AUSPC 2012: Emergence of Aviation in the GCC

21st Annual Arab-US Policymakers Conference – AUSPC 2012
Washington, DC
Thursday, October 25, 2012

THE UNPRECEDENTED EMERGENCE OF THE AVIATION SECTOR IN THE GCC
Introduction:
Mr. Martin A. Bentrott – Vice President – International Sales, Boeing Commercial Airplanes.
Speaker:
Mr. Akbar Al Baker – CEO, Qatar Airways and Doha International Airport.

[Remarks as delivered]

[Dr. John Duke Anthony] The topic that has not been addressed at any of these previous conferences, but is going to be addressed at this one. In the last twenty some years, quarter of a century, Americans have gone some distance away from stereotypical images of the peoples, countries and cultures of the Arab countries, the Middle East and the Islamic world. Where many saw those in the Arab East as not countries but a collectivity of gas stations, where many saw the same countries and peoples as mountains of money rather than as the repositories of an extraordinarily rich culture and civilization from which all of human kind has benefited. And while most Americans are familiar with saying we are the products of the Judeo-Christian heritage this is only two thirds true. We Americans are the products also of the Judeo Christian Islamic heritage and the latter more recent than either of the two former and over a period of 800 years and where we were bequeathed much in the way of traditions and values and norms that have lived on to this day and they have enriched all of human kind.

But one of the ways in which the region has been changing dynamically with the less than adequate attention, acknowledgment and notice has been in the field of aviation and commerce and trade and finance in investment and the degree to which competition and entrepreneurship and risk taking and boldness of vision and courage of leadership that has taken place with three world class airlines, Emirates Airlines, Qatar Airways and Al Ittihad Airways.

If you have flown on any of the three you know what I mean and we have a drawing for two business class tickets at the end of this conference for the airline for which the next speaker is the CEO.

Akbar Al Baker as the CEO of Qatar Airways is the classic quintessential example of someone who has worked her or his way up from inside from 1997 when Qatar Airways had only four aircraft until the present time it flies its aircraft to more than 100 destinations.

For some time I have written the annual essay on Qatar for the Encyclopedia Britannica and each year I try to cite the awards it has won for the previous year and we are literally talking about dozens of first place awards in global competition with all the airlines of the world that Qatar Airways has reaped. Akbar Baker is the CEO of Qatar Airways and for more than six of its subsidiaries. We have asked him to address this revolution in the Arab world having to do with aviation and the connectivity of peoples and cultures that have resulted. Mr. Baker.

[Akbar al Baker] Good morning your Royal Highness Prince Turki Al-Faisal, your excellencies, distinguished guests, members of the media. Thank you to the National Council on US-Arab Relations for inviting me to speak here today. I would like to acknowledge the very important work the Council does in enlightening Americans about the Arab world and promoting expanded economic, political, commercial and defense cooperation between the U.S. and our region.

It is almost impossible to begin any speech about the Arab world today without commenting on the obvious. That this is a time of tremendous transition for many Arab nations. The changes that are taking place provide us with many challenges, it is true.

Qatar and the GCC, the Gulf Cooperation Council, which is the alliance of Saudi Arabia, Kuwait, Qatar, Bahrain, the Sultanate of Oman and the United Arab Emirates, are helping to lead the way for that change.

Qatar was a founding member of the GCC, which represents an extremely dynamic, and growing economic region. In addition to our abundant oil and natural gas resources much of the economic growth taking place in the GCC is fueled by tourism, travel and a meteoric rise of the aviation industry in this region, and in the forefront of this progress is my airline, Qatar Airways.

A confident outlook on the future is directed by Qatar’s instrumental National Vision 2030. In order to achieve true sustainability, innovation is what is behind the force that elevates Qatar’s already progressive stance in the Middle East. We are highly focused and determined to build an economy that balances our most precious national resources with knowledge based business that guarantees the future and diversity of commerce in Qatar.

