Qatar Airways reported today a loss of 2.3 billion Qatari riyals ($632 million) for the fiscal year ended March 31st, for a -4.8% margin. That’s the 2nd straight year of losses and 10 times the loss of the prior year.
This coincides with an embargo by neighboring countries, Saudi Arabia, Egypt, the United Arab Emirates, and Bahrain cut diplomatic and economic ties with Qatar on June 2017; Qatar Airways has since been banned from flying to the four countries and from using their airspace.
As a result of this, they can not fly to 20 destinations in the region and this forces Qatar to take longer flight routes – increasing fuel costs and flight times.
Group Chief Executive Akbar Al Baker said in a statement that the losses were attributable to “loss of mature routes, higher fuel costs and foreign exchange fluctuations” but said underlying fundamentals “remain extremely robust”.
“Despite facing challenges that are unparalleled in the airline industry, I am very proud that we have grown our fleet, expanded our network and seen overall revenue increase to QAR 48 billion ($13.2 billion), a rise of 14%,”said Qatar Airways Group CEO Akbar Al Baker.
Qatar’s flagship airline has looked to mitigate the impact of the dispute by launching flights to new destinations, increasing flights on existing routes and leasing aircraft to other airlines.
During the fiscal year Qatar Airways acquired a five percent stake in China Southern Airlines, giving it access to the fast-growing Chinese market and adding to its existing investments in global airlines. It has minority stakes in Air Italy (49%), Hong Kong’s Cathay Pacific (9,99%), British Airways’ parent IAG (21,43%) and South America’s Latam (10%).
Important Numbers Behind Losses
- Qatar Cargo business cemented its place as the second biggest in the world, with volumes increasing by 6.8% transporting 1,452,000 tonnes during the year
- 11 new destinations launched and 25 new aircraft to their fleet
- Passenger revenue increased by 14.3%
In the next image you can see the financial results from the last 5 years:
Cover Image by Ian Clarke