Qatar’s state-owned national carrier could be turned over to private shareholders once its sharp growth starts to level off, the CEO of Qatar Airways has said.
Akbar Al Baker said that for the moment, however, government ownership is helping the airline to grow at its current rapid pace, according to a report by Gulf News.
“Once I have established myself as a very established carrier I wouldn’t mind (being privatized),” Al Baker said this week during a panel discussion at the Arab Air Carriers Organisation’s annual general meeting in Dubai.
Qatar Airways became 100-percent government owned following the country’s leadership transition last year. Before the new Emir assumed power from his father, half of the shares in the airline were owned by the country’s former prime minister, Sheikh Hamad Bin Jassim Al Thani and other shareholders.
Government backing has led to accusations by American and European airline executives that Qatar Airways, along with Gulf carriers Emirates and Etihad, receive unfair state subsidies that enable them to steal market share from the most established airlines.
But some analysts have taken issue with that allegation, and it’s one that Al Baker has denied in the past. The CEO has also previously accused his competitors of poorly running their businesses and being hamstrung by union demands.
He repeated those sentiments this week, saying, according to AFP, “There is enough business … (The legacy carriers) are inefficient. It is the unions that should be blamed.”
Shrugging off the future fate of other airlines, he later added:
Al Baker: I want there to be 3 growing airlines in this region. Moderator: "And for the rest?" Al Baker: "I don't care." #AACO2014
— Will Horton (@winglets747) November 19, 2014
New planes
Meanwhile, earlier this week, Qatar Airways signed an agreement to add eight new Boeing aircraft to its fleet. The deal includes three 777-300ER as well as five 787-8 aircrafts.
The carrier currently has 27 of Boeing’s 777-300 planes as well as 14 of the smaller 787-8s in its fleet, with dozens more on order.
Earlier this year, Al Baker offered a spirited defense of the 787, which were temporarily grounded in January 2013 over worldwide safety concerns and were also the subject of a scathing documentary by Al Jazeera English, which outlined quality control problems with the planes and raised allegations of drug abuse by company workers.
Al Baker made those remarks during the much-delayed debut of Qatar Airways’ first Airbus A380 in September.
This week, Al Baker said the behind-schedule delivery of the Airbus A380s – which was prompted by the airline’s refusal to accept planes that contained what it deemed to be quality defects – cost the carrier US$200 million in lost revenue, according to Gulf News.
The newspaper said Al Baker was non-committal when asked if he would consider buying more of the double-decker planes.
“I cannot judge the performance of the A380 after one month,” he was quoted as saying.
Thoughts?
This Baker always reminds me about Boney M : Ma ma ma ma Ma Baker…
Baker street in London?
Well when the government does decide to privatise I think that is only possible it writes off all of QAs debts, you can’t grow that fast or buy that many plans without significant investment. If the investment costs are included in the privatisation the company would sink rapidly with no government to underwrite it. Anyway any privatisation is at least 10 years away so nothing to worry about.
Oh, did they let that creepy little man speak again without a handler?
Seems so :)))
Al Baker’s statement of “Once I have established myself as a very established carrier I wouldn’t mind (being privatized),” holds little weight. He is now an employee and holds no shares in the company…
I think the opposite. Many companies grant executives shares at the time of an IPO. The employees can then sell those shares (sometimes after a vesting period) and get cash.
Obviously the company is not profitable, which is why they don’t make financials public as would be required for an IPO. Surely the state would love to get some of its investment back, but the company’s debts probably outweigh any proceeds that it would earn from a sale. And it’s probably operating inefficiently.
Doesn’t Baker look and run his organization like Mr Burns from the Simpsons…
….QR being a profitable Co (QDC surely is) their market capitalisation would be fairly large – with stable free cash flows and future growth potential, it would be attractive to investors.
If he’s privatizing QDC, I want in!!!
Annoys me when AAB talks about other airlines getting their houses in order. As if QR is the paragon of business virtue. If it were, surely we’d have seen some numbers by now.
Same game, different set of rules.
I agree. It is easy to run any business when cash flow is not a problem and performance does not matter. As regards the other airlines and unions, this really annoys me. The other airlines are operating in the real world where their governments are signatories to the UN convention on human rights. Unions are permitted as is freedom of movement, freedom of expression and the freedom to marry. AAB does not have to consider any of these but he should. This is why they will continue to recover abandoned uniforms from airports around the world as people jump ship. It’s not about inefficiency but rather treating people as people.
HIs business makes money because he exploits his workers and unnecessarily shackles them with ridiculous rules “please sir may I marry my beloved?”.
Can’t imagine who on Earth I’m para-phrasing, but:
…that is your problem, you listen to what people want, instead of just doing it!! This would not happen to me, in my country!…?
..A great article about Al Baker and Qatar Airways:
expressen.se/nyheter/the-truth-about-the-luxury-of-qatar-airways/