Qatar Airways is developing a First Class concept and pursuing aircraft orders from aviation giants Boeing and Airbus, as part of a broader strategic overhaul under new group CEO Badr Mohammed Al Meer.
“This is a new era,” Al Meer told CNBC on Thursday, unveiling changes at the airline that follow a multi-month “war room” review. Formerly the chief operating officer of Qatar’s Hamad International Airport, Al Meer took over from long-time predecessor Akbar Al Baker as Qatar Airways CEO in November and seeks to refresh the airline’s strategy and reset supplier relationships.
Al Meer confirmed to CNBC that Qatar Airways is now developing a high-yielding First Class concept for its cabins.
“We wanted to combine the experience of flying commercial and flying on a private jet and develop something new,” he said. “We are 70% to 80% ready. We are only finalizing colors and small touches, but hopefully we will be able to announce it very soon.”
First Class seating typically offers a more spacious, premium quality and higher cost experience aboard an aircraft. Some airlines have abandoned, reduced or rebranded First Class seats in a bid to maximize aircraft space and offer more economic seating for budget-conscious travelers.
Along with preparing its First Class proposal, Qatar Airways is redesigning its premium “Q-Suite” class of seats, and the latest offering is set to debut at the Farnborough International Airshow in July.
New orders
The Gulf carrier has also submitted a Request for Proposal to Boeing and Airbus for a “big” new aircraft order, Al Meer said.
“We released an RFP to create some competition between both suppliers,” he noted, without disclosing specifics. “We will go through the process, and, with an order this big, we need to take our time.”
Al Meer wants to enhance the service offering and capitalize on momentum following the Qatar World Cup, which helped the airline deliver a record net profit of $1.21 billion in the fiscal year 2022-23, as well as the highest yields and load factors in its history.
“The markets that we want to grow in are China, India, Australia, Japan, Korea, and a few others,” Al Meer said.
He separately flagged that regional demand for flying is high, and passenger numbers had picked up by more than 30% in the last four months, while forecasting growth is likely to “be more settled below 10%-15%,” for the rest of the year.
A Qatar Airways Boeing 777 In New York.
Leslie Josephs | CNBC
The new aircraft order proposal follows a major legal dispute between Qatar Airways and Airbus over safety concerns caused by paint degradation. It also comes amid an ongoing crisis of confidence at Boeing after the Max 9 door blowout in January raised concerns over safety, quality controls and production and delivery delays.
“We are affected when our aircrafts are not being delivered on time,” Al Meer said. “I know Airbus and Boeing have certain problems. We have full trust in both organizations and they’re strong enough to overcome those problems.”
Al Meer noted he expects to receive Qatar’s latest Boeing 777X order by the end of next year, adding he’s “110% confident” Boeing makes safe planes.
Al Meer also said Qatar Airways would halt Al Baker’s plans for a fast “phase-out” of the flagship Airbus A380. Rival Emirates also signaled it would hold onto the airliner, despite Airbus ending its production in 2021.
Next steps
Al Meer has taken steps to address criticism about the airline’s workplace practices, including relaxing a controversial night curfew rule for cabin crew and reversing a long-standing ban on Qatar Airways staff sharing workplace pictures on social media.
“It was very clear that we needed to do some changes there,” Al Meer said. “We want our staff, and we want the airline to be the people’s choice when it comes to working with us.”
The strategy update comes as Qatar Airways faces renewed pressure from rival Gulf carriers, such as Emirates and Etihad, as well as upstarts like Saudi Arabia’s Riyadh Air, which is also buying planes to compete on key routes in the coming years.
“Competition will help us raise the benchmark,” Al Meer said. “The way I see it, the pressure is Riyadh Air… they will have to compete with the best of the best.”
Al Baker played a key role in shaping Qatar Airways into a profitable global airline. He led the carrier through major events including the September 11 attacks, the global financial crisis, the Gulf diplomatic dispute, and the Covid-19 pandemic.
Now, his successor wants to bring the airline into a new era — dubbed “Qatar Airways 2.0” — during which he did not rule out the possibility of an initial public offering.
“We might consider it in the near future,” he said when asked if Qatar Airways could consider going public. He nevertheless stressed the decision would lie with Qatar Airways stakeholders and the Qatari Government.
This story originally appeared on CNBC