His Highness the Emir Sheik Hamad bin Khalifa Al Thani, our nations ruler, established four pillars of Qatar’s National Vision 2030, that underscore a broad and encompassing view of Qatar’s bright future in the following areas: economic, social, human resources and environment. Each of these four pillars represent foundations of Qatar’s true vision to build a sustainable world and one which ensures the security and prosperity of Qataris and of course our neighbors.

Investment in research and education are pivotal to these efforts. Our vision creates the social and economic framework today that will boldly shape a strong future for Qatar and the GCC.

Specifically the plan to responsibly cultivate oil and natural gas foster advanced research through the Qatar Science and Technology Park that invests in Qatari’s human resources who will become the entrepreneurs and innovators of tomorrow and to promote social advancement for women of all backgrounds. Qatar’s National Vision 2030 is vital to all companies in Qatar. Collectively we all strive to create an enduring legacy on the basis of this vision.

I am extremely proud of the achievements of my country. I can assure you that Qatar’s National Vision 2030 has meant tremendous economic, political and social progress under the inspirational leadership of His Highness the Emir Sheik Hamad bin Khalifa Al Thani and has brought the State of Qatar into the spotlight. This is also the reason that millions of people have shown interest and desire to learn more about this tiny yet iconic nation, a hub of all sorts, in oil and gas, aviation, Islamic culture and arts and the list continues.

We are a very peaceful nation that views our role as a broker for peace in the Middle East region and it has been a long road to legitimize this role. Qatar is deeply committed to resolving matters of tension within our region. It played a major role during the Arab Spring in pacifying the region, like in Yemen or in Libya.

The state of Qatar is an important gateway in the GCC and we are very welcoming of global visitors and international businesses. For many Americans in fact for many people around the globe when they hear Qatar they think of Qatar Airways and I am very pleased about that as its CEO.

Aviation is a key component of our economic backbone. Qatar Airways has transformed Doha into an international business, and increasingly a tourist, destination. In fact Qatar offers the highest uncompromising standards that foster other vital industries in Qatar particularly the MICE market — meetings, incentives, conferences and exhibitions — as well as tourism.

At Qatar Airways and in Qatar generally we want to nurture a continuation of the regions growth. One of the best ways to accomplish this is to link Doha with as many global gateways as possible. We believe that by being a global connector we act as an enabler, a purveyor of economic growth bringing people and business closer together.

Qatar has been praised for actively promoting positive change in the Arab World. The New York Times Anthony Shadeed called Qatar “the most dynamic Arab country in the turbulent realigning of the region.” Yet it is not just a political alignment and cooperation with global partners that make us so distinctive.

Although the nation of Qatar is geographically smaller than Connecticut as mentioned before we are blessed with abundant natural resources most notably natural gas and oil. We have the third largest natural gas reserve in the world. We have one of the world’s fastest growing economies and the highest GDP per capita income. This is not by accident, Qatar has taken advantage of its own gifts, cultivating its natural resources and becoming a global diplomat.

Qatar and other nations of the GCC also enjoy a very close relationship with your country the United States. We are currently host to two American military bases with more than 10,000 personnel, the US Central Command’s Forward Headquarters and the Combined Air Operations Center. We also have close economic ties. The US is one of the major equipment suppliers for Qatar’s vital oil and gas industry, and US companies have played a major role in the development of Qatar’s oil and gas sector.

And of course Boeing is a major supplier to my airline.

US exports to Qatar include aircraft, machinery, cars and trucks and agricultural products. Hundreds of Qataris study at the US academic institutions every year and several US universities have branch campuses in Qatar namely Georgetown School of Foreign Service, Northwestern, Carnegie Mellon, Texas A&M and Virginia Commonwealth amongst the few.

We look forward to even more US investment in my country as we move forward with a $226 billion national development strategy which is designed to improve infrastructure, real estate and medical development over the next decade and is funded in part from the expanding tourist and conference industry which is made possible again by Qatar Airways.

