x Abu Dhabi, UAESaturday 22 July 2017

Qatar Airways to join Oneworld global airline alliance

Qatar Airways is to join the Oneworld global airline alliance, which includes American Airlines, British Airways and nine other carriers, in a move that underlines a major shift in focus in the global airline industry towards the Middle East.

Qatar Airways is the first major Gulf carrier to join a global airline alliance. Kamran Jebreili / AP Photo
Qatar Airways is the first major Gulf carrier to join a global airline alliance. Kamran Jebreili / AP Photo

Qatar Airways is to join the Oneworld global airline alliance, which includes American Airlines, British Airways and nine other carriers, in a move that underlines a major shift in focus in the global industry towards the Middle East.

The Doha carrier made the announcement the day after fellow Arabian Gulf carrier Etihad Airways said it was signing a 10-year "major strategic agreement" with Air France-KLM, and mere weeks after Emirates and Qantas fixed their cooperation deal.

In effect, the three Gulf carriers have shaken up the airline industry by using the geographical position of their hubs and new long-haul jets to move passengers between Europe, Asia and Africa, more cheaply and with greater ease, and in the process are taking share from established global carriers.

"Alliances are playing an increasingly important role in the airline industry today - and that will continue long into the future," said Akbar Al Baker, the Qatar Airways chief executive. "Qatar Airways has carefully reviewed its strategic options and it is very clear that joining Oneworld is by far the best way forward for us as we look to strengthen our competitive offering and give passengers what they fully deserve - more choice."

The airline's pending membership with Oneworld gives the global alliance access to emerging markets, particularly in Africa, and its members a presence at a new airport in Doha, which Oneworld believes is one of the primary gateways in the Middle East.

Speaking at the formal announcement of Qatar's designation in New York, Oneworld's chief executive Bruce Ashby said in joining the alliance Qatar would increase its market share in the Middle East to 10 per cent from 4 per cent.

With Oneworld membership, which should be completed in 12 to 18 months, Qatar will become the first major Gulf carrier to join a global alliance.

"We are only 15 years old, so this was a fast step and a good step," Mr Al Baker said. "It is a sign that the world is taking the Gulf carriers seriously."

The industry finds itself in new territory, according to Capa, the aviation analyst. "The deals are individually a tremendous outcome, both for the network benefits and ideological change that had to occur. They amount to a reordering."

Until recently, the Gulf carriers had been targets for the European airlines, who accused them of uncompetitive practices and benefiting from government subsidy, and Air France-KLM, now a partner with Etihad, led the charge.

"The Gulf companies are killing our industry," said Jean-Cyril Spinetta,chief executive of the Air France-KLM group, last year. The former Air France-KLM chief executive Pierre-Henri Gourgeon, also said last year that Europe was "at the crossroads of international air travel, and this is a role we need to value and defend," as he hit out at what he called the Gulf carriers' predatory practices.

"Mr Gourgeon's words still hold, and indeed are being practised by Air France-KLM today, but the context has changed," said Capa.

"Air France-KLM tried to beat them, but now must join them, which makes its new arrangement with Etihad, which goes well beyond code-sharing, significantly deep at the ideological level." Qatar Airways, Emirates Airline and Etihad have hundreds of new aircraft on order and have been expanding their networks to the Americas and Africa, often attracting the ire of competitors.

This is something the old legacy carriers have to accept if they are to survive, according to Willie Walsh, chief executive of the British Airways parent International Airlines Group, a Oneworld member.

As the major airline corridors now swing towards the Gulf hubs, he believes the rest of the world needs to take advantage of the quid pro quo the Gulf carriers offer - an offer to share in success.

"Many of my European counterparts will complain about the way the Middle East carriers operate; they think that it is unfair competition. I don't buy into that. Indeed, not everyone will benefit to the same degree," he said.

"But I think that's a change in attitude, where in the past we've missed opportunities because we've been focused on everyone benefiting equally. You can't do that in the world today."

"There's an old saying," added Dominique Patry, Air France-KLM's vice president for international affairs and alliances. "If you can't beat them, join them."

dblack@thenational.ae