Qatar Airways to Report Second Consecutive Annual Loss

IndraStra Global

Qatar Airways to Report Second Consecutive Annual Loss

By IndraStra Global News Team

Image Attribute: Airbus A319-133LR of Qatar Airways (A7-CJA) / Source: Wikipedia

Image Attribute: Airbus A319-133LR of Qatar Airways (A7-CJA) / Source: Wikipedia

On March 6, 2019 (in Berlin), Qatar Airways chief executive Akbar al-Baker said that the state-owned airline will report a second consecutive annual loss this year. He blamed it to "higher fuel costs" and "unfavorable currency exchange rates". The airline’s financial year ends on March 31.

"We announced a loss last year and we will announce another loss this year but it doesn't mean that Qatar Airways is not going to expand or invest," Akbar al-Baker told reporters at the ITB travel fair in Berlin. He further added, "We have a very strong balance sheet - regardless if we are temporarily making losses because of our additional operating costs, and the rising fuel price and the loss of (foreign) exchange."

Since the start of Gulf-Qatar crisis which began in June 2017, most of the major middle eastern airlines including Emirates, Gulf Air,  EgyptAir,  FlyDubai, Air Arabia, Saudi Arabian Airlines and Etihad Airways suspended flights to and from Qatar. In response, Qatar Airways also suspended its flight operations to Saudi Arabia, the UAE, Egypt, and Bahrain. In total, access to 18 Middle East cities was lost.

In July 2017, the Montreal-based International Civil Aviation Organization (ICAO) asserted its neutrality in the conflict and announced that Qatar Airways will have access to three contingency routes over international waters in early August based on a preliminary agreement reached with the Saudi Arabia's General Authority of Civil Aviation (GACA) early that month meaning its flights to the west and south of the Gulf have to fly longer routes around the four countries, increasing its fuel costs. At that time,  the ICAO reminded all member countries to comply with the 1944 Chicago Convention on International Civil Aviation and its addenda.

The counter the effect, the airline has rapidly expanded to new destinations. Despite that, last year, the carrier reported a US$ 69 million loss which it blamed on the higher operating costs caused by the dispute. And at that time, Baker said: "the airline's owners might have to put in additional equity if the dispute continued over the long term." However, on March 6 he said he did not expect "to seek a capital injection in the foreseeable future".

At ITB Berlin, the airline has announced seven new destinations, including Malta and Somalia's capital Mogadishu and said it would announce a further seven in the second half of this year. And, Baker has also confirmed that Qatar Airways will continue to operate its fleet of 10 Airbus A380 aircraft for the "foreseeable future." Last month, Airbus announced it will stop making its superjumbo A380 in 2021 for lack of customers.