Qatar Airways expects to report its third consecutive annual loss in the airline's 2019 financial year ending March 31, its chief executive Akbar Al Baker said.
The Doha-based airline is suffering from a combination of factors including higher fuel prices and a tough operating environment, further exacerbated by a slowing global economy, currency volatility and rising geopolitical tensions in the Middle East, Mr Al Baker said during a media briefing on Wednesday.
Mr Al Baker said the airline’s losses were due to the airline’s “operating expenses.”
Qatar Airways is also grappling with a boycott of Qatar by its neighbouring states Saudi Arabia, the UAE, Bahrain and Egypt which severed economic ties with the Gulf nation in 2017. As a result, the airline is restricted from the airspace of the four countries, which has led to an increase of fuel costs and extended flight times. The carrier also cut 20 routes following the airspace closure.
The Doha-based carrier posted a widening net loss of 2.3 billion Qatari riyals (Dh2.32bn) in the 2018 fiscal year ending March 31, compared to 252.5 million Qatari riyals a year earlier. The nearly ten-fold rise in annual losses outpaced the 14 per cent increase in full-year revenue of 48 billion riyals.
At that time, Mr Al Baker said that the carrier faced "challenges that are unparalleled in the airline industry" due to the continued airspace closures.
Qatar Airways has continued to invest in other airlines during this period. It acquired a minority stake in China Southern Airlines to gain access to the growing domestic market within the country during its last fiscal year. This year, Mr Al Baker said that the company is in talks to purchase a stake in the Indian carrier Indigo.
Qatar Airways has minority stakes in Air Italy, Hong Kong's Cathay Pacific, British Airways' parent IAG, and South America's LatAm. The airline did not register any loss in bookings from the recent rise in tensions across Iran, where a civilian jet was downed after being mistaken for a missile, Mr Al Baker said. Qatar Airways uses Iranian airspace to circumvent airspace closures around its hub.