Coming Soon: Qatar EU Open Skies

Qatar and the European Union have been negotiating on a “comprehensive air services agreement” for the past many years, and they have now completed their negotiations. This would be an exciting win for Qatar, as once this agreement is signed off, Qatar Airways should be able to fly anywhere in the 28-country EU bloc, and similarly, any European airline should be able to fly to Qatar. It would be the first-ever agreement between the EU and a GCC member state.

Qatar Airways currently operates on the basis of bilateral agreements with each EU country, which means there is a cap in place on the number of passengers which can be carried. Similar limits apply to other ME3 rivals such as Emirates and Etihad Airways. This means Qatar Airways should be able to mount more flights, and scale them up or down depending on demand and supply, and hence get a larger share of the transfer business between Asia/Pacific and Europe.

Qatar EU Air Services Agreement

The draft agreement, which was in the works for more than eight years, was closed on February 5, 2019. It will soon be put to the process of consent from individual nations of the EU bloc. It will take a few months to finalise the agreement.

As part of this Qatar EU Air Services agreement, Qatar and the EU have agreed to articles on fair competition, consumer protection and transparency. Not just that, EU carriers will be relieved from the obligation to hire a local GSA to do business in Qatar.

This agreement benefits Qatar a lot since with additional flights, Qatar Airways will be able to benefit with providing more differentiated network across Europe. On the other hand, even when airlines will fly to Qatar, it helps them get economic benefit from the tourism and business it generates, and a group company of Qatar Airways also owns the airport.

The EU will also start negotiations on a similar agreement with Oman next month, in March. Talks on a similar agreement between the EU and Oman will get underway in March. The EU is also talking to ASEAN and Turkey at the moment.

Bottomline

As customer preferences change to avoid unnecessary transit, this agreement should enable Qatar Airways to get more connectivity across Europe, and hence win the long term battle with their regional neighbours, as the UAE has apparently refused to negotiate a similar deal with EU and will prefer to talk to countries on a 1-1 basis.
Also, with the World Cup 2022 in sight, this helps a lot in terms of establishing a presence on the ground for one of the most significant sports events in the world, which would need a lot of air travel.
What do you make of this new agreement between Qatar and the EU?

Comments

  1. the main issue is that QR controls the airport in Doha and restricts the landing and departure times at DOH for non-partner airlines, making the competitors unprofitable by forcing them to fly on very inconvenient times like 4AM in the morning etc. Look at Tk, Pegasus. They forced out LH and KLM but they partnered with BA and as soon as the joint venture with BA started, they allowed BA to fly in the morning time (the time departure for london flights). Why does QR do that? It is very protective of own market so they can charge notorious prices from direct flights out of Doha. Doha to Europe round trip would cost over 1000USD but EU to Doha for the same flights would cost 2/3 of it but if it is EU to Asia, it’s less than a half when you add the leg to asia…Will this agreement change QR’s anti-competitive behaviors at their homebase?

    • @ken we have to see the text of the deal before we can comment on the nuances, but there is a fair competition clause, and I would like to believe that Qatar will give some and get some. As for the ticket prices, well, that is true for all market and ticket prices are usually determined by how much the airline thinks the market can pay. I know of NRIs who come back to Mumbai for their Emirates journeys to the USA because it costs more to start the journey from Dubai.

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