For me our customers have and always will be a top priority. We stand in stark contrast to the anemic health of other commercial carriers. It seems to me that almost every day newspapers run new articles about commercial airline cutbacks that leave travelers’ with a weakened confidence in the business of airlines that we are increasingly favored by many international travelers.

In Europe the two major airlines, Air France and Lufthansa, have announced reductions to its workforce of more than 6,000 people. Strikes, be it for air traffic controllers or airline staff in Europe, are nearly a daily occurrence. Mergers, acquisitions, consolidations and chapter 11’s these are all common vocabulary in today’s’ aviation tongues. Passengers are left to think about subjects, which they should not have to.

In the Gulf our progressive initiatives have risen above the status quo turning this advantage into great opportunity. We are a financially sound airline and that has made strategic investments that have led to tremendous growth and opportunities. Qatar Airways is very much a pioneer in almost every area of business.

Designing and building the world’s first premium terminal, a stand-alone facility specifically for our premium passengers, building one of the largest green field airports, operating the world’s first commercial flight fueled by gas, being the only Middle Eastern carrier having a five-star ranking, being the Middle East’s launch customer for Boeing 787B Dreamliner, the only Middle Eastern carrier to have engine and electronic training facilities for its engineers right in their hub, a facility run by GE and Talos for IFE which is in-flight entertainment systems. To fly onboard Qatar Airways, if I may boldly say, is to travel in another era. I invite you to enjoy our unsurpassed experience.

In a region where explosive growth in the air industry and airlines who have set the standard for the rest of the world, Qatar Airways is recognized by admission to the completely independent SKYTRAX, the airline industry audit, to be the best of the best. We were awarded for two consecutive years as the best airline in the world by over 18 million passengers, the first airline in over a decade to win this twice in consecutive years.

We are known for our five-star service providing luxury and comfort to all our passengers, a five-star rating which we hold for the last eight years. We are one of the fastest growing and most acclaimed airline in the world. In just a short 15 years we have built a well-deserved reputation as a five-star airline with an unrivaled product offering. Currently we have more than 100 aircraft flying the skies and one of the most modern fleets. To be precise we operate 114 aircraft and our 115th aircraft which is the Boeing 787 Dreamliner will be delivered to us in two weeks.

And of course for the dismay of a lot of American carriers the average age of my airline is just four years and one month. We also have 250 aircraft on order at the list price of over $50 billion which we hope to receive within the next eight years, and at the moment on the average we receive one aircraft every 15 days. Very soon we will be flying one of the most advanced airplanes in the world, this is an aircraft manufactured very proudly by the Americans, the 787 Dreamliner.

Last year Qatar airways and its nearly 20,000 employees carried more than 16 million passengers to more than 100 destinations across six continents. This year when we end our current financial year we are expecting to fly 18.5 million passengers. Keeping in mind there is recession, there is joblessness, there is belt tightening by all the airlines in the world. We are one of the world’s fastest growing airlines as we are on pace to continue that growth by opening up services to destinations as far flung as Maputo in Mozambique and Belgrade in Serbia.

Of all the geographic regions of the world the fastest growing in terms of air travel is, I am proud to say, is the Middle East. Qatar Airways is proud to be at the forefront of this growth and to be a gateway to and from the Middle East. But we not only serve that region, we are a major hub between the East and the West. Every major destination around the globe is now within the reach of a direct flight from the Middle East and this is key. Qatar offers an alternative travel experience compared to the national layover destinations that are increasingly favored by many international travelers.

Qatar Airways made headlines just a few weeks ago following the announcement that we will be joining the One World Alliance. This is a great benefit to passengers that are part of the One World Network since it allows access to an ever-expanding network. Qatar Airways is the first Gulf carrier to join a global alliance, a very proud moment for my country and for my airline.

