tommy1808
Posts: 10872
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 9:48 am

AEROFAN wrote:
Antarius wrote:
AEROFAN wrote:

If you do not fly J or F on every flight, you are most certainly chasing the lowest price. It has nothing to do with loyalty. If you were loyal, you would always book J or F even when you are not flying on your company's dime, and you would have the lounge freely. Why do you think you should be able to get the lounge access, while flying on a cheap economy ticket and crowding the space for those who have paid thousands of dollars more, is beyond me... You want lounge access - buy J and F and you no longer have to worry about it.


I repeat, Penny wise, pound foolish. The rest of the world manages, while also making money. Something that QR isnt doing.


You, like quite a few, feel that you are entitled to something you did not pay for. You are not! Pay up or move on. If businesses like QR were to continue to allow spongers like you, they would have to declare bankruptcy. I want the amenities that come with a J or F ticket and so I pay for the tickets that provide those amenities. I can't afford the tickets, I don't fly. You should learn to do the same.


People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas
This Singature is a safe space......
 
Blerg
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 10:10 am

moa999 wrote:
Etihad has the richest state support behind it.
There is a reason the tallest building in Dubai isn't the Burj Emirates


They might have the richest sugar daddy but they seem to have the worst management. Just look at the drastic cuts they implemented both in terms of network and quality. I'm sure both EK and QR are grateful.
 
AF022
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 11:00 am

Didn't i read on another thread that QR is investing in TAAG?
Like others have said above, what is their investment strategy? It seems to be investing in airlines that can't be turned around.
 
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Erebus
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 11:10 am

AF022 wrote:
Didn't i read on another thread that QR is investing in TAAG?
Like others have said above, what is their investment strategy? It seems to be investing in airlines that can't be turned around.


That sounds like Etihad.
 
texl1649
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 11:48 am

Erebus wrote:
AF022 wrote:
Didn't i read on another thread that QR is investing in TAAG?
Like others have said above, what is their investment strategy? It seems to be investing in airlines that can't be turned around.


That sounds like Etihad.


Qatar and Etihad alike have a lot of ‘oil money’ royalty involved in their business/investment decisions with little long term experience/knowledge of civil aviation. The old axiom that “the quickest way to become a millionaire is to start as a billionaire and invest in an airline” is still quite true.
 
AEROFAN
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 12:30 pm

sabby wrote:
AEROFAN wrote:
sabby wrote:

Last I remember, QR do provide lounge access to Oneworld status members travelling in Y, but in separate lounges called Qatar Airways Business Class lounge and Qatar Airways First Class lounge. There's another one called Oryx lounge which is for Oneworld status holder flying BA/UL/RJ.
Al Safwa and Al Mourjan are reserved for QR F/J pax to have a distinguished service and I think that's perfectly fine to encourage fly premium with them.


I'm a bit confused. Can you clarify for me please:

Al Safwa and Al Mourjan lounges are reserved for F & J pax. Does this mean no Y pax allowed?
OW pax can access Qatar Airways Business Class and First Class lounges. Do the Al Safwa and Al Mourjan lounges fall into these categories as well?


Those are not categories, those are the names of the lounges. I know, it confused me too. Let me try to be more clear.

There are 5 lounges in Doha -
1. Qatar Airways Business Class and 2. Qatar Airways First Class lounges are open to passengers flying in OneWorld airlines in J or F along with OneWorld status members travelling in Y.
3. Oryx Lounge - Open for only British Airways, Srilankan Airlines and Royal Jordanian passengers
4. Al Safwa - For Passengers flying First Class in Qatar Airways
5. Al Mourjan - For Passengers flying in Business class in Qatar Airways

So, Qatar Airlines are treating the Oneworld passengers as expected and in additionally they have Al Mourjan and Al Safwa exclusively for QR pax to encourage them to fly with them with much superior experience. This strategy seems perfectly fine to me.


Thank you very much for the clarification, Sabby. I now understand.
QR's business model is perfectly fine to me as well.
 
AEROFAN
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 12:35 pm

tommy1808 wrote:
AEROFAN wrote:
Antarius wrote:

I repeat, Penny wise, pound foolish. The rest of the world manages, while also making money. Something that QR isnt doing.


You, like quite a few, feel that you are entitled to something you did not pay for. You are not! Pay up or move on. If businesses like QR were to continue to allow spongers like you, they would have to declare bankruptcy. I want the amenities that come with a J or F ticket and so I pay for the tickets that provide those amenities. I can't afford the tickets, I don't fly. You should learn to do the same.


People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas


They have not shelled out any, their companies have. They should not have access to this benefit when purchasing cheap economy tickets that others who are paying several thousand dollars more are getting. Access should be granted on fares purchase only.
 
