Qatar Airways’ Profit Rises 22% on Long-Haul Routes, Expanded Fleet

by Deena Kamel

Qatar Airways struck a defiant tone and vowed to continue expanding, even as its state owner is sanctioned by neighboring countries in an escalating political standoff that’s threatening to choke the tiny nation’s economy.

The Persian Gulf’s second-largest carrier will introduce a record number of 24 destinations in the next year, including ultra long-haul routes to Santiago de Chile and Rio de Janeiro, the company said Sunday in a statement. To serve the growing network, Qatar Airways will add 66 Airbus SE A350 planes over the coming five years.

Despite the sanctions, “Qatar Airways continues to operate to the rest of its network as per its published schedules with day-to-day adjustments for operational and commercial efficiencies, which is standard airline practice,” the company, led by Chief Executive Officer Akbar Al Baker, said in the statement.

The airline’s ambitious growth plan could be stunted amid an unfolding diplomatic spat over Qatar’s alleged support of extremism. Saudi Arabia, Bahrain, Egypt and the United Arab Emirates last week suspended ties with Qatar, shut down flights and severed air, sea and land links. Flights to cities that normally cross the Arabian Pensinsula, including destinations in Africa, South America and southern Europe are being diverted.

The sanctions come as the airline seeks to turn Doha into a global super-hub to rival the Dubai base of local rival Emirates. Both carriers are competing for high-paying inter-continental transfer passengers. In 2017, Qatar Air expanded its wide-body jet fleet to send more long-haul travelers through Doha, added destinations and bought stakes in key partner airlines.

Net income for the year ended March 31 rose 22 percent to 1.97 billion riyals ($538.7 million), Qatar Air said Sunday. Revenue rose 10 percent to 38.9 billion riyals. The state-owned carrier added 10 destinations and carried 32 million passengers, up from 26.6 million a year earlier.

The airline said growth in the fiscal year was challenged by supplier issues, such as Airbus A350 production delays and engine problems with the A320neo. The airline and Airbus have reached an agreement to convert its remaining A320neos on order to A321neos, according to the statement.

As of March 31, Qatar Air’s fleet of 196 planes included 16 A350-900s and 30 Boeing Co. 787s. The airline expects to get its first Airbus A350-1000 in 2017 and add 29 A350-900s and 37 A350-1000s over the next five years.

Its new destinations in the last fiscal year included Adelaide, Australia, and Yerevan, Armenia. The airline has a 20 percent stake in British Airways parent IAG SA, a 10 percent stake in South America’s biggest carrier, Latam Airlines Group SA, and is buying a 49 percent stake in Italian carrier Meridiana Fly SpA.

 

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