Cabin Wars — How Qatar Airways is Changing the Game of Air Travel

In the years to come, American air travelers will experience more diversity and choice, an increase in travel destinations, and a more comfortable air travel experience; and they will largely have Qatar Airways to thank for these improvements. Additionally, these changes have occurred to the chagrin of the Big Three American Carriers — American, Delta, and United. To the average American traveler over the last couple of years, Qatar Airways has represented an unmatched air travel experience, and an ambitious, relatively new airline that has prioritized comfort over cost-cutting measures. However, to the American airline industry Qatar Airways, along with the other airlines of the GCC — Etihad and Emirates — has embodied a complex debate between the value of competition and the role of national autonomy in the airline industry. For years, America’s big three have argued that the big three airlines of the GCC violated America’s Open Skies Agreements, claiming that they received unfair government assistance from their host nations, but these claims were never substantiated with concrete evidence. If the GCC airlines were found to have violated the Open Skies Agreements they could have been barred from flying in and out of the United States, allowing America’s Big Three to retain a nearly unimpeded level of supremacy in the American international air travel industry. However, in 2016, it was found that the GCC’s big three were not in violation, and now their expansion into America can continue unimpeded. Faced with true open market competition, American carriers have begun modifying their business strategies to emulate the success of the GCC’s big three, and especially Qatar Airways, and to re-capture some of the market that has preferred a more pleasant travel experience. In 2016, Qatar Airways was named the “World’s Best Airline for Customer Service” and for years they have continually increased their market share in the US by offering American consumers a more luxurious air travel experience to international destinations. Their strategy ran counter to the conventional wisdom of the American airline industry that had prioritized cost-cutting measures ahead of the consumers’ travel experience with the goal of increasing their profits. Americans might have been saving slightly more money when they traveled, while the airlines furthered their profits, but they were enjoying their experience less. Qatar Airways’ game-changing strategy appeals to an American consumer —those willing to pay more for a more comfortable travel experience — that the American carriers had largely ignored. To remain competitive in this market, which is no longer fixated on squabbling over Open Skies, the American carriers are having to focus more of their attention on this type of American consumer, and rise to the revolutionary level of service being offered by Qatar Airways. When air travelers look to book an international flight, comfort and not cost is often their primary metric and now the new industry battlefield revolves around the creature comforts of an airplane’s cabin and not the Open Skies. This year Delta, United, and American have all announced that they plan on improving their cabins to create a more comfortable experience for their consumers. On December 1, United unveiled their new Polaris Business Class that features seats that fully recline. Delta and American have also created new premium economy class options. Previously the battle was over which companies could cut costs and reduce amenities so that the consumer could save some cash. This strategy might still be effective for domestic flights when the American big three are competing against Southwest Airlines and other low-cost focused airlines, but this strategy is no longer effective for international travel. The duration of an international flight and the residual impacts of jet lag and other aches and pains that may occur due to a long flight means that comfort has become king. Travelers need to have a better idea of how they will feel during their flight, so that they can hopefully avoid these in-flight annoyances that can mar a business trip or vacation. Modifying cabins to appeal to this air travel consumer has become the new focus of the industry. Qatar Airways in response to this strategy shift by the American big three contends that they do not need to modify their cabins or create a new premium economy class because their offerings remain head and shoulders above the rest, but to the surprise of the airline industry Qatar Airways has just announced cabin modifications that may revolutionize air travel. In March of 2017, the airline plans to launch their new Super Business Class suites that will include seats that convert into double beds, and provide the highest level of comfort for an affordable cost. The offerings in Super Business Class will be so substantial that Qatar Airways will do away with First Class on most of their planes. Flights will consist of Economy and Super Business Class, and now Qatar Airways passengers will experience award winning comfort at an affordable cost. To boost this strategy, the airline has also focused on generating promotions such as their “travel together, save together” deal that should make more customers aware of the airline and the top of the line travel experience it provides. Considering that Qatar Airways has just announced an $11 billion deal with Boeing for 40 new planes, and they continue to expand their travel destinations, American travelers will have even more opportunities to travel with this trailblazing airline. Qatar Airways paved the way for luxury cabins, and it is only now that American carriers are trying to catch up. For years, Qatar Airways has had award winning customer service, their seats from Economy to First Class are more spacious and comfortable than their competitors, and the airline’s Oryx One in-flight entertainment system offers up 3,000 entertainment options. Qatar Airways has always focused on putting the passenger’s travel experience first, and this strategy has been revolutionary for the air travel industry. During the height of the Open Skies disagreements Qatar Airways consistently argued they valued fair competition within an open market instead of domestic monopolization of a moderately closed market because this structure stimulates competition, and will better serve consumers. Qatar Airways’ success means that the American carriers now have to play catch up if they want to remain competitive in this market, and that Qatar Airways will continue to innovate and find the best way to serve their customers. This only serves to benefit the American consumer and this was Qatar Airways’ plan all along. By Mohammed Barakat Managing Director, the US-Qatar Business Council