Akbar Al Baker: No holds barred

Is the new airport in trouble? Will Qatar Airways hook up with Emirates? Should the Dreamliner have been grounded? Are trade unions hindering progress? Is an Indian stake all rumour and lies? The man with all the answers is Qatar Airways CEO Akbar Al Baker
By Shane McGinley
Fri 10 May 2013 12:17 PM

Qatar airways boss akbar al baker has a lot on his plate at the moment: the three-month grounding of the much heralded Dreamliner 787 has cost him $200m this year; he has been forced to push back a third of the new routes he wanted to launch in 2013; and the carrier’s new multi-billion-dollar airport in Doha continues to be delayed.

Add to this speculation about possible football sponsorship deals, his displeasure with the engine performance in some of the aircraft, or his irritation at Indian brokers trying to use the carrier to inflate their share prices and a traditional Al Baker-style rant is pretty much a guarantee when we meet him in Dubai as he heralds the return of the  Dreamliner 787 back into service.

While he is taking all these irritations in his stride, there is one topic which pricks the CEO’s temper and brings him out all guns ablaze: the subject of Qatar Airways and trade unions.

Last month, the International Transport Workers’ Federation (ITF), which represents around 4.5 million transport workers in 150 countries, hit out at Qatar’s offer to move the UN’s International Civil Aviation Organisation (ICAO) from Montreal to Doha.

The headquarters of the ICAO has been resident in the Canadian city since 1946 and authorities in Doha have offered to build the organisation a new headquarters when its 20-year lease comes up for renewal in 2016.

“The UN cannot bend to the power of the Riyal at a time when ordinary Qataris’ fights for rights are met with massive repression. It’s doubly outrageous when thousands of staff at Qatar Airways are denied the fundamental right to union membership enshrined by the UN,” ITF president Paddy Crumlin said in a statement.

When these comments are brought to Al Baker’s attention he is clearly in no mood to mince his words. “This is all excuses. There are many countries in the world where unions are not allowed and they have UN bodies in those countries. Workers have absolute rights in our country,” he says, testily.

The International Trade Union Confederation (ITUC) has also been a regular critic of Qatar’s labour policies and also recently weighed in on the issue: “No foreign employee, whether a cleaner or a football star, is allowed to quit Qatar unless their employer allows them to,” ITUC general secretary Sharan Burrow said on the proposal to move the ICAO from Montreal to Doha.

Again, Al Baker rejects these statements outright and sees them as an attempt to stifle the country’s progress: “This is all rubbish… This is just for people who try to block the progress of Arab countries. They try to block Arab countries getting involved in international institutions. I think with us, no right to strike does not mean that workers do not have rights.”

Al Baker reveals that he is a fan of recently deceased former British prime minister Margaret Thatcher — who infamously had her own bitter battles with British trade unions — and adds that an unnamed British Labour leader also agrees with his stance. “I was talking to a politician, a very prominent politician from the Labour party and he mentioned to me that he wished that the unions were not allowed… What more do you want?

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“If you go and ask the politicians in most of the countries in the Western world they would love to have the system we have: where the workers have rights through the law but they do not have rights through striking and undermining successful institutions that provide jobs.

“If you did not have unions you wouldn’t have this jobless problem in the Western world… It is caused by unions making companies and institutions uncompetitive and bringing them to a position of not being efficient.”

Qatar Airways may not have unions to restrict it, but its fast-paced growth was curtailed this year when international aviation regulators grounded the entire Dreamliner 787 global fleet earlier this year, a move Al Baker thinks was unnecessary.

“The aircraft shouldn’t have been grounded. I think there was a reaction by the regulators because of the unnecessary emergency evacuation of the Japanese aircraft and unfortunately people today are more sensitive to what the social media say than to what should really be the facts of something like that.”

US regulators approved a new battery design for the aircraft late last month, clearing the way for a resumption of Dreamliner flights by airlines around the world.

Al Baker claims the grounding of the fleet and the delay in deliveries of the aircraft has had a severe impact on the airline’s balance sheet and curtailed its 2013 expansion plans. Al Baker refuses to go into how much compensation he is expecting to get from Boeing but he does admit that the grounding has cost the Doha carrier around $200m already this year.

“I will get compensation as we took airplanes that we couldn’t fly and Boeing understands that and they [have] agreed to compensate not only Qatar Airways but everyone that have taken deliveries of the 787.”

Qatar Airways, which was the first carrier in the Middle East to receive the 787, has 30 of the aircraft on order and an additional 30 on option, with the delivery programme now firmly well behind schedule.

“There is a delay on us getting the additional five aircraft. This delay has happened due to the delay in the certification. We were due to receive on aircraft in March, one aircraft in April, one aircraft in June, one aircraft in July and one aircraft in September. Now this delay has happened we will start receiving our aircraft from June.”

Despite the 787 issues, Al Baker is not cancelling any of the orders in place and is actually increasing his options. “We will not cancel the Dreamliner, quite the contrary we may order additional Dreamliners because we have purchase rights for another 30 and it is a possibility we will go for another 30 787-9s.”

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In a bid to fill the shortfall, Al Baker is looking at alternatives and admits he is talking to Airbus for up to fifteen aircraft: "We are talking to Airbus about A330s to fill in the gap that the Dreamliner delays have caused Qatar Airways ... anywhere between ten and fifteen [aircraft]."

The domino effect of the delays and grounding means the Doha-based carrier, which currently flies to 126 destinations, will not be able to launch as many new routes this year as it had planned.

