Losses Soar At Qatar Airways Amid Covid-19 Crisis

Qatar Airways saw its losses more than double over the past year to QR14.9 billion ($4.1 billion), as it battled against extensive traffic and revenue losses caused by the Covid-19 pandemic.

In financial results released today, the airline said passenger numbers had collapsed by more than 80% year-on-year to just 5.8 million, while revenues slumped by 42% in the year to the end of March 2021 to $8 billion.

To help it cope, the airline was forced to turn to its wealthy owner, the Qatari government, for equity injections which ultimately totalled $3 billion. It now says it is rebuilding its operations, with its route network expanding from 33 destinations at the low point of the pandemic to more than 140 destinations now.

Mounting losses

Even before the pandemic began, Qatar Airways had been struggling in the face of a boycott of Qatar by neighbouring countries Bahrain, Saudi Arabia and the UAE. That led to the airline posting a loss of $69 million in the 12 months to the end of March 2018.

Since then losses have continued to climb, to $1.3 billion in 2018/19, $1.9 billion in 2019/20 and $4.1 billion in the most recent period. Total losses over the past four years have now reached almost $7.4 billion.

However, there appears to be some light at the end of the tunnel. Operating losses were 7% less in the year to March 2021 than in the year before, at $288 million, while earnings before interest, tax, depreciation and amortisation (Ebitda) rose by 14% to $1.6 billion.

Qatar Airways adopted a different strategy to its Dubai-based rival Emirates during the height of the pandemic, opting to keep more of its passenger fleet in the air – mainly to allow for repatriation flights for passengers stranded far from home.

Like other airlines, it was also able to tap into heightened demand for freight services – its cargo division more than tripled its daily services at the pandemic’s peak and doubled its revenues year-on-year, although overall there was just a 4.6% rise in freight tonnes handled. Cargo revenue accounted for 63% of total income last year, compared to 19% the year before.

However, it also shed staff, with employee numbers dropping by more than a quarter in the past year to around 37,000. Group chief executive Akbar Al-Baker said in his introduction to the annual report that some of those made redundant were now being rehired.