Because of our dynamic growth the GCC airlines and Qatar Airways is home to the youngest aircraft fleet in the world and is also leading world passenger air traffic growth. Middle East airports, including ours in Doha, are expected to handle over 100 million passengers a year by 2020.

The new Doha International Airport currently under construction will be one of the most cutting edge, advanced airports in the world when it opens next year. As you can see in Qatar we cannot be number two. We always have to be number one.

At present the current Doha International Airport handles 17.9 million passengers last year and we are earmarked to carry over 22 million passengers by the end of December this year. The first phase of the new Doha International Airport will accommodate 28 million passengers a year. So you can already see that on the opening date it will be nearly to capacity. So what we have done is just last month we have made a decision to expand the airport to its ultimate phase, which will then cater to 48 million passengers and this expansion will be complete within the next three years. When all of the improvements are done again we will always be indeed in the number one league of airports.

Of course such extraordinary growth must be managed responsibly and efficiently which is why we are currently working on the worlds biggest energy project in the production of a natural gas based jet fuel. Three years ago in October 2009 I had the opportunity to be on board a Qatar Airways flight from London Gatwick to Doha. It was the first commercial flight to use natural gas in the form of gas to liquids. It was an extraordinary landmark experience. Most people were surprised that the flight was a commercial operation and that secondly, I was on board that aircraft. So the passengers need not worry about flying on this aircraft. Now we are working, let me go back. It is important to note that the Qatar Airways leadership is always leading from the front and not from behind the desk.

Now we are working with our partners Shell, Airbus, Boeing, Qatar Petroleum, Qatar Science and Technology Park and Rolls Royce to develop on a commercial level a GTL that will fuel, that will be the future fuel for the world market. This ultimate source of aviation fuel burns with lower sulfur dioxide, which is a more dangerous global warming gas than CO2, and with nil particulate emissions that conventional jet fuel produces, providing both for economic and environmental benefit.

Despite all of this incredible growth and innovation our goal is not to be the largest airline in the world but to be the best, which we are today and with our solid investment in the GTL project in Doha, in fact Qatar is earmarked to be the GTL capital of the world. We are not only supporting our own environmental initiatives but the entire world’s since the fuel that will be developed in Doha will be available for export. So any airline can utilize GTL fuel supplied from Qatar.

I don’t know how many of you have flown Qatar Airways and I hope a few of you have and that many more of you will do so soon after listening to my speech. So this is also a PR exercise.

We have indeed become an ambassador for the world. I trust that the near term will provide you with the opportunity to experience the exciting climate of hope and promise that now fills our region, to see firsthand that changes we are making for the future of Qatar Airways and the GCC.

Before finishing my speech I would like to praise the achievements of the US government in the aero-political area, which has helped shape aviation to where it is today. The US not only invented but also pioneered the open sky regime. Of course to a lot of you this doesn’t make sense. What does an open sky regime mean? It means complete liberal air services agreements with countries where you can operate in and out of the country with unlimited restrictions, restrictions that Europe is fashioning today. Since the beginning of the ‘90s it never stopped to enumerate the advantages of a liberal environment for the national economy. Unfortunately only a few countries followed the US model, many countries in the world particularly in Europe prefer to protect the interests of their airlines rather than promoting their economies and creating new jobs and using new business opportunities.

You can see that by protectionism they are not helping their airlines, it is making their airlines inefficient, it is making their airlines cost ineffective and of course burdened with labor costs.

Please go on in fighting for the world with open skies. This is good for the customer as well as for the national economies.

Again thank you for your attention and for the opportunity to speak to you today and thank you to the National Council on US-Arab Relations. I sincerely enjoyed speaking to you about topics, which I am very passionate about. Thank you.

[Dr. John Duke Anthony] Thank you Mr. Baker. Listening to him and learning more about Qatar is informative and instructive to everyone and it underscores how one can play an outsized, even global role without regard to its location and without regard to the size of its population and without regard to how new it might be.