Qatar Airways Records Nearly $2bn Annual Loss

Qatar Airways has released its annual statement for the year ending March 31st, 2020. In the report, the airline confirmed a loss of around $1.9 billion (7 billion riyals). The airline also confirmed that it received a 7.3 billion riyal advance from the government of Qatar to help it cope with the global downturn. Last year the airline reported a loss of $639 million, making this year a record year of losses before the impact of the pandemic is factored in.

Qatar Airways Doha
Qatar Airways reported a record-breaking loss for the year ending March 31st, 2020. Photo: Qatar Airways

Everyone knows that this year’s, and next year’s, financial results aren’t going to be the most promising results. Qatar Airways released its annual results for the 2019-2020 and reported a record-breaking loss.

According to the results statement, the recent global pandemic isn’t the only reason why the airline suffered such huge losses. The report claims that the ongoing dispute regarding airspace in the Middle East is continuing to cause problems for the airline. Additionally, Qatar Airways owned a 49% stake in now liquidated airline Air Italy, which was obviously a blow for the carrier.

Of course, COVID-19 is slightly to blame. However, these results only account for revenue until the end of March 2020. Since the pandemic only starting impacting airlines in mid-March, the outbreak had a limited impact on this year’s results. 2021 will be even worse than this year.

The loss does not include months of impact from the COVID-19 pandemic. The airline will likely have more losses to post next year. Photo: Qatar Airways

The Results

Despite the somewhat negative total, Qatar Airways did have some good numbers in the annual report. The total number of passengers carried increased by almost 10% to 32.4 million passengers. The airline’s capacity of seats per kilometer also increased by just over 3%.  Passenger revenue grew in line with the increase in passengers at just under 9%.

The airline insists that without the blockage of airspace by Bahrain, Egypt, Saudi Arabia, and the United Arab Emirates and the unfortunate situation regarding Air Italy, it would have had a reasonably successful year. In a statement on its website regarding the results, Qatar Airways Group Chief Executive, Mr. Akbar Al Baker, said

I am extremely proud of the teams, departments and subsidiaries across the Qatar Airways Group that have remained agile throughout this tumultuous period and adapted quickly to this new reality, displaying the tenacity, versatility and commitment to excellence so often associated with everything we do. These efforts are why we have become the largest international airline and air freight carrier since the onset of the pandemic, taking over two million people home safely and reliably and carrying over 250,000 tonnes of medical and aid supplies to impacted regions.”

The airline blamed the ongoing blockade as part of its problems and the voluntary liquidation of Air Italy. Photo: Qatar Airways

Next year

However, as it stands, the airline’s losses exceeded 50% of the share capital. In this situation, the airline must hold an emergency meeting to discuss dissolving the company. So, at the meeting on September 24th, the government of Qatar provided a loan of 7.3 billion riyals. Apparently, this capital has been turned into share options.

Altogether, the impact of COVID-19 has not been taken into account in these results. The most significant impact on the airline is no doubt Air Italy’s liquidation and the ongoing blockade.

What do you think of Qatar Airways results? Do you think next year will show an even greater loss? Let us know your thoughts in the comments.