Antarius
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 12:48 pm

AEROFAN wrote:
tommy1808 wrote:
AEROFAN wrote:

You, like quite a few, feel that you are entitled to something you did not pay for. You are not! Pay up or move on. If businesses like QR were to continue to allow spongers like you, they would have to declare bankruptcy. I want the amenities that come with a J or F ticket and so I pay for the tickets that provide those amenities. I can't afford the tickets, I don't fly. You should learn to do the same.


People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas


They have not shelled out any, their companies have. They should not have access to this benefit when purchasing cheap economy tickets that others who are paying several thousand dollars more are getting. Access should be granted on fares purchase only.


Again, you can keep repeating the same nuance free soundbite, but that isnt how OneWorld works, and QR and others are part of that. And no, not everyone has all their J travel paid for by their company.

While were at it, we should eliminate upgrades, limit lounge access to only those on full fare J (why should those discount J peons get access) too. QR can then operate 3 gulfstreams as that's about what they'd need for those unwilling to share space with the unwashed Y purchasers.

Loyalty programs and benefits are why many of us pay MORE to stay in alliance, no matter what class. If it was just a free for all, then I'd shop for the cheapest J ticket.
2019: SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX OAK SYD CVG PHL MAD ORY CDG SLC SJU BQN MHT YYZ STS BIS DOH BLR KTM MFM MEX MSY BWI DEN
 
moa999
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 1:09 pm

Antarius wrote:
but that isnt how OneWorld works, and QR and others are part of that.


I'm sure if oneworld had an issue they'd raise it.
QR provides a lounge for the elites and I'd say it's at least as good as the home lounges provided by MH, S7 and UL for example

Other airlines also delineate on Class only - eg. BAs LHR Concorde Room, AAs Flagship First Dining at JFK, MIA, DFW, LAX and soon LHR and the former IB MAD Dining room.

And there are plenty of other differences between airlines eg. AA elites not getting domestic lounge access, BAs bagless fares etc.
 
VTCIE
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 1:18 pm

texl1649 wrote:
Erebus wrote:
AF022 wrote:
Didn't i read on another thread that QR is investing in TAAG?
Like others have said above, what is their investment strategy? It seems to be investing in airlines that can't be turned around.

That sounds like Etihad.

Qatar and Etihad alike have a lot of ‘oil money’ royalty involved in their business/investment decisions with little long term experience/knowledge of civil aviation. The old axiom that “the quickest way to become a millionaire is to start as a billionaire and invest in an airline” is still quite true.

The difference is that Etihad paid dearly. It had to cut GRU (and hence all of South America), PER, EDI, SGN and other destinations. You only need to look at the despicable condition AB and 9W (especially 9W) ended up in. The poor, wretched, hapless airline, once the pride of India, simply cannot rest in peace, and EY refused to save its so-called friend from death, simply because of the mismanagement from both parties (the Goyals and Etihad).

QR is yet to pay, and it is very unlikely to pay. Sure, QR and IG—Air Italy—have been bleeding, but QR has not cut a single route that I know of. It is still soldering on. If it were EY, it would have chopped off Krabi, Sulaimaniyah, Windhoek, Tbilisi, Skopje, Marrakech, Hangzhou and goodness knows what else.
However, the fact remains that QR has not cut a single destination. (Unfortunately, the same cannot be said of IG, which has axed BOM, DEL and BKK barely after starting them, and never did start ORD.)

What’s more, EY has made significant cuts to the onboard product, to the point that passengers may avoid EY, while QR has not only not cut anything, but added more to its offering, especially with the Qsuite on the A350-1000.

But all this leads to my main point.
  • The Abu Dhabi government has given up on throwing billions after EY and 9W, and has let them sink or swim; 9W has completely sunk, talks with Synergy Group notwithstanding, while EY is still somehow afloat.
  • However, the Qatari government is still very committed to throwing trillions after QR and the 2022 World Cup, as it cannot let its brand image sink until the World Cup has ended. Until then, QR is unlikely to make too many cuts to the onboard product (lounge access is a different matter, and it is definitely not something I am going to consider).
Last edited by VTCIE on Fri Sep 20, 2019 1:40 pm, edited 3 times in total.
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tommy1808
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Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 1:36 pm

AEROFAN wrote:
tommy1808 wrote:
AEROFAN wrote:

You, like quite a few, feel that you are entitled to something you did not pay for. You are not! Pay up or move on. If businesses like QR were to continue to allow spongers like you, they would have to declare bankruptcy. I want the amenities that come with a J or F ticket and so I pay for the tickets that provide those amenities. I can't afford the tickets, I don't fly. You should learn to do the same.


