Qatar Airways plans shares sale
Doha // Qatar Airways plans to sell shares to the public in an initial public offering (IPO) in early 2012, which it hopes will follow its third successive year of net profits.
The airline, which is 50 per cent owned by the Qatari government and 50 per cent by private investors, said it had already started work on the offering, which would sell a minority stake to the public.
"We have already triggered the financial mechanism that we would need for an IPO," said Akbar al Baker, the chief executive of Qatar Airways, in Doha yesterday. "I think we will IPO somewhere in the early part of 2012."
The airline's plans have long included a public listing once it had secured three successive years of net profits. The airline's last fiscal year, which ended in March, was profitable, Mr al Baker said, declining to provide figures until the airline officially opens its IPO campaign.
"We are well on the way for a net profit again this year, we close those financials in March, and we are also expecting a profitable level [for the 2011 fiscal year]," he said.
The owners of the airline will decide what percentage of the company would be sold in an offering, he said, although he suggested Qatari interests would still retain a 51 per cent stake.
This year, Middle East airlines should benefit from vastly improved conditions as the global economy rebounds from the recession. The region's carriers will collectively earn US$700 million (Dh2.57 billion) in profits, compared with a $600m loss last year, the International Air Transport Association predicted.
Qatar Airways is one of several Gulf airlines adding new aircraft significantly faster than its long-haul rivals in Europe and Asia, and the carrier's passenger traffic climbed 16.6 per cent in the 12 months to March, to more than 14 million people. The airline is forecasting an increase in traffic of more than 12.5 per cent for its year ending in March next year, to more than 16 million passengers.
The airline's expansion, which includes 10 new routes and the delivery of 22 new aircraft in the past 13 months, has put huge strains on Doha International Airport to keep pace.
Yesterday, Qatari officials said the airport was nearing the end of a $1bn spending campaign to extend the life of the facility until early 2012, when all airline traffic would be moved to the $14.5bn New Doha International Airport (NDIA) located a few kilometres away.
The gas-rich Gulf nation is vying to become a major gateway for international air travel and when the new airport opens it will be able to handle 28 million passengers, expanding to 50 million when further sections are opened about 2015, Mr al Baker said.
By contrast, the current airport is at full capacity, with about 15 million travellers passing through the hub last year. The chronic shortage of capacity has forced the airport to open three new terminals in the past four years. Yesterday, officials inaugurated the latest addition, a 13,500 square metre arrivals hall.
Despite the heavy spending, the new facilities will have a life span of less than two years, authorities have acknowledged, as the existing airport will be redeveloped when NDIA opens.
The $1bn in improvements include a dedicated building for premium passengers, a new terminal for transit passengers, new aprons for taxiing aircraft, and roadways.
In the next few months the airport is scheduled to complete its last project, the conversion of the main terminals building into a dedicated departures hall. Adding additional airport capacity has become a common theme in the Gulf, where airports have struggled to keep pace with the ambitious growth plans of their flag carriers. Billions of dollars worth of work is ongoing in Dubai and Abu Dhabi, home to Emirates Airline and Etihad Airways, respectively.
The growth of budget airlines is also putting strains at Middle East hubs. The budget airline flydubai plans to service 70 destinations by 2016, according to its chief executive, Ghaith al Ghaith, once it receives its entire order of 54 Boeing 737-800 aircraft. The airline currently flies 13 aircraft to 28 destinations.
Published: December 19, 2010 04:00 AM