INTERVIEW
Qatar Airways is taking the Nigerian market seriously as evidenced by increased weekly flights to Abuja and Port Harcourt. Hendrik du Preez, Vice President Africa for the airline, tells TODAY the increase is due to his organisation’s confidence in the future expansion of the African market, while stressing the need for governments across Africa to review the cost of doing business in continent .
In early March 2023, Qatar Airways increased weekly flights to Abuja and Port Harcourt from two to three and Abuja-Kano flights from three to four. Could you share some information about the factors that influenced this decision and provide an update on the progress of this project while sharing your experience so far?
Since COVID-19, Qatar Airways has been constantly reassessing its operations, taking every opportunity to scale and expand. Nigeria stands out as one of the countries to recover quickly from the pandemic, evident in the resurgence of the market, causing the increase in flights. As is widely recognized, Lagos, Kano, Port Harcourt and Abuja represent distinct markets, each complementing the others. Growth in these areas prompted Qatar Airways to improve flight frequencies, meeting increased demand and offering expanded capacity to the market.
What are the key challenges facing Qatar Airways in its operations in Africa and Nigeria in particular?
The cost of doing business in Africa is a significant challenge, not only for Qatar Airways but for every airline operating in the region. It significantly exceeds the cost in many other parts of the world. Widespread currency devaluation has further discouraged people from traveling. Another challenge concerns airport infrastructure. However, recent years have witnessed increased investment in the improvement of this sector by many countries. There are new airports opening all over Africa. Nigeria, for example, recently moved to a new terminal in Lagos. Likewise, a new airport in Luanda has opened, reflecting such ongoing developments across the continent.
How would you rate Qatar Airways’ operational performance in Africa in 2023, taking into account factors such as reduced purchasing power, regulations and the impact of inflation on revenues?
This year marks a major shift since the onset of COVID-19, where a return to normalcy is emerging. Pre-COVID trends are re-emerging. there is still obvious limited demand which is reflected in people’s booking behaviour. To address this surge in Africa, we have implemented systems to strengthen our capabilities. During the pandemic, we introduced several new routes and eight destinations, many of which have quickly gained popularity. Despite our efforts to increase production capacity, challenges remain, particularly in Nigeria, where purchasing power remains a constraint amid soaring inflation in various African countries. Currency devaluation has significantly affected many nations, including Nigeria and Egypt. Malawi, notably, devalued its currency by 44% just recently. However, we have learned to maintain an adaptive perspective to these landscape changes, whether it is reducing capacity during certain periods or increasing when we see demand pick up again. It is this flexibility that gives us a great advantage.
Nigeria remains your most connected market. Have the same factors and possibly others affected your business in Nigeria positively or negatively?
Nigeria is one of the top three most populous countries in Africa and is one of the most likely underserved markets before COVID-19. We saw an opportunity to expand our capacity by first increasing our flights to Lagos and then adding the Abuja, Kano and Port Harcourt networks to the list. We can say that this is the most connected market we have in Africa. In Africa, at this stage, our perspective is long-term. We have made huge investments in Nigeria in recent years, and even with the current challenge of inflation that the country constantly faces, we believe that it will pay off in the near future.
Apart from Nigeria, Ghana and Ivory Coast, Qatar Airways’ presence in West Africa appears limited. Is demand perhaps limited to just these three markets?
As previously mentioned, we are consistently evaluating opportunities for expansion into various African markets. Following the introduction of our daily flight to Lagos, we have launched additional routes to Accra and Abidjan during the COVID-19 period. In addition, we have leveraged partnerships with partner airlines that facilitate the transfer of passengers from these markets to our hubs. Although we do not have direct flights to these locations, we do service them by proxy and continue to look at opportunities to open more markets in West Africa, hopefully within the next two years.
Aviation is a fiercely competitive industry with very low profit margins. How does Qatar Airways perceive the competition it faces in its operations in Africa and in particular in Nigerian cities?
Competition is not always negative. It often stimulates more people to fly, with the aim of expanding the air market and giving more people the opportunity to travel. Despite making up about 17% of the world’s population, Africa’s share of the global travel demographic is only 2%. This shows a lot of room for growth on the continent. I maintain my belief that although the African market remains underdeveloped, there are many prospects in the next 5 to 10 years. One of the most significant challenges hindering this growth is the cost of traveling across the value chain. Fuel supply in Africa often proves more expensive compared to many other world regions, increasing the overall cost of operations. Additionally, airport operations in Africa tend to be significantly more expensive than elsewhere. Addressing these issues requires working with governments to reassess regulations and find ways to make travel easier. An increase in travel not only boosts economies, but also helps lower prices.
Who are the typical travelers filling your aircraft, where are they heading to (top cities) and where are the inbounds coming from (top cities)?
To some extent, a change was observed when comparing the last three years to the last 12 months. Travel patterns have gradually returned to pre-COVID conditions. Nigeria, in particular, maintains its traditional travel routes: where the UK remains the top market, London mainly for outbound travel, while the US also ranks high as an outbound market due to visits to friends and family. With the gradual reopening of the Far East, there has been a notable resurgence of traffic, particularly to China and the Middle East. In addition, inbound traffic from China and Asia – particularly India – has grown significantly, alongside intra-African travel. The dominant routes within Africa are seen between Lagos and Johannesburg, mainly facilitated by travelers coming via Doha for flights to and from Johannesburg. The primary movement is often associated with diaspora communities worldwide and with students returning to their respective schools, mostly in the US.
Seeing how football in general contributed to the influx of Africans to Doha during the last FIFA World Cup in Qatar 2022, do you think there is a possibility of working with AFCON to enjoy similar feats?
The renewed partnership will include FIFA 26 World Cup, FIFA Women’s World Cup 2027 and FIFA World Cup 2030, as well as youth tournaments starting with the recently held FIFA U-17 World Cup in Indonesia. Qatar Airways has been a Premier Partner of FIFA since 2017. More recently, we have renewed our partnership, extending it to 2030. As a Global Airline Partner of FIFA, this agreement extends to the FIFA World Cup 26, the FIFA Women’s World Cup 2027 and FIFA World Cup 2030, as well as youth tournaments starting with the FIFA U-17 World Cup in Indonesia.
This clearly puts football at the forefront of our focus. During the FIFA Women’s World Cup in Australia, we facilitated the transport of several women’s teams. Our close partnership with various football associations across Africa allows us to assist them with their travel needs. Drawing on our extensive experience with sports travelers, we aim to ensure that the travel arrangements for each of our partner groups are seamless. Our expertise in facilitating travel for professional athletes around the world is extensive and we hope to apply this experience to the AFCON as well. Globally, we have made significant investments in sports sponsorship. Our flagships include F1 in Africa and our rugby sponsorship with URC.
The aviation industry is evolving rapidly, with emerging technologies and, most importantly, changing customer expectations. How is Qatar Airways adapting to these changes?
This is quite a far-fetched question, considering the rapid pace of developments, particularly in the field of artificial intelligence. In recent years, there has been considerable debate surrounding artificial intelligence, with its prevalence intensifying recently. Machine learning, among other technologies, has been seamlessly integrated into our operations, albeit subtly, improving the customer journey. For example, the application of biometrics to streamline check-in facilities is an example of the use of these developments. The credibility of these technologies depends on their widespread adoption by most countries, taking into account the legislative framework required for universal acceptance. We are currently moving quickly to implement NDC (New Distribution Capability). This facilitates an easier shopping experience for our customers, a development we are actively pursuing. I have long believed that one of Africa’s most important opportunities lies in mobile technology.