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Home / Business / Companies / Airlines

Why the Auckland-bound Qatar Airways is offering some of the cheapest fares

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
13 Jan, 2017 07:56 PM10 mins to read

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A line of Qatar aircraft at the airlines' hub in Doha, Qatar.

A line of Qatar aircraft at the airlines' hub in Doha, Qatar.

One of the world's fastest-growing airlines with a reputation for laying on the luxury and making a lot of noise will touch down next month in Auckland.

Qatar Airways will operate what will be the longest duration flight in the world from Doha to Auckland, landing early on Waitangi Day.

READ MORE: • The plane with the longest legs

In the lead-up to the launch its cut-price fares to Europe have already sent ripples through the travel market and state-owned Qatar is going head to head with a giant: Emirates which flies directly to Dubai in the neighbouring United Arab Emirates.

Qatar has offered some return fares for just more than $1200 and from a five-star airline those are regarded as a game-changer, forcing other carriers to put more low fares into the market for longer.

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Emirates last week announced a sale in which some return flights to Europe were priced at $1499 and fares to the United Kingdom were offered at $1599.

Qatar Airways, just 20 years old, now has a fleet of more than 190 planes and serves 150 destinations. It added 14 new ones in the past year and says Auckland has been on the radar for some time.

It also turns up the volume with no-expense spared launch parties. Qatar reportedly paid Kylie Minogue between A$500,000 ($527,423) and A$1 million to rattle through seven songs in Sydney last March.

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Jennifer Lopez appeared at an extravagant gala party to mark the start of flights to Atlanta from its Doha hub in May and Mariah Carey played at a star-studded event in Los Angeles in January.

There's no word on the headline act for what it's promising will be an "amazing" big Auckland launch.

Graphic / NZ Herald
Graphic / NZ Herald

In its boss, Akbar Al Baker, Qatar Airways has one of the most outspoken airline executives in the industry with a penchant for abruptly cancelling aircraft orders when planemakers don't play ball with deliveries.

Al Baker, who has the title His Excellency, has been the driving force behind the airline since its modern incarnation in 1997. He will be in Auckland to mark the inaugural flight and will be in the spotlight at media events and the big launch party at Auckland Museum.

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Last year the Sydney Morning Herald reported that after turning up late to a press conference he said: "I know that my airline is always creating a lot of hype wherever we go. I'm sure you also know I'm a very controversial figure in the aviation industry."

Flying into flak

Making noise can attract feedback, from a slew of awards for service, to some not so welcome.

It faces staunch opposition from United States airlines as along with other Gulf carriers, Etihad and Emirates, it expands into America with its new or near-new planes.

In claims that have been denied, the US carriers say the Middle Eastern airlines are advantaged by massive state subsidies to help pour seats into America. Capacity has doubled to 4.5 million seats a year since 2013.

Washington-based Human rights group AWARE (Alliance for Workers Against Repression Everywhere) late last year stepped up its push for a boycott of Qatar Airways because of what it alleges are human rights violations by the country and the airline.

In June 2015, the United Nation's International Labour Organisation (ILO) called on Qatar's national carrier to scrap several working stipulations for its female employees, including the rules for pregnant cabin crew prompting reform of conditions at the airline.

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Mariah Carey at a star studded Qatar Airways event held in January.
Mariah Carey at a star studded Qatar Airways event held in January.

While J-Lo belted out the hits for the airline last year, transport worker groups reportedly protested outside the venue.

The union representing cabin crew in New Zealand has concerns as well.

E tu Aviation organiser, Kelvin Ellis says while this country had no jurisdiction over the working conditions of overseas airlines, most New Zealanders would be worried by working conditions at the non-unionised Middle Eastern Airlines.

"Qatar has been the one that has faced the most scrutiny. I guess we're limited in terms of enforcement. They're operating consistently with the laws of their land," Ellis says.

"The cheap air fares come at a significant human cost and we'd like people to think about that when they book their next holiday."

In response to the latest AWARE claims, a Qatar representative says the airline respected the laws of every country it serves, and did not discriminate on the basis of gender, sexuality, religion or nationality.

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The cheap air fares come at a significant human cost and we'd like people to think about that when they book their next holiday.

Kelvin Ellis, E tū Aviation organiser

The airline offered tax-free pay, housing, global medical coverage and says that as a measure of how sought-after roles were, it receives 5000 applications every day for cabin crew positions alone.

"More than 112 nationalities were represented in its cabin crew staff alone, men and women who come to Qatar Airways for the career opportunity that may not be available elsewhere."

Boom in bookings

Qatar's arrival has led to a surge in bookings to Europe, among leisure travellers and business travellers.

"We've seen some fairly dramatic increases in volume with Qatar," says Nick Queale, Flight Centre NZ general manager corporate.

"We think that will keep going, particularly in the premium cabins. On the back of what Emirates has done with their direct flights [between Auckland and Dubai] last year where there was tremendous growth. We'd expect the same, albeit, that Emirates has a lot more seats."

Limited business-class seats for departure next month were as low as $4769 return to Barcelona or Amsterdam.