People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas


They have not shelled out any, their companies have. They should not have access to this benefit when purchasing cheap economy tickets that others who are paying several thousand dollars more are getting. Access should be granted on fares purchase only.


You, conformation bias at work, ignored the bit about some Y tickets being more expensive that some C tickets. So the fare argument gets knocked flat.

The rest is conjecture. Plenty of people reach status out of their own pocket, even with just Y ticket. I did for example, over at skyteam.

If people avoid QR over that, and we know at least one guy does, that is revenue lost for QR. Longes are not that expensive to run, empty seats are.

Best regards
Thomas
This Singature is a safe space......
 
eurotrader85
Posts: 41
Joined: Wed Oct 24, 2018 8:45 pm

Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 1:41 pm

Antarius wrote:
AEROFAN wrote:
tommy1808 wrote:

People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas


They have not shelled out any, their companies have. They should not have access to this benefit when purchasing cheap economy tickets that others who are paying several thousand dollars more are getting. Access should be granted on fares purchase only.


Again, you can keep repeating the same nuance free soundbite, but that isnt how OneWorld works, and QR and others are part of that. And no, not everyone has all their J travel paid for by their company.

While were at it, we should eliminate upgrades, limit lounge access to only those on full fare J (why should those discount J peons get access) too. QR can then operate 3 gulfstreams as that's about what they'd need for those unwilling to share space with the unwashed Y purchasers.

Loyalty programs and benefits are why many of us pay MORE to stay in alliance, no matter what class. If it was just a free for all, then I'd shop for the cheapest J ticket.


Agreed, it is a good job AEROFAN is not running an airline or long term customer loyalty would flood to rivals. I fly F & J, yes spending corporate dollars, but it is I who chooses where those dollars are spent. Airlines realise this. Sometimes I might spend my own money on a leisure trip flying in W depending on the route-does that mean I shouldn't be able to access the lounge of an airline, or alliance, where I have directed hundreds of thousands of dollars of revenue and ticked all the boxes of the rules for access to the lounge? Am I really downgrading the experience for those who happened to fly J or F on that particular flight? Or am I more entitled to access given I probably have spent a lot more with said alliance in that particular qualifying year? Airlines have worked out its best to give a little to gain long-term loyalty.

QRs lounge policy is confusing, and not at all always in the spirit of OW cooperation. Not just in DOH but in at least LHR and CDG (possibly more), you can’t use similar level lounges unless flying with QR. It does go much further than say the Concord Room with BA. This sub-topic in the feed started with Chonetsao saying out of principle he doesn’t fly QR because of the way they didn’t enter into the spirit of mutual respect of lounge access in the alliance when he was a ‘small fish’ (with due respect) and he remembers that and now as a ‘bigger fish’ funnels his J dollars elsewhere out of principle. I can completely understand and respect that. At a time when QR needs all the dollars it can get, being a more respectable partner to OW FF, that costs it little in reality, might let it go a lot further than hiding behind exclusive pride.
 
jetblueguy22
Posts: 3242
Joined: Thu Nov 29, 2007 12:26 am

Re: Qatar Airways Reports $632 Million Loss

Fri Sep 20, 2019 2:31 pm

AEROFAN wrote:
tommy1808 wrote:
AEROFAN wrote:

You, like quite a few, feel that you are entitled to something you did not pay for. You are not! Pay up or move on. If businesses like QR were to continue to allow spongers like you, they would have to declare bankruptcy. I want the amenities that come with a J or F ticket and so I pay for the tickets that provide those amenities. I can't afford the tickets, I don't fly. You should learn to do the same.


People that have a status that allows lounge access usually already have shelled out a lot of money. I see no particular reason why they shouldn't have lounge access those times they don't go for an F or C ticket.
Aside of the fact that there are people sitting in Y that have paid more for that than a guy up front on a discounted C ticket.

It's a good tool to generate customer loyalty as well....

Best regards
Thomas


They have not shelled out any, their companies have. They should not have access to this benefit when purchasing cheap economy tickets that others who are paying several thousand dollars more are getting. Access should be granted on fares purchase only.

Customer loyalty is driven by the total package. A family member is Diamond Medallion on DL. Earlier this year a family emergency created a need to change his personal plans, while on one of those cheap Y tickets you’re talking about. DL bent over backwards to help he and his wife. He said it made him a customer forever. He spends 250,000 a year on DL for business, all J.

Successful businesses recognize that going the extra mile for customers like that bring long term gains even though they may need to eat cost once in a while. That one $300 Y fare may not matter to them. But the other $249,700 he spends does.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
DWC
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Joined: Mon Nov 06, 2017 7:49 pm

Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 5:23 am

lightsaber wrote:
I personally believe haphazard expansion is a problem at QR. I personally believe they have too diversied of a fleet. I would speculate Y class loyalty is not a root cause.

