Qatar Airways delivers hard truths at ARC
|Wednesday, 11 July 2012 19:56|
The final panel session, which concluded the 2012 Airline Retail Conference, threw up some contentious topics involving untrustworthy inflight suppliers with unpaid debts.
During today's panel session at the Airline Retail Conference in London - which involved Alex Karasik Manager Onboard Retail, Delta Airline; Sharon Huetson Strategic Partneship Manager Inflight Easyjet; Keith Hunter Senior Vice President Qatar Duty Free and Lars Olsson Head Retail and Onboard Procedures SAS Scandinavian Airlines - audience members were offered the chance to put questions to the speakers.
Towards the end of the session, Stuart McGuire, MD of Scorpio Distributors, expressed the view, that although exhibitions, such as that which took place at ARC 2012, provide buyers with a chance to meet with new suppliers with innovative products, it doesn’t shield them from potentially damaging business partnerships.
“It’s a 3-5 year product cycle from when you first come up with the idea, to when the product is brought onboard, to when it’s sold, to eventually when [the supplier] has to buy [unsold stock] back," said McGuire.
He revealed that, unfortunately, when it’s time for suppliers to buy back their unsold stock, they are unable to pay the fee. “This causes problems for the airline and can also bring down the credibility of some of the other suppliers too.”
[Left: Stuart McGuire wins an award for Scorpio at last year's ARC]
McGuire suggested that suppliers could pay an initial down payment before their products are stocked onboard in order to provide some sort of protection for concessionaires/airlines.
Panelist and Qatar Duty Free VP, Hunter, welcomed McGuire's comments and responded candidly. “I’m actually glad you’ve raised this issue Stuart. [Asking for a down payment] is not something we want to do and we’re not trying to create some sort of money making scheme. This is about protecting us.”
Hunter explained that often suppliers have a false perception of Middle Eastern Airlines: “They think that we have lots of money, and that it doesn’t matter when they don’t pay for returned product. Actually, it does, we are working on a tight budget, believe it or not.”
[Above: From Left: Lars Olsson Head Retail and Onboard Procedures SAS Scandinavian Airlines; Sharon Huetson Strategic Partneship Manager Inflight Easyjet; Amanda Felix, Publisher DFNI; Alex Karasik Manager Onboard Retail, Delta Airline; Keith Hunter Senior Vice President Qatar Duty Free]
Hunter said that Qatar Airways have dealt with a number of companies who struggled to pay for returned product. “And yet we see these same suppliers continuing to peddle their wares to various other airlines and we know exactly what’s going to happen [to other airlines] and actually it’s only by default that you learn that others have been stung by the same suppliers.”
Hunter asked the question, “who do you complain to [about this]? How do you stop this and how do you do it in a professional manner? How do you stop these suppliers from repeating this offence with other airlines? You see these same people spending a lot of money to set up a stand [at these exhibitions] and yet they are using your money, because they haven’t given you [what they owe].”
As a result Qatar Airways says that when dealing with new suppliers they will have to demand a guarantee, of sorts, so that they don’t lose out at the end of the listing cycle.
“And unfortunately that could effect a number of the exhibitors here who may not be able to afford to trade with us and that is a shame. But what can we do?” he asked.
Hunter said that in the last year alone the airline has lost tens of thousands of dollars; a truly appalling state of affairs especially when you consider the current economic uncertainty for the airline industry.
“It’s not acceptable when you’re working with the TFWA, MEDFA, APTRA or whoever it is, that there is no real protection, no board of appeal or board of ethics...[exhibitors] should have to adhere to certain rules or else they will be blacklisted.”
Hunter advocated that the industry publish a list of "bad debters" to try to combat the issue.
But what do you think? Have your say on our Facebook page here.