Doha : Qatar Airways slumped into the red in its last financial year, recording a net loss of QR251.6 million (US$69.1 million) after what the airline described as "the most challenging year in its 20-year history."
In the previous financial year, the airline recorded a net profit (restated) of QR2.8 billion.
Qatar and four of its Middle East neighbours_ Saudi Arabia, the UAE, Bahrain and Egypt-have been at diplomatic loggerheads since June 2017, a dispute that has seen the Qatari flag carrier barred from the four nations' airspace. Airlines from the four nations have also ceased flying to Doha, the Qatari capital.
Qatar describes the ban on flights as an illegal blockade; given the geographic position of Saudi, Bahraini and UAE airspace to the west, north and south, respectively, many Qatar Airways' flights have had to adopt longer routings to avoid the barred areas.
The carrier said that, despite the geopolitical problems it had faced, revenue grew 7.22 per cent to QR42.2 billion in the year to March 31, while capacity, measured in ASKs, grew 9.96 per cent.
Lower revenue growth was directly attributable to being barred from airspace, which affected departing seats by 19 per cent. Cargo revenue witnessed "very impressive growth" of 34.4 per cent against cargo capacity that grew 14 per cent in terms of ATKs.
The diplomatic row meant that Qatar Airways had to suspend 18 mature routes, replacing these with 14 new destinations during the fiscal year. "New destinations come with launch costs and the necessity to establish market presence, which resulted in an overall net loss of QR252 million. With a positive operating cash inflow, the cash position of the group remained strong at QR13.3 billion."
"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," Akbar Al Baker, Group CEO, Qatar Airways said in a typically combative statement accompanying the results.
As well as opening new routes, existing sectors saw an increase in frequency and capacity as capacity was redeployed with the aim of softening the impact of losing 18 destinations.
The airline noted that, despite its travails, the carrier had continued to pick up a clutch of airline industry awards.
It also noted that during the financial year, Qatar Airways Group had continued to expand its investment portfolio in other carriers. This included an initial 9.94 per cent stake in Cathay Pacific_ since increased to 9.9 per cent_ as well as a 49 per cent share in AQA Holding, parent company of Italy's Meridiana fly, which was relaunched as Air Italy in February 2018.
During the year, the carrier was the first to introduce the Airbus A350-1000; in total, it took 20 aircraft of various types into its inventory over the financial year.