1. QR do nothing haphazard, specially with the blocade. Nor do EK.
Do not conflate the ME3 nor project negative assumptions on their economy, all economic indicators are green & above the OECD's - important.

2. The blocade however did turn tables on QR, with many NBs & WBs grounded that used to serve the UAE & Saudi Arabia. Prior to that, they were all needed, QR knew exactly what they were doing & even used WB's from LA. People are unaware of the reasons behind the blocade, no need to elaborate on them here, save to say that the State of Qatar was not cautious enough : a small country has to mind their bigger neighbours. Georgia vis-á-vis Russia or Panama vis-a-vis the USA come to mind. So they made a political fault and the coalition is dead set on making them pay. The ME3 are a political, economic, financial & tourism tool in the hands of their respective governments like nowhere else, save perhaps SQ, and CX in their prime.

3. QR are even more integrated to Qatar's economy than EK are to DUbai or way behind EY to Abu Dhabi. QR cannot be analyzed by narrow Wall Street cannons, it is a core profit generating company within the state of Qatar, in that respect quite profitable when all externalities are factored in : they drive what little diversification & premium tourism Qatar have ( hotels, residences and the like ), all World map positions Qatar were crowned for with upcoming world events ( World cup, etc. ). Without QR, that would never have happened, never mind Al-Jazeera & all the gas they produce - ask Bahrein.

4. AAB just announced QR had become the world's first cargo airline, I assume that if this isn't true, it must be close & that EK would denounce it but hasn't. Either way, no small feat with EK next door, EY are no small player either as Abu Dhabi is economically more diversified than Dubai.

5. Indeed, Y pax have little loyalty. For instance, QR are the preferred ME3 airline used by the Chinese to fly comfortably dirt cheap to Europe, simply because they are systematically cheaper than EK.

6. This seems to be partly due to the fact that QR are believed to have the lowest operating costs of all ME3 ( TK's may be lower still ). QR's strategy is to foster traffic through lower Y fares while luring J pax with industry-leading proprietary Qsuites & better exclusive lounge service to make up for the former. EK not only have prime-mover advantages QR cannot compete with ( Dubai as a connecting point, the A380 aura, better IFE, a more diversified Skywards, etc etc ), EK charge a premium QR cannot : in the eyes of Y pax, QR are just a good FSC, whereas EK/Dubai are some Disneyland/Vegas in themselves all in one.

7. I keep repeating here that bottom-line profits or losses are mere accounting results, often window-dressed, not an economic result. One has to see further up in the books where the money was alloted. QR are a huge cash-flow generating machine. Other than the reasons stated by AAB, take out for instance all the investments QR have made in other OW stock and their finances will instantly look hundreds of millions better, but economically & politically weaker. QR are buying their way into the World, thanks to increased influence in a few selected legacies. With time however, as China is indeed downsizing the role of Hong Kong & CX in favour of both Shanghai/MU & Canton/CZ, not to mention that Shenzhen/ZH (184 frames) are on the rise, CX may look like a bad investment in the future depending on how HK's unforeseen situation develops. No one is immune from unforeseen circumstances, Enron, Blockbuster, Kodak, Nokia all bit the dust because they didn't adapt. The ME3 all adapt fast, QR is adapting fast to nefarious neighbours. EY did courageous & strategic moves sound at the time, that these backfired splendidly afterwards is an ex-post reality, no one expected AB or 9W to go under. Same for Airbus & the A380 or Boeing with the 748i, though some did foresee it. While the ME3 follow a similar global business model, they are actually very different animals, and so are TK : their fleet differences show different strategies, QR's strategy is closer to TK's than EK's.

8. Air Italy posted a loss, apparently not so much because of operational losses but because of one-time capital-high investments, massive route openings & changes, i.e. their bottom-line next year should look better next year.

Just to say that companies like QR must be judged in periods of 5 to 10 years, not yearly, to see how well or badly they are doing. The bottom-line is only one metric, important for shareholders & stock options, but says little of how a company is actually performing. It's like analyzing a household's way of life by looking at what is left of their money at month's end : in between they may or not have bought a car, paid tuition, got a PhD, travelled, invested, paid massive hospital bills, who knows, even the Rothchilds could spend all their money within a month or a year & yet post a result deep in the red - is that a loss ?

So what is $632 million as a loss ? Big money for sure, yet no more than say 3 A350 at negociated prices. QR can stomach that no problem for a few years if need be given the circumstances. In fact, they are growing faster & fatter than EK, discount that this year's millions in % growth and the bill is actually lower.
 
