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.”
Akbar Al Baker, CEO of Qatar Airlines
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.”
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