Struggling Qatar Airways expects "very large" annual loss, CEO Says
State-owned carrier to seek new streams of financing to survive, including equity injection from government
Qatar Airways expects to post a loss for its current fiscal year after a political rift with Arab countries forced it to cancel some routes and divert others.
The Doha-based carrier will seek additional streams of financing to survive and may call on its state owner to provide extra funding if the boycott continues, Qatar Airways chief executive Akbar Al Baker told Reuters TV at an annual tourism fair in Berlin.
“We will announce a very large loss during the current financial year which ends this month,” he said.
Last June Saudi Arabia, United Arab Emirates, Bahrain and Egypt implemented a boycott of Qatar over its support for "terrorist groups aiming to destabilise the region". The four states subsequently closed Qatar Airways offices and shut their airspace to the airline forcing the carrier to scrap 18 short-haul routes to their countries. Longer flight diversions using wide-body planes drove up fuel costs and increased flight times.
Qatar Airways earned a $541 million profit in its last fiscal year. Mr Al Baker had previously stated that the airline expects a loss this year without disclosing how significant it would be.
Qatar Airways has announced new routes and greater frequencies since the boycott began. It revealed a new twice-daily service to London Gatwick on Wednesday.
As part of its global expansion strategy, Qatar Airways has invested in major carriers, including a 20 per cent stake in British Airways parent IAG as well as holdings in Cathay Pacific, LatAm and Italy's Meridiana, which it renamed Air Italy. In India, it is going through "labourious" legal procedures before obtaining a license to start up a domestic airline to capitalize on the world's fastest growing travel markets.
Updated: March 8, 2018 03:42 PM