Qatar’s Al Baker Admits to Brinkmanship Leading to 777X Talks

AIN Air Transport Perspective » December 9, 2013
At last month’s Dubai Airshow, Qatar Airways CEO Akbar Al Baker offered insights into some of the machinations and brinkmanship that shape aircraft purchase negotiations.
December 9, 2013, 12:00 PM

Keen to show his airline can operate as a profitable carrier amid assertions that it survives on the largesse of its government benefactors, Qatar Airways CEO Akbar Al Baker offered revealing insights at last month’s Dubai Airshow into some of the internal machinations and brinkmanship that shape aircraft purchase negotiations. The colorful and sometimes controversial Al Baker played coy about his interest in the 777X while fully intending to engage Boeing in serious negotiations that eventually led to a blockbuster sale. In fact, he confessed to feigning disinterest in the airplane in an effort to gain more flexibility from Boeing in the talks, during which his airline partnered for the first time with Emirates Airline to secure a part of the world’s biggest ever single launch order.

During the show, Qatar committed to fifty 777-9Xs worth $18.9 billion, while Emirates committed to 115 of the same model and thirty five 777-8Xs worth $55.6 billion. Meanwhile, Etihad Airways ordered eight 777-8Xs and seventeen 777-9Xs.

“I didn’t want people to report our interest before we had negotiated with Boeing,” said Al Baker. “If you already tell them, give them the information of our interest, they will not be flexible with us.”

Al Baker, who has gained a reputation as a canny negotiator, also said teaming with Emirates increased the Gulf airlines’ leverage. “When you negotiate [like this] with a supplier, you get the benefit of economies of scale. Don’t you think it is good to negotiate with one of your neighboring airlines and order airplanes that are good for employment and industry? This says to the world that we are competitors but we also work together.”

Al Baker said Qatar Airways has engaged in partnerships with Emirates in many fields, including training and engineering. “We are close to Emirates vis-à-vis relationships, both at the management and at the [top] level,” he noted. “This has been a successful negotiation for both. We can exchange technical and performance information, to go to Boeing to address those issues. When we do a similar program in the future, I hope we will be able to do it together.”

Al Baker vigorously denied that national promotion was more important for the airline than profitability. “We are a business and we have to be profitable,” he said. “We don’t get any hand-out from the government or anyone to run this airline.”

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