Editor’s Note: This story originally appeared in Volume 7 of B.H. Magazine, order your copy now.
The thing you have to understand about Akbar Al Baker, Qatari businessman and former CEO of Qatar Airways, is that he did not believe he was running an airline. He was running an argument.
A $25 billion, 280-odd aircraft, six-continent argument that a country with about the same number of citizens as Brisbane can eliminate the geographic advantages that took Western carriers a century to build – and do it while serving you lamb cutlets on fine bone china at 42,000 feet.
If you had pitched this to a room of aviation executives in, say, 1991 – a tiny gas-rich peninsula in the Persian Gulf, summer temperatures that melt tarmac, no domestic market to speak of, Saddam’s tanks still smouldering in the neighbouring Kuwaiti desert, surrounded by peers who would eventually try to blockade it out of existence – they would have escorted you from the building.
And yet here you are, somewhere over the Empty Quarter, in a seat that has become a private suite, with a quilted door that slides shut to block out the riff-raff. A flight attendant named Katarina pours a glass of vintage Billecart-Salmon and remembers that you like sparkling water, not still, even though you only told her once, three hours ago, on the ground in Doha. The lights have shifted to a low violet. The Diptyque candle – not a real candle, they’re not insane, but a very convincing diffuser – is doing something to the air. And the part of your brain that knows you are inside a pressurised metal cylinder burning 10,000 litres of kerosene an hour has switched off.
Qatar Airways Qsuite is, by most reasonable measures, the single best way to move a human body between two points on the surface of the earth. It is also, by less obvious but more interesting measures, a weapon.
Three tiny Gulf states – Qatar, the UAE, and to a lesser extent Abu Dhabi’s slightly chastened Etihad – figured out something that Boeing and Airbus understood but the legacy carriers had forgotten: that aviation is not really about moving people. It is about moving money, moving influence, moving the idea of a country into the minds of the global affluent class so effectively that they start to think of a refuelling stop in the desert as a destination. The old guard – your British Airways, your Lufthansas, your American legacies running 747s with seats designed, apparently, by people who have never sat in one – never saw it coming. Or they saw it and complained about subsidies, which is what you do in business when someone is eating your lunch, and you’d rather talk about the rules than the food.
Before you know it, the food is gobbled up.
But here is where the story gets interesting, because audacity on this scale requires one thing above all others: a stable patch of earth to build your hub on. And the Middle East, in case you haven’t been paying attention, has stopped playing nice in the sand pit.
To understand how we got here, you have to go back to the map. Pull one up. Look at where Dubai sits. Now draw a circle around it – eight hours of flying time in every direction. That circle contains something like five billion people. London, Mumbai, Singapore, Nairobi, tack a few more hours on, and it can stretch to Perth or Manila. It contains, in other words, basically everyone who matters to the global economy and quite a few people who are about to. This is the cheat code.
This is the thing that Tim Clark, the Englishman who ran Emirates for the better part of three decades, was encouraged by his financiers to see before almost anyone else: that the Gulf wasn’t at the edge of the world. It was, if you squinted at it from the right altitude, the centre. All you needed was an airport big enough, an airline ambitious enough, and a government patient enough to burn cash for a decade or two until the flywheel caught.
The Western carriers had the planes, the history, and the frequent flyer programmes. What they did not have was a government willing to write cheques of essentially unlimited size while asking, in return, only that you please make the country famous. Enviable, even.
The Americans had deregulation, which gave them cheap fares and Spirit Airlines – in other words, exactly what they deserved. The Europeans had flag carriers hamstrung by unions and politicians and boards of directors who treated the airline as a jobs programme that occasionally, almost by accident, transported passengers. The Gulf had sovereign wealth funds, monarchs who understood branding better than most CMOs, and a complete absence of the organisational scar tissue that accumulates when you’ve been running an airline since the age of propellers.
Emirates went first and went big. Tim Clark’s strategy was never subtle: buy the largest aeroplane ever built – the Airbus A380, a double-decker cathedral of aviation that seated 500 people and that every other airline was terrified of – and buy more of them than anyone thought sensible. Then sponsor everything. Arsenal. Real Madrid. The Rugby World Cup. The Melbourne Cup. The Australian Open. If it moved and affluent people watched it, Emirates put its name on it.
The logo became a kind of global wallpaper, so ubiquitous you stopped noticing it, which was of course the point. Clark understood something about brand psychology that most airline executives, with their spreadsheets and their yield management models, did not: that people choose airlines the way they choose hotels. Not rationally. Aspirationally. You didn’t fly Emirates because you’d done a careful comparison of legroom specifications. You flew Emirates because you’d seen the ad with Jennifer Aniston and the shower suite, and some part of your brain had filed it under this is what successful people do.
