Al Baker: Qatar Airways unlikely to cut fares amid lower profits

As pressure mounts on Qatar Airways to open up its books and counter claims that it receives unfair government assistance, the carrier’s chief executive has cautioned that the airline’s financial performance last year fell below expectations.

The national carrier’s thin margins mean passengers shouldn’t expect to see a reduction in base fares even though oil prices are falling, CEO Akbar Al Baker said at a press conference this week, according to Arabian Business.

The statement takes a step back from a pledge Al Baker made in January to scrap the airline’s fuel surcharge. Currently, Qatar Airways website shows that the additional fee is still being levied on tickets.

Qatar Airways is owned by the state and does not disclose its financial results like publicly traded companies.

A year ago, officials said they planned to publish the airline’s 2013 profit figures, but that pledge does not appear to have been fulfilled.

This week, Al Baker said he would release the airline’s financial results for its last fiscal year, which ended on March 31. Speaking at the Arabian Travel Market trade show in Dubai yesterday, he said:

“I am not going to mince my words. I am going to meet the press. I am going to meet with government officials next week, but after that I am going to open the books and confront them (US carriers).”

He added that delays in receiving Qatar Airways’ new Airbus A380 and Boeing 787 hurt the carrier’s bottom line last year.

“Put together, the sales performance that we expected didn’t happen … our profit will be less than what I was estimating,” he said, according to The National.

Subsidy accusations

Al Baker’s remarks come as the airline, along with Gulf carriers Etihad and Emirates, fend off accusations from a coalition of US carriers that they’ve received billions of dollars in state support over the past decade.

The assistance has apparently allowed them to lower ticket prices and lure customers away from legacy carriers in the US and Europe.

These critics say Qatar Airways is “not commercially viable” without the subsidies, which have allegedly included interest-free loans that were ultimately forgiven, free land and airport fee exemptions.

The US airlines are asking American lawmakers to retaliate by restricting the Gulf carriers’ access to their market, and the Obama administration has said it would investigate the claims.

Qatar Airways has denied the accusations, but Al Baker reportedly said this week that it would take years to provide a full response to the claims.

Earlier this week, Qatar Airways announced plans to expand further into the US by introducing flights to Boston, Los Angeles and Atlanta.

However, some of these routes aren’t scheduled to begin operating for more than a year, prompting critics to speculate that the airline is accelerating its expansion plans ahead of possible US restrictions that could limit its growth.

Delta CEO a ‘bully’

Meanwhile, Al Baker continues his verbal assault on one of his biggest American critics.

Less than two months after publicly accusing Delta Air Lines of flying “crap” airplanes, Al Baker reportedly ripped into his Delta counterpart during the Arabian Travel Market conference.

“He’s just a bully. And he’s a liar … He has no dignity, he has no ethics. He has in my opinion a weak personality, and he is only hiding behind all this nonsense, misleading his government in a big way,” Al Baker said, according to Al Arabiya.

There were also some announcements of substance involving Qatar Airways at this week’s trade show, including:

• A new daily flight to Ras Al Khaimah in the UAE, commencing Oct. 1 using an Airbus A320;
• An agreement with Royal Air Maroc that will see the two carriers jointly operating 10 weekly flights between Doha and Casablanca and allow passengers to use a combination of flights from both airlines; and
• A new service that expedites travel for passengers flying from Doha to Dubai. Travelers will be able to check in at dedicated counters, clear immigration in a special “fast-track” lane and board their plane through a gate in concourse A or B that’s no more than a 10-minute walk from security, the carrier said in a statement.

Separately, there were also reports that France may give Qatar Airways permission to add flights to that country. Last week, Qatar agreed to buy 24 Rafale fighter jets from French manufacturer Dassault, but French President François Hollande reportedly downplayed any connection between the two issues.

“There have been discussions in other areas with Qatar, and with other countries, regarding the allocation of air routes, but this contract concerned only the Rafale aircraft and the material that will equip it,” Hollande said in Doha this week according to Aviation Week, citing Le Monde.

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