With no end in sight in the ongoing fracas between carriers in the US and Europe and those in the Middle East over alleged subsidies, Qatar Airways chief executive Akbar Al Baker gives his views on why Chinese carriers and others are spared the same accusations.
When asked by Payload Asia in Doha recently about the largely quiet role of Chinese carriers, in what some refer to as the ‘sleeping giants’ of the air cargo sector, Al Baker said: “I agree, the Chinese carriers are sleeping giants. In my mind China is the economic superpower and they have huge growth potential.”
But there is one aspect of these sleeping giants that is seldom discussed within the industry, or by those in the US and Europe who are engaged in the fierce state subsidy rhetoric aimed largely Qatar Airways and its next door neighbor in Dubai.
“I want to put one question to people who always accuse us of subsidies. They never talk about Chinese carriers because the business in China suits them. They want to concentrate on a place where they get the highest yield and no competition and it serves their purpose.
“I don’t mean to say Chinese carriers get subsidies, but Chinese carriers are all government owned – the government puts equity into those companies, the same as my government does in Qatar Airways.
And this he says, like the Chinese carriers is not ongoing equity, but one-time equity from which point the carrier is expected to conduct its business. And for Qatar Airways financing for new aircraft comes not from the government treasury, he points out, but from international financial institutions.
“We run our business on a commercial basis and like Chinese carriers who use infrastructure that belongs to the municipalities of their hubs, same as here the infrastructure belongs to the government. And when governments build infrastructure they don’t build it to get return on it, they build to serve the travelling public and to serve the economic interest of the country.
“So why every time this issue arises that we are criticised as subsidised, but countries like China, India, Russia, African countries other Middle Eastern countries who operate their airlines and infrastructure on the same basis as our government does, nobody talks about them?
“So you already know this is all about not being able to match up the competition – it’s as simple as that. When you look at China the airplanes for the airlines are bought by the government. Imagine if my head of state walked into a Boeing factory and signed an order for 200 airplanes, the shit would hit the fan. But when it happens to other countries nobody talks about it, which means they are showing bias against us.”
When asked for his views on the talk of Chinese carriers being merged into one or two airlines by the country’s central government, Al Baker said he is all for the move.
“I think it will be a very good thing. It will be good because it will bring synergies and also when they merge it will also create more room for international carriers to operate because once they merge they will operate more efficiently,” he said adding that he does not mean they are inefficient, but rather that a merger will unleash unrealised synergies and also free up slots which are now duplicated because there are so many different airlines, he explained.
As for some degree of partnership or cooperation with Chinese carriers, Al Baker is hopeful of some closer relationship down the road. “Yes, I hope in the future we have approaches from Chinese carriers and once they come to fruition, that there will be a very good synergy between us and them,” he said.
He also adds that the relationship with the IAG Group is working well and Qatar Airways is satisfied with the 9.99 per cent stake it has in the group. “We are very satisfied with the way he [Willie Walsh] is managing his business and we carry cargo for him in a very efficient way – so it’s win-win for both and this is exactly what the legacy carriers, Air France-KLM, Lufthansa should do.
“They should realise we are existing, we are not going to evaporate, we are not going to disappear and it’s in their interest to work with us. I’m open for business with anybody. In the interest of Qatar Airways I will even do business with the devil.”
As to whether he has had any discussions with the Franco-Dutch and German carriers on some form of IAG-type cooperation, Al Baker said: “I have the telephone number of everybody. On the personnel level we are all friends and I hope that that friendship can translate into business.”
