A huge quality leap for Qatar Duty Free

By Doug Newhouse |


Qatar Airways CEO, H.E. Akbar Al Baker talks to Doug Newhouse in Doha about resetting the Middle East quality bar at Hamad International Airport.

 

Qatar Airways CEO Akbar Al Baker predicted long ago that Hamad International Airport would set a new global standard when it opened and it has, but he says there is still plenty of work ahead to finish the huge facility, which is aiming to be the best airport in the region – not the biggest.

At 22 square kilometres, Hamad International Airport is one-third the size of Qatar’s capital city Doha and the second largest airport in the Middle East in size and duty free retail sales turnover.

The iconic structure, which has taken nine years and cost $15.5bn to reach its first opening phase is also very much the vision of the straight talking Al Baker, who is also the CEO of Qatar Duty Free.

The formidable character has certainly earned his reputation for forthright views, having masterminded the take off and growth of Qatar Airways from nothing to become the region’s second largest carrier since he became CEO in 1997.

 

 

An evening view of the very impressive Hamad International Airport which is a third of the size of the city of Doha.

 

He is no less passionate about the new dual-runway airport with its initial capacity for 30m passengers a year, which will rise to 50m beyond 2015. But he frankly admits that successive delays in opening the new airport have proved very challenging and very costly, as he explained: “It has been frustrating because this impeded the growth of our businesses by as much as three years.

“So we are really behind our plans that we had where we have to be today [of] three years ago and we are only starting it now, which means it has created a huge negative impact on the company.”

Having said that, Al Baker says that he is fairly satisfied with the progress the airport has been able to make, despite these delays: “If you look at what we have today it is really something not available in any other airport, so this shows that although we waited that long, we are now getting the results. It is not worth the wait, but at least we have that.”

Frustrated though he clearly has been, Al Baker acknowledged that it is the bigger picture that really matters rather than choosing this or that aspect of the offer as a highlight.

“Well as a business it is all a highlight for us because as a company we provide something for every level of passenger. So we cannot pick and choose which is our favourite and which is not.

 

 

The congestion long associated with the old Doha International Airport is now long gone, with Hamad International now one of the largest airports in the Middle East, although this was never a central aim of management. [Above: QDF P&C; QDF’s self-created and lively children’s concept called the Bumble tree; plus high fashion (bottom left) and Marmalade Market (bottom right) featuring gourmet food gifts, Arab specialities, tea and coffee; biscuits, chocolates etc].

 

 

“As a company we need to make sure that everywhere we attract passengers into our businesses is a favourite area for us. It is all part of the bigger picture”.

 

So considering the importance of the non-aeronautical revenue imperative, was there ever any time when the operation was tempted to bring in a third-party retail concessionaire to run all the shops for the airport?

“No we were not,” said Al Akbar, although he added: “We received a lot of approaches from many companies, but we did not consider them because we want to keep our business in house.”

He said this was regarded as critical to retain complete control over the services offered and also to recruit optimum quality staff able to interact and work well with the existing passenger profile.

All of which contributes to the new, much larger, open space retail environment compared to that which existed before at the very congested old airport. So asked what he thinks is special about Qatar Duty Free, Al Baker said it is a world apart from the previous congested facility: “Well it is the concept that we have established in an airport which is really the highlight of this airport and you know you go to airports where duty free areas are congested and packed in a very small space, but you can see the duty free areas in Hamad International.

 

 

The traditional duty free offering spanning all the traditional categories is very comprehensive, spacious, well lit and features good quality signage and shop fittings. As is well known, Qatar Duty Free is now running its own purchasing functions, having employed Aer Rianta International Middle East as its purchasing agents for many years in the past.

 

“It is really a feel for a lot of space and at the same time you don’t see that you are in an airport… it is really like a shopping mall.” Al Baker also acknowledges that it is still very early days at the new facility to really assess how the retail operation is performing just yet, as passengers familiarize themselves with the new layout, the retail mix and where the facilities are all located in this new vast space.

Referring to the passenger mix at the airport today, he said: “Well you know the high-end passengers in any hub will never be that high. But with the branded shops that we have and the acceptance from the passengers, we can feel that we have a very good potential for branded stores, even though the percentage of people that will be going into those shops is only 10%.”

Increasing this initial customer penetration level will be a priority he says and he is confident that Qatar Duty Free has the ability to deliver ‘because we have so much space and so much opportunity to do that’.