DWC
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 6:09 am

Please note it is not my intention to pick on you, Lightsaber, but if anyone wants to understand what is actually happening in that part of the Gulf, there are specifics people gladly overlook. So let me share some more items I have observed, fascinating stuff, but not enough for me to live there.

lightsaber wrote:
QR has been too much 'me too' and gave first mover advantage to EK. EK also fundamentally changed laws to attract expatriates to grow their economy and O&D traffic.
This isn't just the airline. Qatar must diversify the economy. This means helping people to move to Doha.

1. QR are not "me too" other than being a new major superconnector, their biz model is actually different from EK's, more focused & fine-tuned like TK's, in fact their current limited bilaterals with Australia limits any prospect for QR to develop like EK/EY.

2. QR never "gave" EK first mover advantage, EK "are" the first mover, QR are playing catch-up yet differently.

3. Qatar are not a multi-city country with wide sand expanses like the UAE, but a city state, in some ways similar to Iceland : while they officially boast some 3 million inhabitants, actually 88% are foreign workers, i.e. the autochtonous Qataris are barely more than Icelanders : some 300 000 only, so barely more than half of Paris' XVth district (the largest of 20 ) to put matters more into perspective, 92% live in Doha thus way more than the 60% concentrated in the Reykjavik region. Because they dug a canal south, Qatar are by all means a desert island like Iceland are a much larger volcanic desert island, no one actually wants to live out of the city, in fact I know of no one who dreams of living in Qatar. There is little where to expand other than live on dry hot barren rocks & some oryx to make up for Iceland's horses.
Qatar have actually attracted as much as they could, they are already a dangerously small minority within their own country (12%), surely they cannot go much beyond that without diluting themselves into oblivion. In addition, Qatar do not want to lose more of their identity, so the Qatar & Qatari populations will not grow significantly.
https://en.wikipedia.org/wiki/Demographics_of_Qatar
 
lalib
Posts: 87
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 8:47 am

Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:

- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers

The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them
 
chonetsao
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 10:39 am

moa999 wrote:
And at the other outstations with QR lounges with the same policy (LHR and BKK, and possibly soon SIN), there are other oneworld lounges that can be used


Not true. In LHR they send economy pax to SkyTeam lounge.

EK build lounge for all passengers. Qatar does not, but gave inferior product to second class passengers.

They made their strategy clear, I understand. Business is business. So I don't fly with them, period.
 
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acavpics
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 3:35 pm

lightsaber wrote:
Does anyone know how QR's routes to North America are doing in load factor or anecdotal evidence on yield? It seems like EK never lost first mover advantage.

As to treating IW, it seems as if AA hasn't played well. Someone posted upthread there is another lounge for Y oneworld and others. Of course if QR doesn't meet your expectations someone will fly another airline.

I personally believe haphazard expansion is a problem at QR. I personally believe they have too diversied of a fleet. I would speculate Y class loyalty is not a root cause.

Lightsaber


Based on Bureau of Transportation Stats, IAD and IAH are the lowest out of their US routes, with loads dipping into low 50s and even high 40s (IAD in April) during off-peak season, as per 2018 data. The other routes seem to have healthy loads for most of the year. ATL was one of few US destinations where the loads never dropped below 65% (Inbound and Outbound), which is a bit surprising, given that ATL does not is not a hub for any of QR's partners.
 
DWC
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 4:03 pm

Atlanta is a huge economic power in South-East US : UPS, Home Depot, AT&T Mobility, Coca Cola are only some of the major companies headquartered there, and ATL capture much of the traffic in neighbouring states other than FL. As long as ATL is not served by other ME3 or DL does not fly to the Middle-East, QR have that major market all to themselves : why EK do not fly there is beyond me.

This is one instance where QR show they are developping first mover advantage stratagies, but they are others :
1. Fly where EK do not : ATL is only one example, someone mentionned KMT, there are others.
2. Best J class, even more design than EK's first
3. Exclusive premium lounges to develop premium pax loyalty, in addition to other OW lounges in DOH as someone dutifully posted.
The whole of DXB airside is a huge Y lounge, it was purposefully designed that way. QR need not do that, their banks can be shorter, efficiently moving people East-West.
4. QR are now the most efficient Equity Alliance ever with IAG/LA/CX/IG - they even tried AA, DL comes second with AM/MU/KE.
Seems James HOGAN had a brilliant idea others are now capitalizing on - pun intended.
5. The coming world events mentionned above will have a coverage like no other but for the Olympic Games.
Other than "free publicity" that can be valued in accountancy as "assets", QR will get newer pax in the future thanks to it ( increasing global brand awareness ) & some momentaneous higher pax loads around these events. While Dubai has enough attractions & biz to sustain its economy, I am not sure the F1 championship & Ferrari museum garner more pax for EY, and probably not beyond aficionados.
6. I have no idea if QR are cooperating with IR in any way, but their governments are - like the UAE are not, but if so, that's another exclusivity.

lalib wrote:
Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:
- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers
The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them

In addition, yes.
But I don't think Dubai & EK will let QR grow faster than them for much longer, EK/FZ are adapting fast, see the "DWC expansion" thread.
Dubai as a whole have way more leeway & partners than Qatar will ever have.
 
