Qatar Air Targets Investments in Airlines Amid Expansion Strains

Qatar Airways Chief Executive Officer Akbar Al Baker said he intends to make more investments in other airlines this year as the No. 2 Gulf carrier seeks opportunities to expand.

“We are looking at many airlines,”Al Baker said on Thursday in an interview at the Bahrain Air Show, declining to identify potential targets. “Either they will be successful airlines or they will be airlines where we see there is high potential and that potential is not being properly exercised.”

The state-owned airline bought a 10 percent stake in British Airways’ parent IAG SA last year, and adding more investments would bring it closer to a strategy pursued by Etihad Airways, the Abu Dhabi flag carrier that’s snapped up equity holdings in carriers from Air Berlin to Air Seychelles. Airlines in the Persian Gulf have used their favorable geographic position at the crossroads of global flight paths, building giant transfer hubs that connect passengers between Asia and Europe and the U.S. with just one stop over in the Gulf.

At the same time, the airlines face potential limitations to their growth plans as the U.S. and some European carriers seeks to rein in their expansion. Al Baker has threatened to form a splinter group within the Oneworld alliance. Qatar Air had previously said it was considering an investment in Royal Air Maroc and had expressed interest in increasing its IAG stake after making the initial investment.

The Gulf carrier was scheduled to take delivery of the first Airbus A320neo by the end of last year but has faced delays due to shortcomings of the engines, Al Baker said, citing issues with performance in the region’s high temperatures. Deutsche Lufthansa AG in the meantime became the first carrier to receive the Airbus plane, taking delivery this week.

“We need an engine that will withstand this rigorous climate conditions,” Al Baker said, adding that it will be several more months before Qatar Air gets its first A320neo. “It’s extremely important for us to take delivery of this airplane because we’re short of capacity.”

In a bid to offset the impact, Qatar Air will add ultra-long haul routes with new flights to Chile’s capital Santiago and Auckland in New Zealand using Boeing Co.’s 777-LR aircraft. The airline will also deploy Airbus A350s on more routes this year including Phuket, Marrakesh and Lisbon, Al Baker said.

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