Qatar Airways Has Braved The Fall of the Aviation Industry, Emerging As A Resilient Leader. Here's How

In recent years, the global aviation industry has taken blow after blow: closing borders during COVID-19, consumer concerns around sustainability, skyrocketing fuel prices caused by international conflict and more. These monumental challenges have shaken the foundations of an industry that has largely seen constancy since the dawn of commercial aviation. Yet, among these challenges, Qatar Airways has proven itself to be the most resilient, emerging as a global industry leader. 

Being awarded 3 of the last 4 prestigious SKYTRAX Airline of the Year Awards, it is clear that the company provides an unrivaled passenger experience. However, their service and cabins are not the only areas where the airline thrives. They have also recently been excelling financially. In July of 2024, Qatar Airways posted record profits of $1.7 billion USD. During this same period, they grew their network to 170 destinations, and carried over 40 million passengers - a 26% increase when compared to 2023. How has the airline managed the thrive in this difficult era?

The airline is state-owned,so the Qatari government provides help in expanding and stabilizing the company. In 2020, as a result of COVID-19 and international challenges, Qatar Airways was facing its most difficult period in history. Annual losses were around 7 billion Qatari Riyal, and exceeded 50% of share capital. To aid the airline's recovery, the Qatari government provided 7.3 billion riyal ($1.95 billion) in funding to keep the company afloat. This bailout package was vital in ensuring the airline survived the significant hardships, causing revenue to increase by 6.5% to 51.1 million riyal and Passengers Carried by 10% to 32.4 million. The Qatari government's intervention allowed the airline to expand even during a global pandemic, helping it establish its position as a industry leader, with a privilege lacked by competitors. This financial backing continues to provide stability to the airline, allowing Qatar to make strategic investments with minimal risk while ensuring the resilience of the airline. The group recently acquired a 49% stake in RwandAir, and a 25% stake in Virgin Australia holdings, facilitating expansion into Africa and the Asia Pacific region. 

Secondly, the airline's hub in Doha maintains a strategic location. Geographically, Qatar acts as a connector between Europe, Asia and Africa from its central location, making it an ideal connector in flight paths. Upon realizing that using Qatar itself as a tourist destination was insufficient to attract a sufficient volume of passengers, the airline shifted its focus, instead transforming Doha airport into a hub for connections, rather than a final destination. In 2014, the Hamad International Airport opened with a shiny new veneer, featuring duty-free luxury brands and much larger volume than its predecessor, the Doha International Airport. Through consistently expanding their route network, Qatar Airways connected airports from all corners of the globe, positioning the airline as a convenient and preferred carrier for many travelers. This strategy is known as the hub-and-spoke model, and has been transformational for their recent growth. By operating through a centralized hub, Qatar Airways reduces their operational costs, and aids resilience against changing travel patterns and regional disruptions. 

The last factor which has led to the success of their business model is the diversification of their business operations. Alongside their highly successful commercial offering, Qatar Airways also is also an established cargo carrier and private jet charter. Qatar Airways Cargo is the worlds primary air cargo carrier, with a 7.1% market share. Their focus on digitalization and sustainability makes them an increasingly attractive option in transporting goods. This branch is not only helpful as it brings in vital revenue for the airline, but this branch was also crucially resilient and lucrative when passenger travel has been down. This has prevented Qatar Airway's profits from dipping, unlike other airlines. 

Additionally, Qatar Executive, the private jet chartering branch, has also continued to deliver consistent business performance - over the 2023 - 24 fiscal year, Qatar Executive saw an increase in commercial charter revenue of more than 17%. As the only commercial airline in the world with a fully integrated business jet brand, it is clear how Qatar's innovation and novel approaches been instrumental to their success. 

Qatar airways seems poised to continue on its upwards trajectory. They have plans to expand their fleet with both Boeing and Airbus planes, allowing them to carry up to 30 million more passengers annually. This expansion will be carried out over the next 6 years, until Doha Hamad Airport reaches full capacity. The CEO seems to also remains committed to delivering an unparalleled level of service, and refuses to let this growth come at the cost of passenger experience. Badr Mohammed Al-Meer, CEO of Qatar Airways group, stated that “many competitors inside the region and outside . . . the quality of the service has deteriorated and people are not getting what they’re paying for”. Maintaining their quality is where the airline's advantage lies. 

Overall, with a strategic investments and a uniquely robust financial position, all while Qatar continues to provide high-quality passenger experience, Qatar is well-positioned to continue to remain an industry leader. By leveraging its strong brand presence, expanding its market reach, and maintaining operational efficiency, the airline can continue to set new benchmarks for excellence.