Spreading wings: Qatar Airways CE Akbar Al Baker expects to report a loss as a result of the dispute over United Arab Emirates and Saudi Arabia airspace. The airline on Monday acquired a 9.61% stake in Cathay Pacific. Picture: REUTERS
Spreading wings: Qatar Airways CE Akbar Al Baker expects to report a loss as a result of the dispute over United Arab Emirates and Saudi Arabia airspace. The airline on Monday acquired a 9.61% stake in Cathay Pacific. Picture: REUTERS

Singapore — Qatar Airways wants to create a virtual mega-carrier that will benefit from economies of scale in negotiations on fuel and aircraft purchases, while it boosts investment in other airlines, its CE said on Tuesday.

The Qatari carrier announced a $661m deal on Monday to buy a 9.61% stake in Hong Kong’s Cathay Pacific Airways to broaden its reach and potentially allow the oneworld alliance member to increase traffic through its Doha hub.

"Frankly, I wish I could buy more. But the Swire Group and Air China hold most of it and I’m the third-largest shareholder, which is not bad," Qatar Airways CE Akbar Al Baker said at the CAPA Asia Summit in Singapore, referring to Cathay’s biggest stakeholders.

Qatar Airways has been unable to fly to the previously lucrative markets of the United Arab Emirates and Saudi Arabia because of an airspace rights dispute, prompting the carrier to invest elsewhere.

Al Baker said the airline expects to report a loss in the financial year to March 31 2018, as a result of the blockade.

The airline has acquired 20% of British Airways parent International Consolidated Airlines Group, 10% of South America’s Latam Airlines Group and 49% of Italy’s Meridiana.

Al Baker said that Qatar Airways wants shareholdings to be exchanged between itself and its portfolio airlines as it seeks to become a virtual mega-carrier.

"I see a lot of synergies we could bring as a group," he said, referring to savings to be gained from the envisaged increase in bargaining power.

"I hope that one day in the not too distant future we all, these four groups, get together and exchange shareholdings in each other so that we will become a real mega-carrier. That is something that some people have tried, but not successfully."

Etihad Airways has pulled back from a strategy of taking minority stakes in other airlines after struggling European carriers Alitalia and Air Berlin entered administration.

Andrew Herdman, Association of Asia Pacific Airlines director-general, said that the history of airlines owning minority stakes in other carriers is mixed.

"It remains to be seen what influence you can exert as a minority shareholder," he said during a panel discussion at the conference.

Reuters

Please sign in or register to comment.