Finance Update

Qatar Airways to announce another annual loss this year

Qatar Airways to announce another annual loss this year, CEO stated

The state-owned airline has quickly expanded to new destinations since it lost access to 18 Middle East cities in 2017 due to a diplomatic breach between Qatar and some other Arab states.

By ReutersTFM Watch

(Reuters): Qatar Airways will announce a second consecutive yearly loss this year, its chief executive stated on Wednesday, accusing higher fuel costs and unfavourable currency exchange rates.

The airline has rapidly expanded to new destinations since it lost access to 18 Middle East cities in 2017 due to a diplomatic breach between Qatar and some other Arab states.

“We reported a loss last year and we will announce another loss this year but it doesn’t mean that Qatar Airways is not going to expand or invest,” Akbar al-Baker said to reporters at the ITB travel fair in Berlin.

“We have a very strong balance sheet, regardless if we are temporarily making losses because of our additional operating costs, and the increasing fuel price and the loss of foreign exchange.”

Qatar Airways lost access to cities in Saudi Arabia, the United Arab Emirates, Egypt and Bahrain in June 2017, when these four countries cut ties with Qatar after condemning it of supporting terrorism. Qatar denies the charges.

The airline has also been barred from their skies, meaning its flights to the west and south of the Gulf have to fly longer routes around the four countries, growing its fuel costs.

The Airways reported a $69 million loss last year, which it accusing on the higher operating costs caused by the diplomatic disagreements.

In 2017, Baker was stated that the airline’s owners might have to put in additional capital if the issues continued over the long term.

Still, on Wednesday he said he did not expect to seek a capital injection in the predictable future.

Qatar Airways declared seven new destinations on Wednesday, including Malta and Somalia’s capital Mogadishu and said it would announce a further seven in the second half of current year.

It will continue to operate its fleet of 10 Airbus A380 aircraft for the “predictable future,” Baker said. Airbus announced last month it would end A380 production in 2021.

Source: Reuters

– TFM Watch

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