MANAMA: Qatar Airways (QA) Group Chief Executive Akbar Al Baker yesterday said he was not in favour of regional consolidation, rejecting any need for the Gulf to join in the trend for mergers which has raised airline profitability elsewhere in the world.
Some industry experts are sceptical as to whether the Gulf needs fast-growing QA and rival carriers Emirates and Etihad with their three big hub airport operations, all within a small geographic location.
In other aviation markets, like the US, the number of airlines has shrunk as carriers have consolidated, helping them become more profitable, so much so that US airlines account for over half of global earnings in the airline industry.
But Al Baker said consolidation could be bad for consumers. “I don’t agree with consolidation, always done to extract capacity and jack up prices,” he said during a panel at Bahrain Airshow, pointing to US carriers as an example.
In Europe, there has been consolidation, with the five largest airline groups controlling around half of the journeys made by air passengers in the region. But there are often calls from aviation industry executives for more consolidation among Europe’s smaller carriers, many of which struggle to post a sustainable profit.
Dan Tok, Minister of Transport for the Czech Republic, said during an EU aviation summit in Amsterdam that Czech airlines shouldn’t necessarily survive just for the sake of it.
“It was part of national pride every country needs to have a national carrier. My feeling is that Europe is too small for so many national carriers,” he said.
Al Baker also took a swipe at legacy European carriers, saying they were disadvantaged by their inefficiencies, not by the growth of Gulf carriers.
Some European carriers like Lufthansa have criticised the likes of QA, which does not publish financial statements, saying they receive unfair state funding, meaning European airlines cannot compete on an equal footing, allegations the Gulf carriers deny. Al Baker said unlike QA, Lufthansa could not operate from its Frankfurt hub 24 hours due to night flying rules, common across Europe. “Lufthansa utilisation is a third of ours — because they have to park their aeroplanes at night because people are getting disturbed by the noise,” he added.
Reuters
