Antalya (Turkey) – The CEO of Qatar Airways said on Wednesday that the company suffered a huge loss in the past fiscal year due to a regional dispute that caused the company to be banned from operating in four Arab countries, but he did not reveal the extent of the losses.
Qatar Airways has been banned from flying to 18 cities in the Kingdom of Saudi Arabia, the UAE, Bahrain and Egypt since June, when those countries severed their relations with Qatar due to its involvement in supporting and financing terrorism.
Qatari officials were keen to cover up the huge losses that befell Doha as a result of the worst crisis it was facing, and they rarely acknowledged the damage to the Qatari economy due to a policy that the boycotting countries considered a threat to the national security of the Arab and Gulf countries.
The aviation sector is one of the most vital sectors in Qatar, while Qatar Airways is considered one of the largest companies in the world, and incurring huge losses would tighten the financial stranglehold on Doha despite its possession of huge financial reserves.
But the current situation forced Qatar to withdraw from its reserves to cover huge losses resulting mainly from its intransigence and insistence on a policy approach that harmed neighboring countries and a number of Arab countries.
Akbar Al Baker told reporters during the Eurasia Air Show in Antalya, Turkey, “We increased our operating expenses, and our revenues were also affected. Therefore, we do not believe that our results for the last fiscal year will be very good. I do not want to talk about the size of the loss, but it is large.”
He added that some other activities achieved a profit, although this was not sufficient to offset the impact of the company’s losses.
Qatar Airways has a few affiliated units, including units for food and beverage services and ground services at airports.
Al-Baker said that the state-owned airline will need an additional eight weeks to finalize its books and make the necessary adjustments before it announces its financial results for the year ending on March 31.
Qatar Airways achieved a profit of 1.97 billion Qatari riyals ($541 million) in the previous fiscal year.
Saudi Arabia and the UAE were popular destinations for Qatar Airways, which was also banned from entering the airspace of the four boycotting countries.
Due to the diplomatic and economic boycott, Qatar was forced to take very long and expensive air routes to secure an important number of civil and commercial flights, which also applies to the cruise route.
This forced the airline to operate longer flights on many routes to the west and south of Qatar, which requires more fuel and increases costs.
Al Baker said Qatar Airways had no immediate plans to ask its sole shareholder, the government of Qatar, for a capital injection, but it may do so if the airspace ban continues and if there are pressures on the debt-to-equity ratio.
Qatar Airways owns shares in a number of airlines, including Cathay Pacific and IAG Group, the parent company of British Airways.
Al Baker said that Qatar Airways will have a passenger and freight network that includes about 250 destinations around the world when it hosts the FIFA World Cup in 2022.
According to its website, the company currently operates flights to more than 150 destinations.
