WHEN Gulf carriers trumpet a new route, it’s likely to be one to a major city of international repute. The big three – Emirates from Dubai, Etihad from Abu Dhabi and Qatar Airways – usually organize a good show to celebrate new flights to places like London, New York or Beijing. And so many eyebrows were raised when Qatar Airways chief executive Akbar al Baker arrived on May 1 with his Cardiff jamboree to announce his first flights to the Welsh capital .
Those familiar with British geography know that Cardiff is very different from a big city. Although it is the capital of Wales and the largest city, with only 360,000 inhabitants it is overshadowed by London 9m 150 miles to the east. Last year its airport handled fewer than 1.5m passengers, a fraction of the 8m or so that went through Bristol Airport, its main rival just across the River Severn. Cardiff Airport has struggled commercially in recent years. In 2013 it was spun off and nationalized by the Welsh government, making a pre-tax loss of around £5m ($7m) last year.
And so the arrival of the first long-haul at the airport should stimulate the lovable red dragon inside Gulliver, who is part Welsh. But even many of Gulliver’s countrymen admit that the conclusion is, on the face of it, a little strange. South Wales is a poor part of Britain, suffering from the long-term decline of the once powerful coal and steel industries. And it’s not really on the map for international tourism. It is true that there is slightly less demand for business travelers and much more for goods in the capital of Wales than in Bristol. But why, of all the airports in the world that Mr. al Baker could choose in the world, does he launch every day 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 an embargo on Qatar, banning the flag carrier’s jets from their skies. This restriction has forced the airline to cut around 20% of its capacity, as well as rerouting several flights to avoid embargoed airspace. And Emirates and the big three Chinese carriers, all of which are much bigger than Qatar, dominate the international connections business at major airports in the world’s biggest cities. And so Mr al Baker wants to focus on secondary airports outside of places like Cardiff to put bumps on seats:
Secondary airports are where the business is. As you know, the markets of primary airports have already been saturated and are above capacity and restrictions in slot times, so the option to go to secondary airports at have plans and opportunity for growth.
Will this strategy make good money? Mr al Baker says the future plans for Qatar remain “growth, growth and growth”. The signs are that the airline is doing anything but. According to Flight Ascend, a consultancy, in 2017 Qatar Airways moved, instead of growing, its flight schedule. Mr al Baker has already stated that the airline made a “big loss” that year. No wonder it is now funneling the carrier’s surplus investment capital into a number of foreign airline ventures instead of its own operations. Qatar’s arrival in Cardiff is perhaps a sign of desperation, as much as growth.