He says customer unfamiliarity ‘is making a little bit of an impact’ on the operation initially, but considering the airport only opened last May, he adds that once people have been through the airport a couple of times, they will soon get used to the building layout and spend more time where all the concessions are located.

As for the airline – which is obviously the main carrier at the new airport – Qatar Airways is obviously now a relatively new member of the Oneworld Alliance and this has been positive, says Al Akbar.

 

 

While the iconic bear came to the airport ‘in transit’ as a happy, but accidental passenger, he now looks to be a permanent and highly popular fixture, by courtesy of the Qatari Royal Family and the Qatar Museums Authority.

 

 

“The airline is performing very well of course and becoming a member of Oneworld has given us a huge benefit. We are the only allied airline in the region, so this gives us a lot of boost,” he said.

Less positively and along with other airline heads in the region, he remains concerned about the ongoing problem of air space restrictions in the Middle East however – an issue which can only get worse as long as traffic continues to grow at dynamic pace.

So is Middle East air space is getting quite congested at the moment, we asked?

“Yes, it is and this is a bit of a threat for us,” said Al Baker. “But what we are doing today is we are trying to talk to our partners in the region about how to approach this problem with the government. It is not a logistical problem,” he said, “but more a restriction in the use of the air space by the military.”

Al Akbar says this is a serious issue which needs some big thinking and more than a little ‘reorganisation’ as he explained: “Well it needs a reorganisation and in my opinion it really also needs a central air space management system.”

 

 

The first Qatar Airways commercial flight QR1113 from Bahrain landed at Hamad International Airport at 09:10 local time on 27 May 2014, marking the day that all operations for all airlines transferred to the new $15.5bn airport.

 

 

He says there is no such body in place at present and this is a very important goal that the airline and others are striving to help persuade governments to create in future.

Back at the new airport, Al Baker says he has not changed many of his central aims for the new airport since he was last interviewed by TRBusiness back in 2010.
He still wants the airport’s shops to achieve one of the highest passenger spends in both the region and the world and he is also hoping it will gain a high reputation for the quality of its own offerings and the customer service levels that go with it all.

As Al Baker has already noted, it will take a little time for passengers to familiarize themselves with the new facilities, since 75% to 80% of all traffic through Doha is transferring and that ratio is not going to change anytime soon.

As a result, many regular travellers through Doha may not have had the opportunity to see the facilities yet and Al Baker says this is where he believes the airport will make an impression, as he explained: “I think Hamad International will become a real destination for passengers who will choose to travel through us. You know we don’t only have duty free – we have so many other facilities for passengers.

“You know, we have activity nodes where families and children can spend time; we have sleeping areas; we have a spa; a swimming pool and squash courts; and a gym. We also have a hotel inside the airport on the airside, so all of these things will attract people to come more and more.”

 

 

Qatar Duty Free is also offering some very special fragrances within its vast mix and has entered into joint ventures with some suppliers to run shops together.

 

 

So how is the airport going to promote the fact that it has all of these facilities in future, we asked?

“Well soon the corporate communications and marketing will commission a company to actually film all of the facilities and put it on our IFE (inflight entertainment system-Ed).

“We can then inform people of what is available at the airport, how to get there and how to make the maximum use of their time.” Ironically, Al Baker wryly admits that while the airport’s philosophy is definitely not to be the biggest, but the best, he says that by default it now looks as though it will indeed will be one of the largest.

 

From a personal standpoint he is also extremely selective when asked what other airports he admires around the world, as he explained: “Well I really admire Changi in Singapore and I admire Münich in Germany. The rest of the airports of course are just airports – there is nothing special about them.”

So what special essential elements does he want to see in evidence for the new airport’s customers?

“It is extremely important that we deliver every single amenity that the passenger is looking for at an airport and to make it accessible very easily. Unfortunately today at Doha International it is not the case because the airport is still not fully complete, but once it is that is what we will try to do.

 

“In the next four months we expect the second phase to be ready. You know the airport is still one third not completed and minus our first class lounge, which I think will take at least another eight months to finish.”

Al Baker says he has no doubts that some other airports will try to copy the Hamad International model, but he says management will remain strongly focused and uncompromising when it comes to delivering quality standards to passengers.

He says they have all waited a long time for the new airport to open and so far it is all looking good: “I am extremely positive about it,” he concluded.

 

[A much more in-depth report concentrating on Qatar Duty Free’s new ‘retail offer and complex’ – including a detailed interview with Senior Vice President Keith Hunter – will appear very shortly in TRBusiness].

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