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lightsaber
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 4:21 pm

acavpics wrote:
lightsaber wrote:
Does anyone know how QR's routes to North America are doing in load factor or anecdotal evidence on yield? It seems like EK never lost first mover advantage.

As to treating IW, it seems as if AA hasn't played well. Someone posted upthread there is another lounge for Y oneworld and others. Of course if QR doesn't meet your expectations someone will fly another airline.

I personally believe haphazard expansion is a problem at QR. I personally believe they have too diversied of a fleet. I would speculate Y class loyalty is not a root cause.

Lightsaber


Based on Bureau of Transportation Stats, IAD and IAH are the lowest out of their US routes, with loads dipping into low 50s and even high 40s (IAD in April) during off-peak season, as per 2018 data. The other routes seem to have healthy loads for most of the year. ATL was one of few US destinations where the loads never dropped below 65% (Inbound and Outbound), which is a bit surprising, given that ATL does not is not a hub for any of QR's partners.

That implies IAD and IAH contributed to the loss. With that low of a load factor only a narrowbody could be break even. The other routes sound healthy, these two seem to be vanity routes that should be cut.

Lightsaber
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SteelChair
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 8:03 pm

lalib wrote:
Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:

- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers

The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them


I'm not in agreement with that at all. The blockade is merely the visible effect of much deeper political issues.
 
jetwet1
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 8:11 pm

Just one thing to note, I recently booked two LAX-BKK round trips for later this year, QR were by far the cheapest in J, $2200 each round trip, that is LAX-DOH-BKK-DOH-LAX, for $1100 each way, including a hotel room in DOH to use during the layovers.

With the yields on those flights it is no small wonder they are losing money.
 
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lightsaber
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 8:16 pm

SteelChair wrote:
lalib wrote:
Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:

- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers

The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them


I'm not in agreement with that at all. The blockade is merely the visible effect of much deeper political issues.

I'm not in agreement either. QR hasn't shown a profitable history.

Their main disadvantage is being #3 behind TK and EK.

Their second worst disadvantage is large competitors with higher O&D are accelerating their growth mode.

Their third disadvantage is having India and China seats and slots capped.

Their 4th disadvantage is bypass. If the NMA happens, I believe India will be the #1 market to benefit and the ME3 the top airlines caught at a disadvantage. I think project Sunrise SYD-LHR as well as the existing PER-LHR is hitting the market yield. SVO will tap into the EU to North Asia.

The 5th is connecting traffic is reduced yield. With so many super connecting hubs competing, it will get worse.

Lightsaber
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Dieuwer
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 8:23 pm

3rdGen wrote:
All that matters therefore in the grand scheme of things with the ME3 is always the following:
IS THERE MORE MONEY ENTERING THE NATION THAN LEAVING? I.e. what is the status of the government's current account. So long as it's growing or at least not shrinking past 0 the losses of individual companies can always be covered.


Not just the ME3.
Alitalia - the perennial loss making airline - is being propped up by an equally broke Italian government. So clearly, you do not need to have a growing current account to prop up airlines. ;)
 
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acavpics
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 9:06 pm

lightsaber wrote:
SteelChair wrote:
lalib wrote:
Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:

- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers

The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them


I'm not in agreement with that at all. The blockade is merely the visible effect of much deeper political issues.

I'm not in agreement either. QR hasn't shown a profitable history.

Their main disadvantage is being #3 behind TK and EK.

Their second worst disadvantage is large competitors with higher O&D are accelerating their growth mode.

Their third disadvantage is having India and China seats and slots capped.

Their 4th disadvantage is bypass. If the NMA happens, I believe India will be the #1 market to benefit and the ME3 the top airlines caught at a disadvantage. I think project Sunrise SYD-LHR as well as the existing PER-LHR is hitting the market yield. SVO will tap into the EU to North Asia.

The 5th is connecting traffic is reduced yield. With so many super connecting hubs competing, it will get worse.

Lightsaber


With all these major factors contributing to QR's financial conditions, what can/should the airline do to eliminate or at least reduce these losses? Or does their financial status depend entirely on things that are completely out of their control (Blockade, Iran tensions, fuel prices etc)?
 
DWC
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 9:17 pm

jetwet1 wrote:
Just one thing to note, I recently booked two LAX-BKK round trips for later this year, QR were by far the cheapest in J, $2200 each round trip, that is LAX-DOH-BKK-DOH-LAX, for $1100 each way, including a hotel room in DOH to use during the layovers.
With the yields on those flights it is no small wonder they are losing money.

