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HomeEconomyQatar spurns Alitalia; to pursue other acquisitions

Qatar spurns Alitalia; to pursue other acquisitions

qatar airwaysQatar Airways Ltd. Chief Executive Officer Akbar Al Baker said he’s pursuing acquisitions after reviving an investment strategy that saw the company offered stakes in carriers including Italy’s Alitalia SpA.

The second-biggest Gulf airline is “actively discussing opportunities” with other passenger carriers, Al Baker said in an interview, without specifying where talks are focused.

“I would not like to pre-empt our decision,” he said. “We would rather keep it to ourself for the time being, of where we want to invest. When we see that there are strong synergies between the two carriers we are open to investment.”

Qatar Airways was “offered” unprofitable Greek carrier Olympic Airlines, Air Seychelles and “even Air Serbia,” while Alitalia, which has suffered years of losses, has indicated its availability “several times over the past five years,” Al Baker said, adding that none of the deals came through.

“We want to make sure that we don’t create a burden on us,” the CEO said in Edinburgh. “We want airlines that we acquire to be complimentary to us, we don’t want to get involved in fixing other people’s problems.”

Rome-based Alitalia is in the final stages of investment talks with Abu Dhabi-based Etihad Airways PJSC, one of Doha-based Qatar Air’s biggest rivals, which has also taken minority stakes in Air Serbia and Air Seychelles.

“We were offered umpteen airlines that today have either been acquired or are in the process,” Al Baker said. Qatar Air “will not be rushed into taking investments in airlines in bits and pieces,” said, adding of Etihad’s purchases that: “Each airline in our region has a different strategy.”

Qatar Airways has never considered taking stakes in Indian carriers such as budget operator SpiceJet Ltd., the CEO said, with talks limited to joint ticket sales via code-sharing.

Al Baker said he has abandoned plans to set up a freight hub via investment in an existing operator after exiting a 35 percent stake in Cargolux Airlines International SA following a strategy dispute with Europe’s No. 1 cargo-only carrier.

“With the failure of our partnership with Cargolux we have decided not to join with any cargo operator, but to build our own cargo network in a very aggressive and a strong way,” he said, adding that there have been no talks about investment in the airline arm of TNT Express NV, which has a hub in Liege.

Al Baker said any partnerships will be limited to providing feed for its network, and that Luxembourg-based Cargolux had been dominated by “vested interests.”

A business-class-only London Heathrow service that will be offered using Airbus Group NV A319 narrow-bodies limited to 40 seats is being added because premium demand isn’t being met, Al Baker said. The smaller planes will provide “a more personalized experience” than Qatar’s A380 superjumbos, the first of which will serve the route from June, but with the same cabin product.

The CEO said his company is also interested in operating the A319 to London City Airport, but is unable to do so because the aircraft “is a bit heavy” to take off from the urban location’s short runway with the required fuel load.

“We would love to operate from London City provided the authorities agree to extend the runway,” he said, adding that a 600-meter addition would allow operations with a full load.

Al Baker said that the Airbus A350 wide-body, for which he is the first customer, is on track for delivery at the start of an October-December window agreed with the manufacturer.

“Airbus is very confident,” he said. “The test program is going absolutely fantastically and there is a possibility that we will receive our aircraft earlier than envisaged.”

Talks are ongoing with Boeing Co. to achieve sign-off on an order for the new 777X jet announced at November’s Dubai Air Show, Al Baker said. Negotiations are focused on issues other than cost and should be concluded “imminently,” he said.

“There are so many other technical and contractual aspects that need to be finalized and this is the process that we are now doing,” he said. “Pricing has already been agreed.”

Al Baker was speaking ahead of Qatar Air’s introduction of flights to Edinburgh from Doha on May 28, which will be performed by Boeing 787 Dreamliners. The route should benefit from feeder traffic once Oneworld ally US Airways commences trans-Atlantic services, he said.

Qatar Airways is continuing work to permit joint ticket sales with Oneworld members after joining the alliance last year, according to Al Baker, with a code-share with British Airways likely to be rolled out after the summer, he said.

“We are in advanced talks with BA,” he said, with the focus likely to be on the U.K. carrier adding its code to Asian routes beyond Doha, including some to Pakistan permitted by a new air-services accord between Qatar and the government there.-Bloomberg