Yesterday in part one of my discussion with Qatar Airways Senior VP of the America Tony Hughes, we were just getting warmed up. Today in part two, we get right into the meaty issues of codesharing and competition.

Cranky: Middle Eastern carriers tend to avoid traditional alliances, what is your stand on alliances? Codesharing?
Tony: Two things really. Codeshare: whatever makes business sense to us, we will work with. We have a strong relationship with United in the USA. We codeshare on New York and Washington. We codeshare with US Airways out of Houston but those are one-to-one business relationships. The alliance strategy, I can’t really comment on, because that’s our CEO’s prerogative.

Cranky: Are you pretty happy with the feed you’re getting in the US from United and US Airways? Are you looking for more?
Tony: The day we go out with full flights every day of the year, we’ll be happy with the feed. One of the issues we have in the US is the Fly America Act [where US government travelers have to buy tickets on US-based airlines]. In Washington in particular, we carry a lot of government and military business. So the United codeshare does mean those passengers can travel on us with a United ticket. So that’s good. And the passengers are pretty pleased they can do that.

Cranky: Washington is obviously a lot of government. New York is a lot of everything.
Tony: Yeah, it’s New York. We get a lot of business. We also carry a lot of ethnic traffic. About 80% of all our business connects beyond to somewhere else.

Cranky: Really?
Tony: Yeah, the big premise of Doha is as a hub and spoke, so that’s what we do. We have this very famous premium terminal for Business and First. It’s like being in a five star hotel. That’s what we’re geared up to do.

Cranky: Another thing that may surprise people is the Houston connection. Qatar has a lot of natural gas, right?
Tony: Yes, second largest supply in the world.

Cranky: Is that primarily what the Houston flight is doing?
Tony: That was the key premise. Very much so. We carry a lot of business for the main oil companies and affiliated industries. But again, we carry traffic from the West Coast, even from Canada, and again we have some ethnic business. We have a lot of medical tourism becase of the big medical center in Houston.

Cranky: Let me go back to Emirates and Etihad for a second. Emirates is in Houston, New York. Eighty percent of your traffic is connecting so you’re not necessarily selling on the nonstop flight. If you could explain how you compete with them – what’s your selling point?
Tony: Like any business, there’s no blue ocean space around anymore. For us, our biggest competitors are not just Etihad and Emirates. We compete with Lufthansa, British Airways, Air France, KLM , who have pretty extensive networks. The value proposition we have is that for one, we offer excellent serice. All our flights from the States are ultra long haul. Our shortest flight to the States is 12 1/2 hours. So obviously we are very good at that.

We have to offer the customer more space. If you take the 777s, all airlines in economy have 3-4-3 configuration and we have 3-3-3, so we have a whole row of seats not there so that makes a difference. Our business class space is huge. So all the ingredients for long haul flying have to be there. That’s a big hook. The other thing is depending on where you’re going, you can do a one stop service with us that might require 2 stops on another carrier.

Thirdly, the terminal proposition. I’m a Brit with good ole’ Heathrow and everything. But Frankfurt and Heathrow in particular can be tough for transfers. Doha is quick. It’ll be better with the new airport which will open in about 18 months.

Cranky: Wait, in Doha there’s a new airport?
Tony: Yeah, there will be. It’ll be the most modern airport in the world.

Cranky: Is it just a new terminal or a greenfield site? I suppose it wouldn’t be greenfield but maybe brownfield.
Tony: No, it’s a brand new airport built on reclaimed land about 4km from the current airport.
Cranky: I’ll have to get more info on that.

And that I will, once I have time. The new airport looks to be absolutely massive and only a couple miles from the current one. Thanks to Tony for taking the time to chat.

I had the chance to speak with Qatar Airways’ Tony Hughes recently and had a fascinating conversation. Tony is the Senior VP for the Americas, so he runs the show here in the western hemisphere.

I started with most basic question – how do you pronounce the name of the airline (and country)? Then we dove into a wide-ranging discussion on performance of US markets, codesharing, and competition with other airlines. I’ve split it up into two parts. Today we talk about Qatar itself along with the airlines from states in the Emirates. Unless something earth-shattering happens tomorrow, I’ll run part two then.

Cranky: Let me ask the one question that everyone wants to know. How do you pronounce the name of the company and the country?
Tony Hughes, Senior VP Americas: Well you know you’re absolutely right. When we started in the States, we ran a series of adverts saying how do you pronounce Q-a-t-a-r? Now, I’m English so we would say ka-TAR. In the States, they say, KA-ter. In other words, I don’t really have a good answer.

Cranky: So really, call it whatever we want as long as we buy a ticket?
Tony: Exactly! One of the interesting things for us is obviously Qatar as a country is not particularly well-known by the general public whereas Dubai is a destination. So we have that side – not only do we have to get the name over, we also have to get the country over.

Cranky: I think for a lot of people, when they think of Qatar, it’s instantly tied in with some negative thoughts, even if there isn’t as much of that in the country, it’s the region in general.
Tony: Yeah, there is an element of that. Once people actually know that the US Central Command is based in Qatar and we have six American university campuses in Doha . . . but of course, how do you get that message over? The reality is, not belittling the issues, if you actually go to Qatar walking around the streets you’re safer than in Washington. But I understand what you’re saying.

Cranky: Yeah, general perception.

Tony: I think, as you know, we are one of 5 or 6 airlines that are rated five star by Skytrax. We’re an international world class airline, not just an Arab carrier.

Cranky: Yeah, although, you may not just be another air carrier, but you are competing with other airlines that have that same reputation, Emirates and Etihad.
Tony: They’re 4 star.

Cranky: Oh yeah? Well, they still have that reputation for Americans.
Tony: And I would not sit here and say they’re not good.

Cranky: And that’s where all the growth is coming, in that region.
Tony: I think two reasons. One is the geographical location. The age of long haul jets has literally made that part of the world the crossroads between East, West, North, South. And secondly, the capital investment that’s been available there is quite spectacular.

Cranky: In Qatar, it’s obviously not growing as the same extent as Dubai has been, right?
Tony: No. I mean, in world terms it’s exceptional. It is growing, has an area full of splendid modern office buildings going up. It has its own floating island, the Pearl. There is a lot of investment but far more conservative than Dubai.

Cranky: Let’s talk more about the US market since that’s your domain. You have what, Houston, New York, and Washington?
Tony: Yeah, daily 777s from each destination.

Cranky: When you look at the US market, are you still looking to expand? Or are you looking to solidify your position?
Tony: Yes and yes. The company has quite clearly stated expansion plans and aircraft orders. Some orders are to replace existing aircraft because it’s the company’s objective to have one of the most modern fleets in the world, and the rest are to expand. We don’t have any immediate plans to bring another service to the States. I’m sure at some stage we will, but we’re reviewing all the time.

Tomorrow, I’ll have part two of the interview. We’ll talk about codesharing and competition.