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Abu Dhabi, UAEMonday 10 December 2018

Qatar Airways may incur loss for two consecutive years

Carrier' chief executive says a woman is incapable of handling his job

Qatar Airways chief executive Akbar Al Baker (left) and Qantas chief executive Alan Joyce (right) attend a press conference at the International Air Transport Association annual meeting in Sydney after Mr Baker said his carrier was led by a man as "it is a very challenging position". Peter Parks/ Afp
Qatar Airways chief executive Akbar Al Baker (left) and Qantas chief executive Alan Joyce (right) attend a press conference at the International Air Transport Association annual meeting in Sydney after Mr Baker said his carrier was led by a man as "it is a very challenging position". Peter Parks/ Afp

Qatar Airways may incur losses for the second consecutive year due to a 12-month political rift that led to a ban on the airline by four Arab countries.

The Doha-based carrier may go into the red in the fiscal year ending March 2019, depending on how it controls costs and mitigates yields, Akbar Al Baker, Qatar Airways chief executive, said during the International Air Transport Association (IATA) annual general meeting and World Air Transport Summit taking place in Sydney this week. The airline said in April it made a “substantial” loss in the fiscal year ending March 2018 but would not reveal the amount.

“There’s a possibility, yes, that it could continue again,” Al Baker said on Tuesday. The second loss may be smaller than last year “but then oil prices are rising, so I don’t know.”

Qatar Airways has been banned from operating in or flying over 18 cities in the United Arab Emirates, Saudi Arabia, Bahrain and Egypt. A year ago on June 5, the Arab countries severed diplomatic and trade ties accusing Qatar of financing terrorism. Qatar has since denied the charges but the deadlock remains. The boycott forced Qatar Airways to scrap some short-haul routes while diverting many intercontinental services because of airspace closures, making flight times longer and increasing fuel burn.

“We’re concerned...that rising fuel will put downward pressure on our bottom line and the only way we can mitigate is to make sure to control our costs to cover ourself for the increase in oil price,” he said.

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IATA projects oil prices to average $70 a barrel in 2018, up from $54.90 last year and its previous forecast of $60. The profitability of airlines globally is expected to drop 12 per cent this year on a jump in fuel costs, the industry body warned this week.

Qatar Airways has halved the losses it predicted for the last financial year, Mr Al Baker said at the event.

Mr Al Baker rattled those attending a press conference on Tuesday when he claimed only a man could handle the challenges of leading Qatar Airways.

The admission was made only a few minutes after Mr Al Baker was named chairman of the IATA board of governors, a male-dominated sphere in aviation.

"Of course, it has to be led by a man because it is a very challenging position," Mr Al Baker said in response to a question on how the industry body will tackle the problem of gender inequality in key management positions, especially in the Middle East.

The comment on suggesting his role was too difficult for a woman sent shockwaves through the event, doing little towards the promises of global airline chiefs to promote gender equality. The theme of gender imbalance was a major topic of discussion at the 74th edition of the IATA annual general meeting this year, in which a majority-male group of executives agreed that more needed to be done to get more women in senior management roles at airlines.

Mr Al Baker’s response was met with gasps, boos, and indignant responses from the media, with Qantas chief executive Alan Joyce reminding Mr Al Baker of his promise to refrain from making controversial comments after accepting his position as chairman of the IATA board of governors.

Al Baker said he wanted to have “fireworks around” to motivate people to ask questions during the press briefing, even as the room erupted with noise.

Mr Joyce went on to say that airlines who are not looking to tap into diversity will be “disadvantaged” and stressed the importance of balance not just in gender but also race.