You'd be surprised to know what is the marginal cost to operate a J seat or accomodate a pax in a room that would be empty anyway.
$2200 R/T is 2200 QR took from the competition into their pocket, from what I know of means in the industry, they made a profit on that.
What is more, it's $2200 multiplied by all pax lured that way, so as much less in the red for them : healthy business !

Premium seats are superior goods, meaning elasticity price is > 1, i.e. people will not buy it if too cheap, higher fares indicate how much is charged elsewhere relative to the real cost. While I trust QR would love to charge more, they squeezed their costs down, adapted to the daunting political stalemate they are in & are still growing.
And that's where QR show good command of customer psychology : they charge double for J relative to Y (less than EK), expensive enough for most Y not to get on board but low enough to take over pax on what they know to be a superior service in an industry leading cabin.

EK specially ( EY & TK to a lesser extent ) are taken at their own game, reburfishing their 20 years old F cabins is not economical so they are keeping it (!), the new suites are on a few new 777 only, just because QR have put the F experience at the price of J class sold below EK J fares. I could see enough reason there for Dubai to sustain the current blocade ;)
 
B777LRF
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 9:33 pm

The purpose of QR is of strategic interest to Qatar, vitally so following the blockade. This is most easily seen by the rapid rise of QR Cargo, to become on the the biggest airline cargo carriers around. The reason is simply: Landlines of communication have been cut off, necessitating the utilisation of air cargo for importation of long range of essential goods. With the Saudi's keeping themselves very buys physically cutting Qatar off, making it an island rather than peninsula, the importance of controlling and maintaining vital air links extends far beyond QR's ability to turn a profit or not.

In short it's an essential service provider, a vital provider of jobs for an aspiring youth, their most important PR vehicle and - much more than the far bigger earning gas industry - the pride of the nation. Making a profit is, in this context, something that's "nice to have" but far from essential; the State of Qatar could fund an annual multi-billion deficit for at least the next 100 years or so, or however long it is their gas reserves are forecasted to last, without breaking even the slightest of sweats.
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Waterbomber2
Posts: 452
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Re: Qatar Airways Reports $632 Million Loss

Sat Sep 21, 2019 9:56 pm

Since a while QR has been pricing itself out of the market.

No one books QR because it's QR, the only reason would be that they offer better value than the competition.
QR used to pop up in the first few results of my long haul flight searches, but nowadays they are vanishing in the mass of available flight options.
In an attempt to increase their yields they are killing their own load factors.

The results that I see popping up as first are AF/KLM and LH.

QR needs to decide now what they want to be.
Do they want to become a superconnector like EK, or retreat to become another Gulf Air like EY?

I think that QR has been heavily loss-making and heavily subsidised since ever.
The only reason to report losses at this time would be an attempt to sooth the airlines complaining about the subsidies and Air Italy.

On the other hand, they have to be careful: Chinese carriers are the new threat for the ME3.
If they as much as dare to think about downsizing, the Chinese wouldn't even think twice about eating them for breakfast.
 
MIflyer12
Posts: 5856
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Re: Qatar Airways Reports $632 Million Loss

Sun Sep 22, 2019 12:58 am

Waterbomber2 wrote:
I think that QR has been heavily loss-making and heavily subsidised since ever.
The only reason to report losses at this time would be an attempt to sooth the airlines complaining about the subsidies and Air Italy.


Any carrier can increase reserves for anticipated charges, but if you think accounting practices are really that fungible there's no reason to read another financial report (or discuss same) ever again.
 
jetwet1
Posts: 2918
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Re: Qatar Airways Reports $632 Million Loss

Thu Sep 26, 2019 7:47 pm

DWC wrote:
jetwet1 wrote:
Just one thing to note, I recently booked two LAX-BKK round trips for later this year, QR were by far the cheapest in J, $2200 each round trip, that is LAX-DOH-BKK-DOH-LAX, for $1100 each way, including a hotel room in DOH to use during the layovers.
With the yields on those flights it is no small wonder they are losing money.

You'd be surprised to know what is the marginal cost to operate a J seat or accomodate a pax in a room that would be empty anyway.
$2200 R/T is 2200 QR took from the competition into their pocket, from what I know of means in the industry, they made a profit on that.
What is more, it's $2200 multiplied by all pax lured that way, so as much less in the red for them : healthy business !

Premium seats are superior goods, meaning elasticity price is > 1, i.e. people will not buy it if too cheap, higher fares indicate how much is charged elsewhere relative to the real cost. While I trust QR would love to charge more, they squeezed their costs down, adapted to the daunting political stalemate they are in & are still growing.
And that's where QR show good command of customer psychology : they charge double for J relative to Y (less than EK), expensive enough for most Y not to get on board but low enough to take over pax on what they know to be a superior service in an industry leading cabin.

