Qatar Airways is likely to post an annual loss after a Saudi-led boycott of its home nation forced the airline to cancel some routes and divert others, chief executive Akbar Al Baker said.
The carrier is working on substituting the 20 or so lost flights for roughly the same number of viable new routes and should then return to profitability, Mr Al Baker said in an interview on Tuesday, adding it’s too early to predict how big the loss will be.
Net income at the Doha-based group rose 22 per cent to 1.97 billion riyals (Dh1.88bn) in the year through March.
“It is painful because there are many routes that slide as much as 2 and a half hours longer, and there are routes that are narrow-body routes where we had to convert to wide-body in order to carry enough fuel to go the longer distance,” the chief executive said in Singapore.
All told, Qatar Airways has lost almost 11 per cent of its network and 20 per cent of revenue, he added.
On June 5 the UAE, Saudi Arabia, Bahrain and Egypt broke diplomatic ties with Qatar and cut off air, sea and land access to the country over Doha’s support for “terrorist groups aiming to destabilise the region”. The dispute is the most serious between GCC members since the organisation’s creation in 1981.
The boycott has led to the scrapping of several short-haul flights, while many intercontinental services have been rerouted because of airspace closures, making flying times less competitive and increasing fuel burn.
Mr Al Baker has previously insisted that the measures against Qatar have had a minimal impact on his company.
Isolated in the Middle East and snubbed by American Airlines Group after bidding for a stake in the US giant earlier this year, Qatar Airways on Monday revealed a surprise investment in Cathay Pacific Airways, extending a policy of taking minority holdings in blue-chip global carriers and giving it a first foothold in East Asia.