Qatar Airways is undergoing a significant transformation under the leadership of its new group CEO, Badr Mohammed Al Meer, as it embarks on a strategic overhaul.
Al Meer, who assumed the role after serving as the chief operating officer of Qatar’s Hamad International Airport, succeeded long-time CEO Akbar Al Baker in November.
“This marks a new era for Qatar Airways,” Al Meer told CNBC, as he unveiled the airline’s plans following an extensive “war room” review. He aims to revitalize the airline’s strategy and recalibrate its relationships with suppliers.
As part of this strategic shift, Qatar Airways is exploring the development of a premium First Class concept for its aircraft cabins.
Al Meer revealed to CNBC that the airline is in the process of creating a high-yielding first-class experience, aiming to merge the allure of commercial air travel with the exclusivity of private jet journeys.
“We sought to blend the familiarity of commercial flights with the luxury of private aviation to introduce something innovative,” Al Meer explained. “We are nearing completion, with only minor details such as colors and finishing touches remaining. Hopefully, we will make an official announcement very soon.”
Traditionally, First Class seating offers passengers a more spacious and opulent experience, albeit at a higher cost. However, in recent years, some airlines have opted to phase out, scale down, or rebrand their first-class offerings to optimize cabin space and cater to the preferences of budget-conscious travelers.
In addition to its First Class endeavor, Qatar Airways is also revamping its premium Q-Suite class of seats. The latest iteration of this product is slated to debut at the Farnborough International Airshow in July, marking another milestone in the airline’s commitment to enhancing the passenger experience.
New Orders
The Gulf carrier has taken a proactive step by submitting a Request for Proposal (RFP) to Boeing and Airbus for a significant new aircraft order, according to Al Meer.
“We released an RFP to create some competition between both suppliers,” he noted, maintaining confidentiality regarding specific details. “With an order of this magnitude, it’s essential for us to proceed thoughtfully and deliberately through the process.”
Al Meer aims to leverage the momentum generated by the Qatar World Cup to enhance the airline’s service offerings. The event contributed to Qatar Airways achieving a record net profit of $1.21 billion in the fiscal year 2022-23, along with the highest yields and load factors in its history.
“We have identified key markets for growth, including China, India, Australia, Japan, Korea, and several others,” Al Meer stated.
Highlighting the robust regional demand for air travel, Al Meer noted a significant increase in passenger numbers over the past four months, with further growth projected to stabilize at approximately 10%-15% for the remainder of the year.
The proposal for a new aircraft order follows a recent legal dispute between Qatar Airways and Airbus regarding safety concerns related to paint degradation. Additionally, it coincides with ongoing challenges faced by Boeing, including safety issues, quality control challenges, and production and delivery delays, particularly following the Max 9 door incident in January.
“We are impacted when our aircraft are not delivered on schedule,” Al Meer acknowledged. “However, we maintain full confidence in both Airbus and Boeing, believing in their ability to overcome these challenges.”
Al Meer expressed confidence in receiving Qatar’s latest Boeing 777X order by the end of the following year, emphasizing his unwavering belief in the safety of Boeing aircraft.
Furthermore, Qatar Airways intends to diverge from the previous plan proposed by Al Baker to swiftly phase out the flagship Airbus A380. This decision aligns with Emirates’ stance to retain the aircraft despite Airbus ceasing production in 2021.
What are the next steps?
Al Meer has implemented measures to address criticisms of Qatar Airways’ workplace policies, including relaxing a contentious night curfew rule for cabin crew and overturning a longstanding prohibition on staff sharing workplace photos on social media.
“It became evident that changes were necessary,” Al Meer acknowledged. “We aim for our staff and our airline to be the preferred choice for employment.”
This strategic update coincides with Qatar Airways facing renewed competition from rival Gulf carriers such as Emirates and Etihad, as well as emerging competitors like Saudi Arabia’s Riyadh Air, which is making significant aircraft purchases to compete on crucial routes in the coming years.
“Competition will drive us to elevate our standards,” Al Meer affirmed. “I view Riyadh Air as the primary competition… they will need to compete with the best.”
Al Baker played a pivotal role in steering Qatar Airways into a profitable global airline, navigating through significant events such as the September 11 attacks, the global financial crisis, the Gulf diplomatic rift, and the COVID-19 pandemic.
Now, his successor aims to usher the airline into a new era, often referred to as “Qatar Airways 2.0,” leaving open the possibility of an initial public offering (IPO).
“We may consider it in the near future,” Al Meer stated when questioned about a potential IPO. However, he emphasized that the final decision would rest with Qatar Airways stakeholders and the Qatari Government.