EK specially ( EY & TK to a lesser extent ) are taken at their own game, reburfishing their 20 years old F cabins is not economical so they are keeping it (!), the new suites are on a few new 777 only, just because QR have put the F experience at the price of J class sold below EK J fares. I could see enough reason there for Dubai to sustain the current blocade ;)


Let's look at it this way, QR $2200 LAX-DOH-BKK-DOH-LAX NZ a month later $4800 LAX-AKL-LAX ....That's 23,100 miles or 9 cents a mile on QR v 13,000 or 36 cents a mile on NZ.

I get what you are saying and yes, if you are trying to drive other airlines out of business or don't mind burning money then yes, QR is doing it right, but, if you want to make money, then NZ probably has a better shot at it.
 
B777LRF
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Re: Qatar Airways Reports $632 Million Loss

Thu Sep 26, 2019 8:52 pm

Another thing to keep in mind: There's only ever been one consistently profitable department in QR, and that's their F&B division. Not because of all the taxfree they sell, or not, onboard their aircraft. It's something completely different, which I'm guessing only a tiny fraction of this board would have guessed.

QR holds the monopoly on import and retail of all alcohol and pork related products in Qatar. That's their big money earner, not faffing about with shiny aeroplanes.

As I said, the purpose of QR (the airline) is not being a profit generating machine. It's a marketing, employment and communications tool.
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vadodara
Posts: 969
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Re: Qatar Airways Reports $632 Million Loss

Thu Sep 26, 2019 9:24 pm

QR had to park most of their narrow bodies because of the blockade; they had to be replaced by medium range aircraft because of the blockade.

If one is trying to run a hub-spoke model and where you had competitive advantage (spokes) saw an increase in flying time by 25-50% so as to require a change in aircraft, they are screwed.

Seems like they should go and kiss Emir of Abu Dhabi's ass to solve this problem.
 
Waterbomber2
Posts: 452
Joined: Mon Feb 04, 2019 3:44 am

Re: Qatar Airways Reports $632 Million Loss

Sun Sep 29, 2019 10:25 am

MIflyer12 wrote:
Waterbomber2 wrote:
I think that QR has been heavily loss-making and heavily subsidised since ever.
The only reason to report losses at this time would be an attempt to sooth the airlines complaining about the subsidies and Air Italy.


Any carrier can increase reserves for anticipated charges, but if you think accounting practices are really that fungible there's no reason to read another financial report (or discuss same) ever again.


Why, did QR publish a financial report?
For whom? Stock markets? They are not publicly traded.

QR's announced financial results can include a lot of subsidies that can't be seen.
All governments prop up their airlines. Some do it visibly, others discretely using outrageous fare structures for goverment travel. The ME3 do it, the Asian airlines do it, the European airlines do it, the US airlines do it.

I don't completely agree with your idea's about business class profitability, DWC.
If you look at the floor space occupied by business class seats, you could usually fit at least 4 Y seats instead of 1 J seat.
So 7 empty J seats will be equivalent to at least 3 rows of empty Y seats.

I think that while business class does make sense in general terms, I wonder how much it makes sense for a super connecting carrier, considering that non-stop options will attract the lucrative part of that market.
The only lucrative niche you can attract are for city pair combinations where there is little offer and demand, people flying on miles, or those who fly once a year and thus want to do it in style.
 
by738
Posts: 2997
Joined: Wed Sep 20, 2000 7:59 am

Re: Qatar Airways Reports $632 Million Loss

Sun Sep 29, 2019 11:03 am

Yeah id say QR. Bankrolling too many half empty flights for too long now and chucking capacity where existing flights are nowhere near full. Just look at some of the UK regional routes over the past 5 years for example...
 
Weatherwatcher1
Posts: 266
Joined: Sun Mar 03, 2019 5:14 pm

Re: Qatar Airways Reports $632 Million Loss

Sun Oct 06, 2019 2:41 pm

lalib wrote:
Are we all in agreement that despite this loss QR has a solid future ahead? These are the advantages that they have going for them:

- Major event in 2022 unparalleled to anything ever hosted in the ME
- Modern Airport that can handle further expansion
- Versatile fleet of WB and NB
- Within top 3 Cargo Carriers

The only disadvantage they face is the blockade, Interesting. They are still in growth mode and set up well. I've never flown them but heard they have an excellent product. Definitely can close the gap with EK or even overtake them


The blockade makes them less competitive. I think the question is what may happen next? Will it diffuse and go back to the way it was or will it get worse? It will impact the future for Qatar Airways

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