Qatar Airways attributes $69m annual loss to “illegal blockade”

posted on 18th September 2018 by Justin Burns
Qatar Airways attributes $69m annual loss to "illegal blockade"

Qatar Airways made a loss of 252 million Qatari Riyal (QR) ($69 million) in the 2017/18 fiscal year ending 31 March compared to a profit of 2.7 billion QR in 2016/17 which it put down to the “illegal blockade” and added costs from operating new routes to get around the Gulf crisis.

The airline’s overall revenue and other operating income grew 7.22 per cent annually to 42,229 QR ($11.5 billion) last year.

In its annual report, Qatar Airways said it was “most challenging year in its 20-year history” and the results “demonstrate its strength and resilience in the face of adversity”.

Lower revenue growth the carrier said was directly attributable to the illegal blockade since 5 June 2017, which it said impacted departing seats by 19 per cent. However, capacity in available seat kilometres grew 9.96 per cent in the 2017/18 fiscal year.

The Group generated EBITDAR margin of 23 per cent at 9.714 billion QR. EBITDAR was lower than the previous year by 1.759 billion QR due to longer flying time resulting from the “illegal blockade” and loss of departing seats from the blockading countries including Saudi Arabia, Egypt, Bahrain and Kuwait.

Qatar Airways welcomed onboard 29.1 million passengers in the 2017/18 fiscal year, a decline on the 32 million passengers that flew with the carrier, the year before.

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 Qatar Airways said came with launch costs and the necessity to establish market presence, which it said led to the overall net loss of 252 million QR.

Meanwhile, ground handling arm Qatar Aviation Services handled 45 million bags in 2017/18, producing 129,000 load sheets and handled 212,178 flights. Qatar Airways Catering Company produced 150,000 meals, at its 69,000 square metre catering facility.

Qatar Airways Group chief executive, 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.”

The airline said a strategic and rapid response from the airline when neighbouring countries “illegally blocked” Qatar’s airspace on 5 June 2017 put 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.

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.

Throughout this turbulent year, Qatar Airways said it has not wavered from its strategy and vision of constant growth and development to give its loyal passengers the best possible on-board experience every time they travel.

As the first airline in the world to take delivery of the Airbus A350-1000 the airline also added 20 other aircraft to the fleet throughout the financial year, increasing the total number to 213 (as of 31 March 2018).

During the financial year, Qatar Airways Group also continued apace with the expansion of its investment portfolio to include an initial 9.94 per cent stake in Cathay Pacific, which has since increased to 9.99 per cent, as well as a 49 per cent share of AQA Holding, the parent company of Meridiana fly, which was relaunched as Air Italy in February 2018.