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Qatar Airways posts expected loss but stays resilient

September 20, 2018 Headline News No Comments Email Email

 

Qatar Airways – which has warned in recent months that it would report an annual loss because of a regional political dispute that has banned it from four Arab countries – has now announced the extent of the loss, saying the annual results demonstrate its strength and resilience in the face of adversity.

After its toughest year in two decades, Qatar Airways yesterday reported a QAR 252 million (USD 69 million or AUD 95 million) loss for the financial year ending 31 March 2018, following what the airline described as the most challenging year in its 20-year history.

The airline made USD 541 million profit in its previous financial year.

Last year, the UAE – home of Emirates and Etihad – joined Saudi Arabia, Bahrain and Egypt in accusing Qatar of supporting causes that back terrorism, a charge Qatar vehemently denies. Some of those countries cut diplomatic ties with Qatar and closed off their airspace for all Qatari-registered aircraft.

Al Baker has voiced his outrage at the continuing blockade, which is forcing Qatar Airways to fly longer routes and burn more fuel.

The latest annual result saw overall revenue and other operating income grow 7.22% annually compared to capacity (available seat kilometres) growth of 9.96%.

The airline said lower revenue growth was “directly attributable to the illegal blockade since 5 June 2017, which impacted departing seats by 19%”. Cargo revenue witnessed impressive growth of 34.4% against cargo capacity (available tonne kilometres) growing 13.95% annually.

Fabrice Brégier of Airbus and Qatar Airways chief Akbar Al Baker hold a model of a new Qatar Airways plane

The airline stated: “Replacing 18 mature routes, which were closed due to the illegal blockade, the airline opened 14 new destinations during the fiscal year (24 new destinations to date). New destinations come with launch costs and the necessity to establish market presence, which resulted in an overall net loss of QAR 252 million. With a positive operating cash inflow, the cash position of the Group remained strong at QAR 13.312 billion.

Qatar Airways chief Akbar Al Baker, said: “This turbulent year has inevitably had an impact on our financial results, which reflect the negative effect the illegal blockade has had on our airline.

“However, I am pleased to say that thanks to our robust business planning, swift actions in the face of the crisis, our passenger-focused solutions and dedicated staff, the impact has been minimised – and has certainly not been as negative as our neighbouring countries may have hoped for.”

Al Baker said a strategic and rapid response from the airline “when neighbouring countries illegally blocked Qatar’s airspace on 5 June 2017” had placed Qatar Airways in a position of strength from which to recover from “the unprecedented attack on the country’s sovereignty”.

Within 10 weeks new destinations to Sohar, Prague and Kyiv were announced and launched, while other routes saw an increase in frequency and capacity, thus swiftly redeploying capacity with a view to soften the impact of being illegally blockaded from 18 regional gateways.

Qatar Airways A380 inaugural return QR756 taxis to pick up Atlanta passengers bound for Doha and 41 countries beyond

The airline has launched 24 new destinations in total since the start of the blockade, further expanding its network of more than 150 exciting gateways around the world and continuing its ambitious growth plans in Europe and Asia.

A Qatar Airways statement said: “Against this backdrop of regional political tension, just six weeks after the start of the blockade, Qatar Airways proved to the world that its neighbours had failed to reach their objective in reducing the airline to collapse by instead winning the coveted title of ‘Skytrax Airline of the Year’ for the fourth time in less than 10 years.”

The airline also took home awards for ‘World’s Best Business Class’, ‘Best Airline in the Middle East’, and ‘World’s Best First Class Airline Lounge’.

Written by Peter Needham

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