Over the last few years, the biggest three airlines in the United States – American Airlines, Delta and United – have led a fairly concerted campaign against what they see as the unfair and rapid international expansion of Gulf rivals such as Emirates, Etihad and Qatar Airways. They accuse these UAE and Qatar-based airlines of receiving over $52 billion USD in illegal government subsidies since 2004 and have lobbied hard to limit their reach in the United States.
Interestingly, Qatar Airways is a fellow member of the same airline alliance as American Airlines. Qatar joined Oneworld in 2013 after being invited by British Airways (whose parent company is part-owned by Qatar Airways) and to this day remains the only major Persian Gulf carrier to be a member of a global airline alliance.
Qatar Airways clearly thought there was a benefit in joining an alliance – such as interline and codeshare agreements, reciprocal benefits for passengers and a network of like-minded airlines. But in the last week, the airline’s chief executive Akbar Al Baker has suggested his airline could pull out of the alliance – because of the behaviour of fellow member airlines.
Specifically, Baker isn’t pleased with the behaviour of American Airlines and its antics in lobbying against Qatar Airways. Nor is Baker particularly happy with American rejecting an investment bid by Qatar Airways in which American’s chief exec, Doug Parker called the attempt “misguided and ill-conceived.”
“I found it confusing. I was a little bewildered. Why an airline we are aggressively fighting would want to take a stake makes no sense,” Parker explained at the time.
Initially, analysts suspected Baker was making idle threats to pull Qatar out of Oneworld but at a press event held in New York City yesterday afternoon, Baker – who was flanked by four female cabin crew – again reiterated the fact he was growing tired of the Oneworld alliance.
Baker explained that his airline’s commitment to Oneworld had “diminished” as “we are being constantly attacked by Oneworld partner (believed to be American Airlines.” Baker told the assembled journalists that his warning should be considered an “ultimatum” and that Qatar Airways could leave the alliance “soon”.
“I don’t know. We will wait and see what happens,” Baker told the journalists.
And it’s not only American Airlines who have upset Baker. Fellow Oneworld member airline, Qantas has an extensive joint venture partnership with Qatar’s big Gulf rival, Emirates – in itself, that’s bad enough but Baker accuses Qantas of lobbying the Australian government to limit Qatar’s access into the country. Clearly, that benefits Qantas’relationship with Emirates.
In fact, we’re seeing the benefits of alliance membership becoming increasingly less important as more and more airlines announce joint ventures that ignore the alliance model of doing business. Why bother spending the money on alliance membership when you can strike deals with airline you see fit?
At the same time, Qatar has been pushing an aggressive investment strategy in other airlines – such as IAG (the owners of British Airways, Iberia, etc) and LATAM, as well as newly rebranded Air Italy, which could become a big challenger in the Italian market. Baker even says his airline could still attempt to invest in the American market where “opportunities” and “synergies” exist.
In the last year, Qatar announced an agreement with U.S. officials which secures its Open Skies agreement and allows the airline to continue its international expansion. The agreement was considered a major win against the campaign by U.S. rivals. Qatar Airways has been at pains to point out that its investment in Boeing aircraft is a major boon to the U.S. economy and has secured thousands of American jobs.
