As airlines across the world are either grounding planes or deferring aircraft deliveries in order to tackle the economic slowdown, Doha-based Qatar Airways believes in going against the tide. Among its many plans, the airline is currently working towards making history by being the first carrier to fly on GTL (gas to liquid).

In an interview with Emirates Business, the airline's Chief Executive, Akbar Al Baker, the man fuelling the move, reveals that Qatar Airways could be flying all its planes on GTL as early as 2010.


You said the airline has broken even. When did Qatar Airways start making profits?

We were profitable in financial year April 2007-March 2008, we have been profitable in FY 2008-09 and we will be profitable in FY 2009-10. But I do want to clarify that the 2009-10 profit is an estimated one as we still have 10 months to go before our financial year gets over in March 2010.

Any projections in terms of profit for the current financial year?

No. We are a 50 per cent private and a 50 per cent government concern. So we do not establish our accounts. However, our profit increase between 2007-08 and 2008-09 has decreased by 30 per cent because of the high oil price. But again, we had a positive impact on our oil price due to our fuel hedging strategy.

How much have you hedged your fuel for this year? And at what price?

We have hedged 50 per cent of our fuel for the next three years, starting last year. But I cannot tell you at what price we've hedged.

Do you think it is the right time for the airlines to hedge?

Well, if you hedge cleverly, then yes, it is a good time. We have not had any losses as such due to the recent volatility in oil prices. We did lose slightly for two months, but we made a good profit in our bottom line. It was really negligible.

As the air travel business is slowing down, airlines across the world are increasingly focusing on ancillary revenues. What about Qatar Airways?

Yes, we are actively looking at ancillary revenues. We have many subsidiaries in the areas of ground handling, aircraft catering, duty free, beverage distribution, and an advertisement company. And finally, we also have a holiday division.

So how is the airline's revenue divided between the airline and other [ancillary] subsidiaries?

The airline currently accounts for 80 per cent of our total revenues while the subsidiaries comprise the rest 20 per cent.

Do you see that equation changing slowly?

When we invest in new businesses, yes, it will change. What new businesses we would be looking at is still under study.

As the airline volume grows, the percentage will grow just maybe between five and 10 per cent, though the revenues may double from what we currently do. But at the same time, the airline is also growing. I do expect ancillary to grow more in percentage terms over a period of five years.

How close are you to flying your planes on the GTL (gas-to-liquid)?

As per the current schedule, GTL mixed with kerosene product will be available to us by the end of this year, subject to certification by regulatory authorities. As soon as we have it, all our aircraft will start flying on GTL. Once it is certified, we can put it in our planes tomorrow.

How much do you expect it will save Qatar Airways once all your planes are fuelled by GTL?

GTL will not be a cheap fuel. It may not bring savings but it will increase the range of our aircraft significantly, by about 10-15 per cent (it is still being evaluated) with the same amount of fuel, while at the same time reducing carbon emissions.

Most airlines across the world are increasingly grounding aircraft to fight the slowdown. What about Qatar Airways?

No, we have no plans to ground our aircraft. Instead, we are doing maximum utilisation of our aircraft. We are the highest utilisers of Boeing 777, Airbus A320 and A330 aircraft.

So, are you going against the tide?

We always go against the tide at Qatar Airways. And we are very good at that.

You've said if required you would go ahead and launch a premium carrier or a budget carrier? Is it viable to be looking at launching an airline at a time when global air travel is at a low?

If somebody launches such a product and it takes away my market share, it means there is demand. And that is the time we will fill that demand.

Airbus said it is rescheduling its A380 delivery plans yet again as some customers have asked for delivery deferrals. How does it impact the delivery schedules for the five superjumbos you have on order?

We've asked for our deliveries to be in 2012. For us it won't be a delay as we were quite early in our deliveries and we have delayed it because the new Doha International Airport that we are building now will not be ready. We hope for it to open in 2011. But if we want our A380 deliveries to be earlier, Airbus will deliver them because they have others who have defered their early deliveries.

What about the delivery of your other aircraft such as Boeing's 787 Dreamliner, which has also been hit by delays, and Airbus A350 XWB (extra wide body)?

We have 60 Boeing 787s on order between firm orders and purchase rights. And we have 80 firm A350s. They will be delivered to us starting end-2013.

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