“This is our big issue with Boeing: we have told them the grounding of the 787 really impacted our expansion severely. We have to claw back the new destinations we have launched and because we are not expanding it is impacting my bottom line. We were planning fifteen new routes but now I will have to settle for ten and I am very unhappy.”

With the relaunch of the 787 onto the Dubai route, the aircraft will go into service on the Heathrow route on 20 May, to Munich on 22 May, to Frankfurt on the 26th and on the transatlantic routes from next year.

One thing Al Baker is certain if is that the aircraft is safe to fly on. “People don’t need convincing [about the safety of the 787]; people have confidence in Boeing; we have confidence in Boeing. We wouldn’t be flying the airplane if it wasn’t safe. We would never put our passengers in an unsafe aircraft.

The issues with the 787 certainly doesn’t seem to have soured Al Baker’s relationship with Boeing as he admits he is interested in purchasing the US manufacturer’s upgraded version of the popular 777 widebody aircraft when it is eventually launched.

“They have given us a presentation and when they launch their aircraft we will be very interested,” he says.

A Bloomberg news report claims the 777X is currently awaiting approval to start production. Despite this, Al Baker says there are still some issues as he is not happy with the engine performance currently on offer from General Electric (GE).

Qatar Airways has taken delivery of 33 777 aircraft and currently has nine left to receive. The General Electric GE90 engine is a family of high-bypass turbofan aircraft engines built by GE Aviation exclusively for the Boeing 777. “We have issues with the GE90. We are not happy with them... GE knows about it,” he says.

However, and despite Al Baker’s reservations, Boeing announced in March that GE has been chosen as its engine partner for the ongoing development of the 777X.

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Another group on Al Baker’s hit list are Indian traders, who be believes are spreading rumours that Qatar Airways is looking to invest in various indebted Indian airlines in order to boost their share prices.

As long ago as January Al Baker had denied that he was in talks to buy a stake in SpiceJet, but the recent acquisition by Abu Dhabi’s Etihad Airways of a stake in rival Jet Airways has given renewed weight to the rumours and been a source of irritation for the CEO.

“You know there are always rumours. Around six months ago I did a statement to the press not to believe such rumours as the shareholders deliberately put out such rumours to boost share prices.

“There is an airline that made an announcement about Qatar Airways’ interest in them and this boosted their share price by seven percent. There was another airline that mentioned this and it had an impact of nearly eleven percent on their share price. These are being used by certain rogue dealers to maximise their profit.”

While a stake sale is off the cards, he admits he is in talks with Indian carrier IndiGo Airlines for a codesharing agreement. “We are in touch with each other and we hope that we will be doing business. There are already approaches between the management of the two airlines.”

Al Baker has no interest in following Etihad and buying a stake in an Indian carrier, and he is also not interested in following their Manchester City Football Club model and launching a major bid for naming rights to an English Premiership football stadium.

Etihad Airways’ $642m ten-year sponsorship agreement with Manchester City Football Club saw the club’s home ground renamed Etihad Stadium and Arsenal Football Club renamed its home ground Emirates Stadium as part of a deal with the Dubai carrier.

While the Qatari carrier is set to put its logo on the shirts of FC Barcelona from July as part of a three year $46m sponsorship deal, the chances of a Qatar Airways Stadium seems slim. “I wish good luck to Etihad, they have plenty of money I don’t have. I would rather buy airplanes with the money than going and investing in clubs.”

One dream that Al Baker is still holding on to is his long-held ambition to sign an alliance with Emirates, which he believes would be a major boost for the region’s aviation sector. “We are always open [to an alliance with Emirates Airline],” Al Baker says. “I think the closeness between Emirates and Qatar Airways will really make a very strong airline.”

Despite the Doha-based airline announcing it is set to be fully integrated into the oneworld alliance from September, Al Baker points to Emirates’ recent partnership with Australian carrier Qantas as proof the Dubai airline is open to integrating with rival airlines.

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“You never know: did you ever expect only one year ago that Emirates and Qantas would get together? Things in aviation can move fast. The integration of Emirates and Qatar Airways will benefit this region and will make the two airlines even stronger than they are today.”

Last year, Emirates’ president Tim Clark directly addressed Al Baker’s dream for a merger of the two airlines and said it was unlikely to happen as it would have “seismic repercussions in the aeropolitical framework.”

“You put the two together and you would face the most formidable international airline group that has ever been formed. That’s why it will never happen,” he was quoted as saying by Aviation Week.

Al Baker says he is interested in an alliance with Emirates because the Dubai carrier “is a very strongly established airline and has the network that would absolutely complement the network of Qatar Airways.”

In the midst of all this, Al Baker is also battling the ongoing delay of the new Doha airport, which was meant to open on 1 April. “We are finalising all the shortcomings that were raised by the civil defence but we are not in a position to give any dates,” he says, while continuing to blame US contractor Bechtel for the delay.

“Bechtel is hugely responsible for the delay and I am sticking to my statement that Bechtel has a very big part, together with the contractor, in delaying our airport and there is no question about it.”

However, he would not be drawn on whether this would end up going to the courts, referring that decision to the country’s civil aviation authority.

Despite all these troubles, the outspoken CEO seems to genuinely enjoy being before the media and no doubt also looks forward to the next round of negotiations with airport contractors and aircraft manufacturers.

With that in mind it is safe to say that Al Baker will continue to enjoy his place at the helm of Qatar’s aviation sector and will continue to provide much, and welcome, colour and debate in the years to come.

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