Undaunted Qatar expands China ties despite losses
A two-year airspace blockade imposed on Qatar by several neighbouring countries continues to weigh heavily on Qatar Airways financial performance, but it has failed to dent the Doha-based carrier’s expansion. Read More »
In its latest financial results, to March 31, the group reported an annual net loss of US$639 million, despite a 14% increase in revenue. The airline group’s outspoken CEO, Akbar Al Baker, described the results as a “year of achievement in the face of adversity”.
“Despite facing challenges unparalleled in the airline industry, I am very proud we have grown our fleet, expanded our network and seen overall revenue increase to $13.2 billion. Passenger numbers are up, capacity as measured by available seat kilometres (ASKs) has risen and our cargo business is the largest in the world,” he said.
The state-owned airline blamed the latest loss on higher fuel costs, currency fluctuations and the loss of routes. Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt imposed the “illegal blockade” on the Qatari airline in the belief the emirate supported terrorism.
In the year after the blockade was put in place and in 2018-2019, Qatar has opened 24 routes into Europe, Asia and Africa to compensate for reduced traffic in its regional markets. The network expansion has only partly compensated for lost business. New destinations to West and Central Africa and South America have been suspended.
Qatar’s ASK increased by 13.5% for the reported 12 months. Cargo revenue improved 16.8% and available tonne kilometres (ATK) expanded 11.8% for the year. Executive jet revenue reported substantial growth of 18.4% compared with the previous 12 months.
“Nonetheless, 2018-2019 was a challenging year. While it was disappointing, the underlying fundamentals of our business remain extremely robust,” said Al Baker.
“Our success is due to an unwavering belief in our strategy to give our passengers the very best, backed by the perseverance and hard work of our staff. I look forward to 2019-2020 with optimism and confidence that our growth will continue and we will serve even more countries around the world.”
The airline, which flies to 160 cities, launched 11 destinations in 2018-2019, bringing new routes to 31 since the blockade was imposed.
The airline’s fleet grew by 25 aircraft during the reported year. It took delivery of its 250th aircraft in March. Al Baker said with more than $85 billion of airplanes on order, including options and Letters of Intent, the group had the capacity to continue its ambitious but sustainable network expansion.
During the financial year, the airline group acquired 5% of the issued share capital of Guangzhou-based China Southern Airlines, adding to its holdings in Air Italy, Cathay Pacific Airways, IAG, JetSuite and LATAM. Air Italy recorded a $148.8 million loss for the year. Recent events in Hong Kong are expected to impact returns from its Cathay Pacific investment.