Qatar Airways announced in June that profits skyrocketed to $1.5 billion ahead of the World Cup, indicating it is the most the state-owned company has ever earned.
For Qatar Airways’ CEO, politics takes precedence over inflation, fuel prices, and labour shortages when it comes to the challenges targeting the aviation industry.
“The biggest challenge to the industry, of course, is political upheaval,” Akbar Al Baker told audiences at the International Air Transport Association (IATA) World Financial Symposium in Doha on Tuesday.
Al Baker said that the Covid-19 outbreak was “the biggest challenge to aviation in our living memory,” during the panel discussion, before listing a number of other issues plaguing the aviation industry.
Among other obstacles, Al Baker listed staff shortages and oil prices as contributing factors leading to unpredictability. He pointed to climate change as another concern, saying that there is “no investment because of the climate issues that are happening in the world in infrastructure.”
Questioned about his criticism of the move imposing restrictions on airlines in the name of climate change, Al Baker said,
“And then governments unnecessarily putting restrictions on aviation to sustain political gains in many of the countries around the world, to show that they are looking after the environment and that aviation is the biggest emitter of CO2, misleading the public who depend so much on aviation for trade, for tourism, for sustaining jobs.”
Such sentiment comes against the backdrop of an event that maintains: “Our commitment to sustainability is immutable.”
“Our goal – Fly Net Zero – to achieve net zero carbon by 2050, will require an industry wide and collaborative effort. As part of this effort, CFOs will have a key role to play,” the event’s official website declares.
Political upheaval
The state-owned airline’s CEO has previously warned about the airline industry possibly facing yet another recession as a result of the soaring oil prices triggered by the ongoing conflict in Ukraine.
“Once the cost of energy rises, then the cost to carry goods and passengers rises – all this also could start a second recession in our industry,” said Al Baker in an interview in May with aviation analyst John Strickland, according to the Gulf News.
Since the world saw the onset of the Russian invasion of Ukraine nearly three months ago, the aviation industry has been affected in many ways. Airlines have redirected flights from dangerous air zones, leased aircrafts have been left stranded in Russia, and the world’s largest plane, the Antonov An-225, has been destroyed.
“I hope I’m wrong, but we need to be prepared. We need to be on our guard too because anything could happen over the next 12-24 months. We also don’t know if this conflict will go beyond the borders of Ukraine,” Al Baker continued.
The nature of the conflict implies that long-term effects are also possible.
The Russian and Ukrainian conflict has had a direct impact on the world economy, with commodity prices experiencing a significant increase.
Oil prices will remain above $100/barrel so long as the conflict escalates further, according to an Economist Intelligence Unit global outlook report.
The existing energy inflation further exacerbated by the conflict has caused oil prices to near a 100% gain, the highest level since 2008. As a result, reports suggest that this has the potential to prompt ticket prices to subsequently soar by as much as 15% this summer.
Aeronautical experts have gained knowledge retrospectively from the oil crisis in 1973. Airlines were forced to make a range of strategic decisions with the “intention of saving fuel.” Carriers faced widespread cancellations, with the Dutch airline, Lufthansa losing six percent of its total passengers.
Al Baker on sustainability during World Cup
The Gulf carrier’s CEO has previously defended the decision to operate more than 160 additional daily shuttle flights for spectators between Doha and neighbouring major cities, during what has been billed as the first carbon-neutral FIFA World Cup.
In May, Qatar Airways announced a partnership with regional airlines to allow World Cup 2022 ticket holders to allow a day trip to and from other GCC countries.
Climate activists argued that the flight plan poses an issue to the tournament’s sustainability mission.
“Please don’t believe people saying only negative things,”Al Baker said in an interview with CNN in late May, adding that he was certain the flights would be at maximum capacity.
“We have aeroplanes which have very low emissions compared to the normal aircraft most of the other airlines fly,” including long-haul flights, he stressed.
“His Highness the Amir always wanted to share the benefit of this tournament with all of our neighbours,” Al Baker said, referring to the shuttle flights between neighbouring states after the announced partnership.
Ahead of the partnership announcement, organisers estimated that the carbon footprint for the major sporting event will equate to over 3.6 million metric tonnes of greenhouse gas, more than half of which will come from travelling fans.
These flights will add to the current estimate of the CO2 emissions during the tournament.
The World Cup in Qatar will offer the first ever climate-neutral experience in history, meaning during the event, carbon footprint will be offset through some of the green initiatives the government has invested in. Organisers have established a “Global Carbon Council” tasked with “identifying quality projects.”
A Carbon Market Watch’s (CMW) report released on Tuesday sheds light on some of the doubts cast on this year’s World Cup. It claimed that carbon emissions from new stadiums could be up to eight times greater than the figures in Qatar’s initial report, criticising “the choice of accounting approach.”
In a statement, the Supreme Committee for Delivery and Legacy dismissed CMW’s claims as “speculative and inaccurate,” affirming that the country is on a track to smoothly carry out carbon-neutral plans.
The Gulf country’s commitment to a carbon-neutral World Cup 2022 should be “recognised, rather than criticised,” a spokesperson said.