Qatar Airways took a different approach, which was to be so obsessively, almost pathologically good at the actual product that the aviation press would do your marketing for you. Al Baker was not interested in being liked. He was interested in winning Skytrax awards, which he did, year after year after year, with a regularity that became almost tedious. When he launched Qsuites in 2017 – the first business class with actual doors, an innovation so obvious you couldn’t believe nobody had done it – the response from the industry was not admiration so much as panic. Here was a business class that was, functionally, a first class, priced at business class fares, on an airline backed by a country that didn’t particularly need it to make money. How exactly were you supposed to compete with that? British Airways’ response was to put new cushion covers on their top-and-tail Club World seats, which told you everything you already knew about British Airways’ trajectory. See also: irrecoverable stall.
Etihad, the third of the Gulf carriers, is the one they don’t like to talk about at dinner parties, because Etihad is what happens when ambition outpaces strategy. Abu Dhabi looked at what Dubai and Doha were doing and said, essentially, we’ll have what they’re having, but more. Under James Hogan, Etihad embarked on what became known as the equity alliance strategy – buying minority stakes in airlines around the world. Alitalia. airberlin. Jet Airways. Air Serbia. Virgin Australia. Darwin Airline, which you have never heard of because it no longer exists. The theory was that Etihad would become the centre of a global web of partner carriers, feeding traffic into Abu Dhabi from every direction.
The reality was that Etihad had invested billions of dollars in airlines that were, to use the technical term, on fire. Alitalia had been failing since before most of its employees were born. airberlin was a discount carrier with legacy carrier costs and an identity crisis. Jet Airways eventually collapsed so completely that its planes were repossessed on the tarmac. Etihad wrote off something in the neighbourhood of five billion US dollars and replaced Hogan with Tony Douglas, a quiet Englishman whose primary qualification appeared to be that he would not, under any circumstances, attempt to buy another airline.
And then, just as the Gulf model seemed to be reaching a kind of cruising altitude – Emirates printing money, Qatar untouchable on product, Etihad stabilised if humbled – two things happened that nobody had adequately stress-tested in the modern era of flying.
The first was Covid, which did to aviation what a .50 calibre bullet does to a piñata. But here the Gulf carriers revealed something important about their DNA. While American airlines furloughed tens of thousands, and European carriers parked their fleets in Spanish deserts and begged for bailouts, Emirates and Qatar kept flying. Not everywhere. Not profitably. But they kept the network alive, maintained the slots, honoured the bookings, and – crucially – built a reservoir of goodwill among corporate travel managers and high-value passengers who remembered, when the world reopened, exactly who had been there when things went to shit.
The result was a post-pandemic boom that bordered on the obscene. Emirates posted a profit of almost five billion dollars. Qatar couldn’t order planes fast enough. The passengers came back to the Gulf, and they came back loyal, which is the one thing money can’t usually buy in aviation. No amount of salt and pepper squid served in the Sydney First Class Lounge could salvage Qantas’ rep during these exact same years.
The second thing was geopolitics, and this is the part of the story that doesn’t have an ending yet.
The Gulf carriers were built on an implicit promise that the Middle East, despite everything you’ve been conditioned to believe since leaving the womb, was a safe and stable place to route the world's air traffic through. The hubs worked because they sat at the intersection of East and West, and because the governments that backed them were rich enough, savvy enough, and quasi-authoritarian enough to keep things that made investors and tourists comfortable.
That promise was always audacious – this is a region with a geopolitical rap sheet spanning decades. The Gulf War, the Iraq War, the Arab Spring, the Syrian civil war, the Yemen conflict, and the 2017 Qatar blockade, during which SauArabia and the UAE tried to economically strangle the very country whose airline you were probably connecting through. But the carriers weathered all of it, one event threw a wrench in the FIFA World Cup for good measure, and each crisis they survived made the next one seem more survivable. There is a dangerous comfort in this. It’s the same logic that makes people build mansions on California faultlines.
What’s different now is the scale, the proximity, and, crucially, the timing. The Israel-Gaza war, and its metastatic spread into Lebanon and the Red Sea, has done something that previous regional spats mostly avoided: it has made this new generation of Western consumers, many of whom haven’t seen US-provoked warheadliness since they were children, think about the Middle East as a zone of active conflict again, rather than an abstract news cycle.
The Houthi attacks on shipping through the Red Sea – a body of water that is, geographically speaking, right there – have introduced the phrase “overflight risk” into water cooler conversations that used to be about flat beds and wine lists. Volleys of ballistic missiles are now observed with fascination in real time from the window seats of Dreamliners, and are promptly lauded by Redditors. Why not share it on Instagram, too, with the nonchalance of a community fireworks display? Insurance premiums are up. Some corporate travel policies flag Gulf connections, and after the crippling events of this year, they avoid them entirely. The actual risk to an Emirates 777 cruising at 500 knots at an altitude of 40,000 feet above the Arabian Sea remains, by any actuarial measure, negligible 99.999 per cent of the time.
That being said, the 290 souls on board Iran Air Flight 655 would no doubt say otherwise if they were still with us. In 1988, the US Navy mistook their Airbus A300 for a threatening Iranian F-14 Tomcat, despite the plane transmitting civilian identification codes. The same could be said for Ukraine International Airlines Flight 752, which was shot down in 2020 by the Islamic Revolutionary Guard Corps – paranoid about airstrikes from the Trump Administration – just after takeoff in Tehran, killing 176.
