Qatar Airways expansion into Iran

In a move that few saw coming, it was announced this week that Qatar Airways had been granted 9th freedom permissions to fly domestic air routes within Iran. Iran – it seems – has found a silver bullet to its domestic air travel woes and Qatar Airways have blown the doors off a new market. At this stage little is known about these future domestic operations. What is clear from Qatar Airways’ announced schedule changes is that they have grand plans for Iran.

So far the following changes are set to take effect:

Qatar Airways themselves are billing this as a 150% capacity increase into Iran – massive no matter how you spin it. While we wait to see what comes of the domestic operations we can say that Doha has become to Iran what Incheon has become Japan – a domestic hub overseas.

Qatar Airways Boeing 777-300ER loading up in Doha. Photo by Felix Triller

Last week Qatar and Canada inked an air transport agreement that will allow carriers from each country to serve the other. Apparently. I say apparently because there has been precious little coverage of this in the Canadian media and no official Canadian government website (at the time of writing) has any information about this.

In the wake of the protracted Canada-UAE bilateral saga, speculation was rife that Canada would give Qatar a much more generous allocation than normal. That did not happen. According to the Qatar News Agency the freshly signed agreement will allow Qatar Airways to operate three passenger flights a week as well as three cargo flights. Speculation now shifts to when and where Qatar will land on Canadian soil. There will be speculation that Calgary, Vancouver, Montreal and Toronto are all in with a shout for passenger service but the smart money – or my money at least – is on Toronto. Given its demographics, commercial strength and large foreign born population it is the easiest win.

With the destination (more than likely) settled it becomes an issue of when Canada could be added. To get the most utility out of the three frequencies, Qatar Airways would have to assign one of their biggest widebody types to the route. A quick scan of their fleet quickly narrows things down. Their A330-300′s don’t have the legs, the A340-600′s are on their way to Aerolineas Argentinas and the 777-200LR’s are fully assigned. This leaves the 777-300ERs but even they don’t appear to have much operational slack. This means that Qatar Airways would either have to cannibalize a pair of 77Ws from an existing route or wait till a couple of additional frames come online. If the latter approach is taken, this route would have to wait till early next year as they will not have enough 77W’s till then. Either way I look forward to seeing them at YYZ.

Needless to say the existence of many routes operating in and out of Africa are steeped in historical ties – Air France for instance is very strong in West Africa. However, such historical ties are only a small factor in the broader picture. The formation of global airline alliances, armed conflicts, the discovery of natural resources and a host of other factors make the picture far more complex.

If we compare the footprints of the alliances side-by-side we can see that the Star Alliance has the broadest reach. Notice in particular how the major centers that dot the coast of the continent are well served.

Not far behind the Star Alliance is SkyTeam. Air France and KLM’s long history in Africa coupled with Kenya Airways’ growth and success are the major factors behind this second place.

This leaves OneWorld in third but not by much.

Let’s not ignore non-alliance players. The collective presence Emirates, Qatar Airways and Etihad put forward is no longer negligible. You might argue that the gulf trio only affords three non-stop destinations outside Africa – Dubai, Doha and Abu Dhabi – but I would argue that one-stops at the right price are just as good or better than direct services.

With Ethiopian set to join the Star Alliance shortly, the list of African carriers ready to be rolled into major alliances drops to zero – either for lack of quality or lack of size. A lack of carriers however does not mean a lack a opportunities. The difference now is that anyone who wants a piece of the action will have to really put some skin in the game, not simply agree to a codeshare. Brussels Airlines is already doing this by setting up an operation in Lubumbashi (to be called Korongo) but they will not be the last. Numerous European and Middle Eastern carriers have half an eye on such joint ventures as do the new darlings of African politicians - the Chinese and the Indians.

Qatar Airways 77L (A7-BBD) at Boeing Field by Andrew W. Sieber

Effective May 30th, 2010 Qatar Airways will begin service to South America offering a daily Doha – São Paulo – Buenos Aires service to be operated with a 77L. They will become only the third airline ever to offer non-stop service to six continents from a single hub. The current members of the Six Continent Club are South African Airways and Emirates who serve six continents from their Johannesburg and Dubai hubs respectively.

Qatar Airways is often accused of aping Emirates. In this instance I think they have one-upped them. Unlike their Gulf cousins QR’s service will continue on to EZE from GRU with full 5th freedom traffic rights. A smart move considering it tests the market for EZE-DOH direct (which the ridiculously capable 77L can handle) and maximizes utilization of the 77L fleet. Indications are that EK did not pursue the GRU-EZE leg as it would have meant a less desirable departure time. This type of paired expansion is not new to QR. When getting their feet wet in Africa they took a similar approach initially serving Cape Town via Johannesburg. After establishing themselves in those markets and proving demand existed both cities were upgraded. A certain Emirati carrier followed suit

This all begs the question, who will be the next member of this elite club? A number of other airlines already serve six continents but from different hubs and with stops. Off the top of my head British Airways, United, Malaysia Airlines and Air France are in the mix but for reasons of equipment, bilateral agreements and other complications I don’t believe any of these four will be the next. My pick is Etihad. The reasons are simple. They have a similar business model to EK and QR, they have capable aircraft on order and they have a strong desire to not be an also-ran in the arena of Gulf aviation. Time will tell.