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WATCH: Grant Bradley talks the world's longest flight:

House of Travel marketing director Ken Freer said Qatar was on a growth track similar to that of Emirates, the world's biggest long-haul airline which has close to 250 aircraft, all Boeing 777s and A380s.

Freer said the low Qatar fares meant other airlines were leaving their cut-price fares in the market longer.

"They will eventually sell out but by having another airline flying with another daily service it means there are more of those daily fares available," Freer says.

"There doesn't seem to be a loser in this. It is stimulating New Zealanders to travel and it's also meaning that a number of people are [able to] step up a class in where they fly in the plane."

And the new service will boost inbound tourism.

Auckland Airport estimates that Qatar's service will deliver an additional 189,070 seats to the route and contribute $198 million to the New Zealand economy.

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Why Auckland was on the radar

Adam Radwanski is Qatar Airways' senior manager for Australasia and said the airline had studied the Auckland market for about two years.

"Over the last years we have undergone a significant growth across all continents launching 12 to 14 routes a year," Radwanski says.

"Auckland has been a desired addition to our route map for a while. Our global customers demanded it and after our head office did some analysis we finally decided to launch."

Nearly all airlines these days have fully flat beds in business and similar configurations in economy. What is difficult to copy is the service culture.

Adam Radwanski, Qatar Airways' Australasia senior manager

The service was meant to have started last month but was delayed by having to juggle planes around deliveries.

Radwanski said demand was exceeding expectations.

During the New Zealand summer most traffic would be southbound from Europe and the Middle East while in the European summer more Kiwis would be flying north through Doha with most going on to the airline's 39 European destinations, one more than Emirates based in Dubai across the Arabian Gulf.

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Battle of the Gulf giants

Radwanski plays down competition with the bigger airline which operates five super jumbos between New Zealand and Dubai every day with nearly 10 times the number of seats Qatar has on its 259-seat 777-200LR.

"We not only compete against them but every airline operating into New Zealand that offers connections to our market. For us it's about ensuring we have the right product.

While "some of our competitors" had significant capacity and were well established, the key to success were Qatar's unique selling propositions.

These include the network which has smaller European and African ports, the connection times through Doha's Hamad International Airport, airpoints reciprocity with One World airline alliance partners, which includes Qantas and American Airlines, and the service aboard its aircraft.

Qatar Airways chief executive Akbar Al Baker.
Qatar Airways chief executive Akbar Al Baker.

"There is a lot that can be done to copy or make the hardware very similar these days," he says. "Nearly all airlines these days have fully flat beds in business and similar configurations in economy. What is difficult to copy is the service culture."

Rapid growth in dynamic market

CAPA centre for aviation describes Qatar as having an "innovative strategy in a dynamic region", becoming the first major Gulf carrier to join a global alliance.

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During the past year Qatar has continued to make bold moves, acquiring a 10 per cent equity stake in South America's LATAM and following up its earlier equity stake in IAG by pursuing a joint venture with British Airways.

Qatar has quadrupled in size in the past decade and was now profitable, CAPA says. It is also among the world's largest cargo airlines.

"The attention-getting developments in 2017 centre around Europe. New Zealand will have two ultra-long-haul flights, with Qatar Airways planning a Doha-Auckland non stop, the mere mention of which had provoked Emirates into launching, on a month's notice, Dubai-Auckland non stop," CAPA said.

If we have an opportunity to share and tell customers about something as exciting as the world's longest flight we take it.

Adam Radwanski, Qatar Airways' Australasia senior manager

"Emirates is most at risk, given that Qatar is competing with them head-to-head offering a non-stop service to its Doha hub and onwards to Europe, Middle East and Africa. The Asian carriers are not far behind as their competitive edge of offering one-stop services to cities in Europe via their respective hubs is eroded."

Emirates is not commenting on the direct competition.

A record flight

Qatar Airways Doha-Auckland flight will cover 14,542kms and take between 17 and a half hours and 18 and a half hours. Emirates Dubai-Auckland service started last March: covers 14,200km and takes up to 17 hours and 25 minutes. Until Singapore Airlines resumes its 19-hour flight to New York, it will be the longest flight, by time.

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Radwanski says his airline didn't go looking to fly the longest duration route for the sake of it to get one up on Emirates, but will capitalise on the marketing opportunities it gives.

"We don't build our network to include such records, it just happens here that Doha-Auckland is such a long flight. If we have an opportunity to share and tell customers about something as exciting as the world's longest flight, we take it."

His airline has experience of flying ultra-long flights with some of its US routes more than 16 hours long.

He's got a warning over fares. Qatar doesn't want to be known as a cut-price carrier and he says the promotional fares are temporary.

"At the very beginning we want to present Qatar Airways' value to the customers. Obviously as part of the value proposition pricing is a very critical element. Once we've established our market awareness, certainly you will see less of what we will do now."

Flying by numbers

• 20 years ago Qatar Airways started its global expansion
• $1209: Cheapest return fare to Europe on Qatar - so far
• 190: Aircraft in its fleet
• 5000: Applications in its system every day for cabin crew jobs
• 112: Nationalities among its cabin crew
• $198m: Annual contribution to NZ economy from Qatar's flights

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