Qatar Airways boss Akbar Al Baker has dismissed the fears of Emirates president Tim Clark over long haul low-cost carriers, saying they will struggle in future.
Asked about the increasing market share of these rivals, Al Baker said of long-haul LCCs: “It doesn’t work. They will not succeed. Air Asia is struggling, Norwegian’s nose is just above the water. Lufthansa tried and withdrew with the Dubai Eurowings flight.”
AL Baker said that Qatar Airways – which begins services from Dublin to Doha this summer – competed by mixing low-cost fares into its own full service airline offering, but LCCs will suffer when currently low oil prices rise again, it was reported here.
“Maybe long-haul low-cost will work when the fuel price is 30 dollars a barrel. But once it goes beyond 50 dollars I guarantee it is not feasible. The cost to operate becomes so high that the yield you get from low-cost long-haul will not cover the cost, at time it won’t even cover the DOC. Don’t forget that [Freddie] Laker who started long-haul low-cost failed when oil was only 10 dollars a barrel.”
He refutes the claims of airlines such as Norwegian – which is to commence services from Ireland to the US later this year – that its modern fleet of Dreamliners make them more cost-efficient.
“The newer aircraft you put on, the more red ink will flow over your paper, because you have such a high ownership cost.”
On transatlantic routes, he believes legacy carriers such as British Airways will see off the LCC rivals: “It is a survival of the fittest. And the survival will be BA because it’s a strong network carrier compared with Norwegian.”
