Qatar Executive drives global expansion

Alud Davies
By Alud Davies July 4, 2019 09:00

Qatar Executive drives global expansion

Qatar Executive is ramping up its global expansion plans as it looks for further business opportunities outside of its home country. It recently announced that it would open new sales offices in London, Moscow, and Shanghai, three cities that it says are in the regions that have seen the most growth.

The cities will also act as floating aircraft bases where no individual aircraft will be based but that will still act as a base when aircraft pass through.

From the outside at least, it would seem that Qatar Executive has been forced into rotating aircraft outside of its home country because of the ongoing blockade against the country by its neighbouring countries.

The blockade was put into place without warning overnight in June 2017 when a number of surrounding countries severed diplomatic ties with Qatar over its alleged support of terrorism.

But Ettore Rodaro, executive vice president of Qatar Executive says that whilst the ongoing blockade has had some effect on its business, approximately 70% of its flights take place outside of the region and, so, have been unaffected.

Although Rodaro agrees that part of Qatar Executive’s success outside of its native Qatar is the association with Qatar Airways and its continued 5-star rankings, he also believes it has much to do with the company’s safety culture.

“The name of the company and the association with the airline is clearly a quality label because some wealthy individuals care about who is behind the scenes, who is sustaining the business and what sort of backbone the business has,” says Rodaro. “And this obviously materializes in their imagination of how the aircraft is maintained and what is the safety and quality culture there.”

“From that perspective, we have operated aircraft for over 30 years, and I can tell you that we absolutely do not compromise on anything that touches on safety, quality or our service level,” adds Rodaro. “So, we have an increased focus on that, and that translates into the performance of the flights. And I think that our clients, our customers, those who sit on board, definitely gets a feel for that.”

Part of the quality and service-level enhancement has seen the operator standardise its fleet on just two aircraft types. In October 2014 Qatar Airways announced an order for up to 20 new Gulfstream jets, but in May 2015 it increased the order by a further 10 aircraft.

Up until that point, Qatar Executive had operated an all-Bombardier fleet, made up of Challenger and Global family aircraft.

Although the Gulfstream order did not give specific breakdowns by model types, it did say that it would include the G500, G600, and G650ER. Up until the beginning of July 2019, the operator has taken delivery of six Gulfstream G650ERs and four Gulfstream G500s.

Rodaro says that he is expecting delivery of a further five aircraft before the end of the company’s financial year in March 2020.

The remaining aircraft on order are all likely to be G500s and G650ERs, with Rodaro saying that although Qatar Executive’s name has been mentioned in the press as a G600 customer, he’s not aware of any G600s on order.

“I think for us, have the G650ER and G500 basically satisfies all of our needs,” says Rodaro.

Just because the company is focussing on two different Gulfstream types, for the time being, it does not mean that it will rule out any newer types, if they come along.

With Gulfstream rumored to be working on a larger version of the G650ER, Rodaro says that Qatar Executive would not rule it out from its future fleet plans. “If such a product does come out, then definitely. Qatar Airways is famous for always following the latest and greatest trends,” he says.

But Rodaro does rule out acquiring smaller aircraft, saying that as Qatar Executive is working in a low-margin business, the chances of making a healthy profit on flights is to focus on the long-range market.

And that’s why the company is opening the three new offices globally, with Rodaro saying that more could be opened in time.

Asia -Pacific, and especially southeast Asia, is where the company has seen the most growth in the past year. The decision to open the Asia office in Shanghai was largely driven by the size of the market from the city, but partly due to what Rodaro describes as a ‘bit of a hostile’ environment in China when it comes to owning an aircraft.

The Chinese market is still recovering from the government’s introduction in 2014 of anti-graft measures, designed to crack down on unnecessary spending. Although measures were focussed on government spending, an anti-luxury wave swept across the country. Almost overnight, many charter companies operating in China saw their business cut in half and many aircraft orders were canceled.

Since then, the market had begun to recover, though it has slowed again recently, partly due to economic uncertainty due to the ongoing trade war with the US.

“Whilst the number of aircraft transactions are softening a little bit, I think that’s always a good sign for the charter business because the entry barrier is lower,” says Rodaro. “The commitment barrier is lower as well, as essentially you just pay as you fly.”

Alud Davies
By Alud Davies July 4, 2019 09:00

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