Akbar Al Baker, CEO, Qatar Airways, says the airline is pursuing acquisitions once again after it was beaten in its offers for Serbia’s JAT Airways, Air Seychelles and Greece’s Olympic Airlines recently. Al Baker says the airline is “actively discussing opportunities” with other passenger carriers and that “when we see that there are strong synergies between the two carriers we are open to investment”. He also confirmed that Alitalia had approached Qatar about an investment.
It is clear that Qatar has been beaten back at virtually all turns by Etihad, which is in the final stages of investment talks with Alitalia after investing in JAT and Air Seychelles. But Al Baker is pragmatic about the whole thing stating this week that “we don’t want to get involved in fixing other people’s problems”.
Although JAT has gone to Etihad there remain other options for Qatar and the like in Croatia Airlines, B&H Airlines and Slovenia's Adria Airways, which is starting its privatisation process at this time under duress from the European Commission, while Montenegro Airlines remains on the table.
But it is not all rosy news for Etihad at this time as today we learn that Turkish Airlines recorded a 43% year on year increase in passenger traffic from Abu Dhabi in 2013. This means that Turkish Airlines is gaining a substantial foothold in connecting passengers to the world from right under the nose of Etihad, and it is doing it through running a low cost operation that it seems Etihad might need to match at times if it is not to continue to lose market share in a battle between two airlines that are rapidly growing their fleets. This could be Etihad’s weak spot. With its huge growing fleet, the airline needs to maintain a huge advantage of control at its home Abu Dhabi hub in order to secure the all-important connecting traffic that is at this time increasingly flowing to Istanbul.
In other interesting news we learn that demand for Malaysia Airlines (MAS) flights from New Zealand and Australia has more than halved in the month following the MH370 disappearance according to booking agents, while Malaysia Airlines' New Zealand manager, Dzulkefli Zakaria, said demand had been unaffected. Someone must be incorrect in this matter and it is the booking agents who have nothing to gain or lose by putting out this data so we must take what they say at face value and ask the question: If major Australasia traffic that routes through to Asia and Europe is tailing off, why has MAS not taken steps to adjust its frequencies and aircraft types on these routes in the short term?
Our ASK data shows that MAS has made no real changes as yet. Indeed, this week Malaysian Airlines began flying daily between Auckland and Kuala Lumpur, up from six times weekly, in response to increased demand on the route over the September/October/November 2013 period. MAS will be hoping that any loss of bookings will be a blip that will tail off over the next few weeks after which demand will return to normal. That is the likely scenario, but it is one that in this instance carries risk, MAS has increased ASKs into Australasia and has not adjusted down ASKs elsewhere and thus if this rumbles in the news for another month then MAS will be overly exposed. The US airlines have taught us all that moving to cut capacity very quickly and then put it back as demand increases is the key to stemming losses in the event of a disaster. MAS figures later in the year will show us if this lesson has been taken-in and if MAS has managed capacity in a modern dynamic way, if it has then many will draw the conclusion that even though the brand has been run through the mill the management can adjust accordingly. If figures show dramatic falls in bookings while capacity has continued to increase, then difficult questions will have to be asked of MAS management, just as it was with a number of European majors post financial crisis when they drove their respective airlines close to the wall by not moving with demand.