Aviation

Qatar Airways strives to avoid Etihad’s mistakes

March 10, 2025, 7:59 AM

Qatar Airways' commitment to expansion is evidenced by its recent 25 percent investment in Virgin Australia — Qatar Airways' commitment to expansion is evidenced by its 25% investment in Virgin Australia

Calculated acquisitions
Focus on strategic partners
$1.7bn net profit

Like Etihad before it, Qatar Airways is expanding by buying stakes in other airlines.

The Abu Dhabi carrier’s acquisition strategy ended badly, however. Three airlines in which it invested went bust and it lost $1.87 billion in one year alone in 2016.

Qatar Airways may have better luck, analysts say. The state-owned carrier, which started operations in 1994, acquired a 25 percent stake in Virgin Australia last month.

That added to investments in International Airlines Group (IAG), the parent company of several major airlines including British Airways, Iberia, Aer Lingus and Vueling.

It also owns stakes in Cathay Pacific, Latam Airlines, Air Italy (formerly Meridiana) and Brazil’s Gol.

“Qatar Airways seems to be making a calculated investment in a strong partner rather than repeating Etihad’s past mistakes of bailing out struggling airlines,” Linus Bauer, managing director of Singapore-based aviation consultancy BAA & Partners, told AGBI.

Last year Qatar Airways also bought a 25 percent stake in southern Africa’s independent regional carrier, Airlink.

For its last fiscal year ending March 31, 2024, the carrier posted its strongest financial performance yet with net profits of QAR6.1 billion ($1.7 billion).

That is helping to underpin the carrier’s expansion, not just through acquisition but through aircraft orders and network growth as well.

Chief commercial officer Thierry Antinori told Reuters this week that the Doha-based airline is looking to place an order for more wide-body jets, without providing more details.

The company, which flies to more than 170 destinations, operates a fleet of 227 aircraft, including Airbus A350s and double-decker A380s, and twin-aisle Boeing 777s and 787s.

“The order gets you a space on a production line, with delivery probably not before 2032 given current order books, so that’s just sensible to reserve your place at the table,” said John Grant, a partner at the UK consultancy Midas Aviation and an AGBI columnist.

“If you decide you don’t want them at a later stage then you can always offload the delivery slot to someone else.”

At 2024 delivery rates, the global aerospace industry will need almost 14 years to clear a logjam of outstanding orders, according to the Centre for Aviation. This then makes Qatar Airways’ acquisition strategy more understandable and potentially more successful than rival Etihad, which had to re-trench.

“Rather than chasing scale for the sake of volume, the airline is focusing on premium connectivity, efficiency and strategic partnerships,” said Bauer.

“Unlike when Etihad invested in airlines during a challenging period for global aviation, Qatar Airways is entering a market where travel demand is surging.”