Qatar Airways may fight back legally as CEO likens crisis to Soviet blockade of West Berlin
19 Jun 2017 - 22:42
By Deena Kamel Yousef, Christopher Jasper & Guy Johnson / Bloomberg
Qatar Airways is considering legal action to claw back the additional operating costs it’s running up after neighboring states in the Gulf excluded it from their airspace, a crisis the carrier’s chief likened to the Soviet blockade of West Berlin.
The airline is keeping tabs on the business impact of its higher fuel bill after the barriers imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt shut down 52 routes and forced remaining services into diversions ranging from five minutes to two hours, Qatar Air Chief Executive Officer Akbar al Baker said. The restrictions have doubled the flying time on some routes, he said.
Qatar Air is “making sure that all our business streams are properly documented in order for us in future to go to international tribunals to reflect the pain,” Al Baker said Monday at the Paris Air Show. The CEO added that he’s unsatisfied with the International Civil Aviation Organization’s response to what he says is in an illegal action unparalleled since the Soviet operation against Berlin during the height of the Cold War, which prompted the U.S. to lead an airlift of supplies to the German city.
“They have been slow,” Al Baker said of the ICAO response. “But those countries have people on the board. We are now waiting two weeks with this situation and nobody has upheld international law.” The United Nations agency has been brokering diplomatic discussions that it says are aimed at securing a consensus-based solution to the fallout.
The four rival Arab states cut diplomatic and transport links with Qatar on June 5, accusing the nation of funding Islamist terrorism, which it denies. The measures have left Qatar Air excluded from 18 regional destinations and forced some long-haul flights to detour via Iran and Oman.
Qatar Air will “march on” with plans to add new destinations and is “successfully mitigating” some of the impact of the network disruptions, Al Baker said. The airline is seeing an increase in bookings and expects the busy Islamic holiday of Eid to be “business as usual.”
The carrier has no plans to defer any plane deliveries so long as it can cover direct operating costs and will maintain even the most disrupted routes such as Doha-Sao Paulo, the CEO said, describing the dispute as an “intimidation game.” Excess narrow-body jets from the canceled regional flights are being redeployed to other destinations, including Iran.
The executive added that the spat won’t affect relations with Boeing and that he’s confident President Donald Trump will take the right steps in mediating.
Al Baker said the Trump administration’s ban on carrying laptops into aircraft cabins on U.S.-bound flights from airports including Doha could be eased by an audit of airport security capabilities. He said he has invited Department of Homeland Security officials to visit the Qatar Air hub.
The CEO said he has now firmed up 20 orders for Boeing Co.’s 737 Max 8 plane and that the aircraft will go to the airline’s operations starting in the second half of next year. Jets from 40 remaining options could be bought for Italy’s Meridiana SpA, in which Qatar Air is still keen to buy a stake once it completes final work on the deal.
The carrier is set to begin taking A321neos starting in next year’s the third quarter. Qatar Air will equip the planes with Leap engines from CFM International, a joint venture of General Electric Co. and Safran SA, after a falling out with Pratt & Whitney over delivery delays.
A possible investment in Royal Air Maroc is on hold pending a restructuring at the Moroccan carrier, though an ambitious plan to establish a carrier in India remains on track, with Qatar having been granted the right to establish a unit there when it is ready to, Al Baker said.
Bombardier Inc.’s C Series plane, previously rejected for Qatar, could be an option for the Indian division. The CEO said he’s not interested in Boeing’s planned middle-of-market plane and would rather the company modified the 787-8 Dreamliner.