Regardless, aviation doesn’t run on actuarial measures. It runs on perception. And perception is a fuel that burns unpredictably and plummets faster than the price of oil in March 2020.
The deeper problem – the one that keeps the planners in Doha and Dubai up at night, though they would never admit it publicly – is Iran. Every scenario model, every geopolitical war game, every hushed conversation between Gulf aviation executives and their government handlers eventually arrives at the same question: what happens if Iran and the United States, or Iran and Israel, or Iran and some combination of the above, pass the proverbial point of no return?
The Strait of Hormuz, through which a fifth of the world’s oil flows, is 21 nautical miles wide at its narrowest point. The airspace above the Persian Gulf, through which essentially all of these airlines’ flights transit, would become, in the event of a serious military escalation, either dangerous, closed, or both. There is no plan B for this. You cannot move Dubai. Nor its never-ending skyline of glitzy resorts, or its echo chamber of influencers and expats.
Perception, for what it was worth, caved in on itself along with the roof of Dubai International’s Terminal 3 in early March, when Iran retaliated against US and Israeli strikes that had killed Supreme Leader Khamenei. Smoke-filled scenes of chaos and destruction boomed around the world – the sanctuary of the Emirates First Class Lounge showers was soberingly recognisable. Travellers evacuated to airport hotels, and then elsewhere again, stranded for weeks. Every thread of perception these airlines had so painstakingly woven, unspooling in real time on social media.
Terror continued to pelt the skies of the UAE and its American-supporting neighbours for weeks thereafter.
And yet the order books still tell a different story – or perhaps the same story, told with the defiant optimism of people who have bet everything on an ending they prefer. Emirates has placed orders worth tens of billions for new Boeing 777Xs and Airbus A350s. Qatar is refreshing its fleet with a fanaticism that suggests Al Baker’s successor, Badr Mohammed Al-Meer, inherited not just the airline but the pathology.
And then there is Saudi Arabia, which has looked at the whole Gulf carrier phenomenon and concluded, with characteristic Saudi subtlety, that what the region really needs is another one. Riyadh Air, backed by the Public Investment Fund and helmed by Tony Douglas, is the newest entrant – a full-service carrier (minus the vintage Billecart) designed to do for Riyadh what Emirates did for Dubai. Which is to say, make it a place people go on purpose rather than by accident. The business plan assumes, among other things, that the Middle East will persevere as the kind of turf you’d want to build a hub. That the ground will hold. It is, by any honest measure, an extraordinarily expensive example of normalcy bias.
But nowhere, even in the depths of the Arab Mary Poppins’s handbag of unlimited cash, can the Gulf states find enough money to buy peace. All this time, Iran has hovered over their combined cultural momentum like a flight path nobody wanted to acknowledge.
We’re not even halfway through the year, and these executives have once again found themselves scrambling for the footnote in their Airlines For Oil Countries handbook that tells them how to send millions of passengers through their desert-licked terminals every day while side-stepping inconvenient bursts of SAMs sent to put down Shahed drones. In the opening stanza of the most recent conflict, 21,000 flights were cancelled within the first week across the trio, while airports around the world collected billions of dollars worth of stagnant Gulf metal on any spare corner of tarmac that would have them.
The airlines can bury their heads in the sand if they want – so too can the customer – but the two-decade chapter of oil-fuelled prosperity has finally revealed itself as an anomaly in the rearview mirror of history. Their loyalty rebound tactic of the Covid era is about as effective in this scenario as a flak jacket is against a Reaper Drone.
The Gulf is not just a nice routing option, to its credit – and full credit it deserves – it’s become the structural plumbing for global aviation. It funnels a monumental amount of new air traffic that you just can’t reroute overnight. According to Willie Walsh, the Director General of the International Air Transport Association (IATA), the European airlines, which lift about 9.5 percent of global capacity, simply do not have the resources to replace the Gulf carriers. Without them, the strain on our globalised society will be felt for years. And the consumers will be the ones with their wings and wallets clipped.
Qantas’ stopover-neutralising services to London and NewYork are looming while Asian hubs are repositioning. At one point in early March, ANA was charging north of AU$26,000 for a return business class fare from Sydney to London via Tokyo. Somewhere, a poor accountant is wincing as his management team reaches for the company AMEX.
The last time I flew Qsuites – the glory days now, perhaps – Dohato Geneva, the passenger across the aisle was a management consultant from McKinsey who told me, unprompted, that this seat was the single best perk of his job. Better than the pay.
Better than the hotels. He flew Qatar long-haul eight, sometimes ten times a year. He’d considered switching firms the previous year, and one of his genuine concerns – he said this without irony – was whether the new firm’s travel policy would let him keep flying Qsuites.
A management consultant from McKinsey, a man who spent his professional life advising companies on rational decision-making, had allowed a long-haul airline seat to become a factor in his career planning. Akbar Al Baker, wherever he is, would have loved this. It would have confirmed everything he believed: that if you make the product good enough, people will rearrange their lives around it. That his argument was right all along.
Until you’re the one stranded on a cold terminal floor.
