WHEN the Gulf carriers trumpet a new route, it tends to be one that goes to a major city with an international reputation. The big three—Emirates of Dubai, Etihad of Abu Dhabi and Qatar Airways—usually put on a good show to celebrate new flights to places such as London, New York or Beijing. And so many brows were furrowed when on May 1st Akbar al Baker, Qatar Airways’s chief executive, arrived with his jamboree in Cardiff to make noise about his airline’s first flights to Wales’s capital.
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Why has Qatar Airways just launched flights to Wales?
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Those who know British geography well know that Cardiff is the very opposite of a great metropolis. Although it is the capital of Wales and its biggest city, with just 360,000 inhabitants it is overshadowed by London’s 9m 150 miles to the east. Last year its airport handled less than 1.5m passengers, a fraction of the 8m or so who went via Bristol Airport, its main rival just across the River Severn. Cardiff Airport has struggled commercially in recent years. In 2013 it was bailed-out and nationalised by the Welsh government, making a pre-tax loss of around £5m ($7m) last year.
And so the arrival of the airport’s first long-haul route should excite the patriotic red-dragon within Gulliver, who is part Welsh. But even many of Gulliver’s fellow countrymen admit that the decision is, on the face of it, a bit odd. South Wales is a poor part of Britain, suffering from the long-term decline of its once mighty coal and steel industries. And is not really on the map for international tourism. It is true that there is slightly more underserved demand for business passengers and lots more for cargo at the Welsh capital than there is at Bristol. But why, of all the airports in the world Mr al Baker could chose in the world, is he launching daily flights from Cardiff?
The answer lies in some of the commercial problems that Qatar Airways now faces. Since last June, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed a blockade on Qatar, banning its flag carrier’s jets from their skies. This blockade has forced the airline to cut some 20% of its capacity, in addition to re-routing a number of flights to avoid embargoed airspace. And Emirates and the three big Chinese carriers, all of which are much bigger than Qatar, are dominating the international connections business at primary airports in the world’s biggest cities. And so Mr al Baker wants to focus on secondary airports in out of the way places such as Cardiff to put bums on seats:
Secondary airports is where the business is. As you know, main airports markets have already been saturated and are over capacity and restrictions in slot timings, so the option is to go to secondary airports which have plans and opportunity for growth.
Will this strategy make good money? Mr al Baker says the plans for Qatar in the future are still “growth, growth and growth”. The signs are that the airline is doing anything but. According to Flight Ascend, a consultancy, in 2017 Qatar Airways shrank, instead of grew, its flying schedule. Mr al Baker has already revealed that the airline made a “substantial loss” that year. No wonder he is now shovelling the carrier’s spare investment capital into an array of foreign airline ventures instead of his own operations. Qatar’s arrival in Cardiff may be a sign of desperation, as much as it is growth.
Source: economist
Why has Qatar Airways just launched flights to Wales?