwinds that the wider industry is currently facing.
“We love competition,” Qatar Airways CEO Akbar Al Baker told CNBC’s Hadley Gamble at the Arabian Travel Market conference in Dubai Monday.
“We will compete like we have been competing all these years,” he added.
Launched in March, Riyadh Air will be the second flag carrier of Saudi Arabia, with a main operational base in Riyadh and wholly owned by Saudi Arabia’s Public Investment Fund. The new airline says it will serve more than 100 destinations globally by 2030 and forms part of the Saudi royal family’s Vision 2030 program.
But the new competition in the region might not mean cheaper air fares. When asked if consumers may see ticket prices going down, Al Baker said: “That’s not going to happen in Qatar Airways.”
“If you want cheap fares, then you have to go and fly airlines that also have a cheap product,” he added.
Another good year?
Last June, Qatar announced record profits of $1.54 billion for the financial year 2021 to 2022. Al Baker is confident the carrier will be able to sustain its stellar results.
“I am very satisfied with our performance. We will have again [a] very good year … we see a very good forward projection for Qatar Airways.”
Al Baker is also optimistic about the recovery of Chinese travel demand following the country’s relaxation of strict lockdowns, saying that it’s going to “rebound, and rebound very quickly.”
Turbulences remain
However, some sticking points in the aviation industry remain, such as supply chain complications and the ongoing war in Ukraine.
“The biggest challenge to the industry is the conflict in Ukraine, and the instability this is creating all over the world,” Al Baker said, adding that the ongoing development is bringing “a lot of uncertainty in the air travel business.”
He cited markets in India, China and the Far East to be those especially affected.
An additional spanner in the works would be a backlog of aircraft deliveries.
“We already have a lot of aircraft on order. We are just struggling to get them on time,” said the CEO.
Consultancy group McKinsey has previously flagged supply chain issues being a main stumbling block looming over the commercial aviation landscape. “Major manufacturers have plans to ramp up production and are facing challenges in scaling capacity and supply chains,” a report dated February 15 noted.
Al Baker elaborated that airlines are not getting their engines on time, and that aircraft manufacturers are not receiving their parts either. He said that the situation is further strained by the limited number of aircraft engine manufacturers, such as General Electric and Rolls Royce.
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