Qatar Airways CEO Akbar Al Baker laments what he calls the protectionist nature of the Indian aviation industry, saying the true victims are the Indian middle class.
Qatar Airways CEO On Indian Aviation
Speaking on CNN, the veteran chief executive of Qatar Airways called the aviation industry in India a “closed regime” that is “hugely protectionist” and selling itself short:
India has a very closed air services regime. And it’s hugely protectionist.
The more they open, the more affluent the aviation industry in India will become.
He cites a fascinating statistic that underscores the potential juggernaut of an industry in which competition can flourish:
India’s middle class is 100 million more than the total population of the United States. There is huge purchasing power the people have. But the air connectivity is bad and they don’t want to open it.
As the Indian economy rapidly develops, the potential for explosive growth in air service suggests the pie is big enough for both foreign and Indian carriers.
Al Baker scoffed at a warning from Air India CEO Campbell Wilson that “India must not open the floodgates” and his assertion of a “national interest” justification in creating a reconstituted Air India that offers nonstop routes for Indian travelers to Europe and North America:
Someone should ask him on what basis he calculates national interest. It is in the national interest of India to allow more people to go, allow more people to travel, and grow the aviation industry to create jobs.
He then explained that high load factors suggest there is tremendous room for growth:
I don’t think he has done his homework properly. if he looks at all the load factors of the airlines that have completely saturated the routes into India, it’s all above 85%.
Baker says an 85% load factor means there is demand that cannot be fulfilled and that therefore room for growth. That may be, but further development of that point would have been appreciated: any airline can fill up a price if it gives away the seats for cheap enough. Are those 85% load factors on flights with sustainable fares?
CONCLUSION
It’s not surprising that Al Baker, who wishes to expand service to India on Qatar Airways, laments how restricted the Bhārat aviation industry is. But his point about the size of the exploding middle class in India underscores what potential there is for so many airlines in the future.
He says, “In today’s open world you cannot have the cake and eat it yourself,” but at least in the short-term, Air India will continue to be given a special privilege to grow without the full force of competition from Gulf carriers.
image: Qatar Airways
To be fair, most people avoided flying Indian carriers to and from India if they could and Air India is just starting to get back on track after the Tata takeover. Also, they probably looked at Thailand/TH‘s situation as opening up airspace in that country was one of the causes of TG‘s bankruptcy amongst many other issues.
From a consumer’s perspective, though, more competition should always be welcomed as it allows for the consumer to make a choice and have cheaper airfares available.
They want 28 more flights to Australia, they helped drive Air New Zealand out of London, they are based in a country that most people can’t find on a map and have no intention of visiting.
Qatar has the population of Jaimaca. Jamaica can’t support a daily flight to London, so how can Doha justify 5 daily flights to London. We should play a game, it’s like “Where’s Waldo?” I calk it “Count the Qatari Citizens on a Qatar Airways Flight!”
“He says , ‘In today’s open world you cannot have the cake and eat it yourself’ “. Of course you can .
Al Baker (who is originally from Mumbai) is right about load factors but wrong on 2 counts:
1. High load factors at a low price will just lead to a bloodbath for carriers. I have flown 60 round trips from the US to India over the past 10 years. Prices to Europe from the US are roughly on par with prices from the US to India. Domestic Indian flights are reasonably priced already (labor costs are cheaper but rest of the costs should be similar to US costs).
2. Most large countries protect their domestic aviation sector, the US being a prime example. Competition may be good for passengers but is not good for carriers.
Too funny ! The prices are no where near the same price for USA to Europe to USA to India!
Back before Qatar Airways became the behemoth it currently is (and AAB was just a few years into his job), I was part of a team negotiating a BASA with Qatar on behalf of a third country. They had just spun off their interests in Gulf Air and were beginning to invest into their own airline.
Suffice to say that Qatar was one of the most protectionist BASA regimes I have ever encountered. Not only did they insist on single designation and frequency limits, but also required positive tariff approvals – something I have only ever encountered with Angola before or since.
AAB never met an argument he couldn’t twist to his point of view. Take his words with a huge pinch of salt because he has only one priority, that is himself and his company. He’d screw the Indian middle class over in a heartbeat.
Akbar El Bakir pegging the Indian middle class at 430+ million people is just delusional. Only about 22 million Indians filed income over $6,000 last year.
Ensuring Qatar only has as many seats to India, as Indian airlines have to Qatar is a smart move by India that is certainly in the national interest. It levels the playing field for private airlines in India and other international carriers that are competing against the sovereign backed (ie, petro-funded) Qatar/Emirates behemoths. It enables India to grow their own airline industry, helps prevent dominant carriers (like Qatar) from abusing their market strength, and helps the currency trade balance by reducing funds by foreign airlines being repatriated abroad.
I have first hand information that very few people in India file income taxes -a large proportion of the population evade taxes.
You’re focusing on the wrong point. However much taxes are under reported, I highly doubt India has 430 million potential international flyer as Al Baker suggests. He’s packaging Qatar Airways propaganda as ‘objective feedback’ in the interest of India and Indians, which is quite mischievous of him.
I mean, he can’t just say it’s all about profits for Qatar Airways, so let’s say it’s for the Indian middle class instead?
I disagree with AAB’s assessment. Indian aviation is still developing. Many domestic carriers are struggling. Fluctuating oil prices make the Indian aviation industry on a shaky footing. Now scrapped policies like 5/20 rule for international flying (whereby Indian carriers have to complete five year of domestic service and have 20 aircraft in fleet) has been a huge impediment for Indian carriers. India is rapidly developing its domestic air network and new airports under the UDAN scheme. In terms of geographic size, population and number of gateway airports, Indian aviation market can only be compared to that of USA and China. Not even developed markets like UK, Germany and France have multiple gateway airports. So, allowing foreign carriers to have unlimited access to Indian aviation market doesn’t make sense for countries like Qatar, UAE etc as they have just one airport! Indian government should be prudent to open up additional seats on a reciprocal arrangement.
Fraud airlines buying accolades and awards,should not be allowed to expand in India. Qatar Airlines has a track record of profiteering by collecting huge rescheduling charges from passengers refused to fly on original booked flights on ground of improper visas. The passengers are permitted to fly with same visa after exhorting huge amounts on later flights. Most useless grievance and customer complaint website and highest response time in Airlines Industry. Its a racket to collect Rescheduling charges by either denying boarding on valid visas or sending back passengers from Doha after finding fault in Visa at transit destinations. Staff have poor knowledge of visas and harass passengers.
Absolutely Qatar Airways gets $100 billion funding from Qatar Govt. For their losses. They cut prices bankrupt Indian airlines. Short term Indian Flyers get benefit but Bharat as a nation will loose their domestic airlines in bankruptcy.
Well if anyone understands protectionism, it’s Al Baker. Qatar Airways turned it into art to the point where slot restrictions at Doha led to Dubai-Doha hop in economy costing hundreds of dollars, at times exceeding 1k USD
Funny that Qatar and other state airlines in the middle east gets significantly discounted fuel from their respective governments to undercut American airlines. Pot calling kettle black.
Indian only take, they do not give. That their culture, what do you expect?
N they don’t regard customers too especially in mumbai Airport. Very bad attitude towards customers.Am a victim