Carrier blames pandemic, liquidation of shares in Air Italy, and boycott by Gulf neighbours for near doubling of losses.
Qatar Airways has received about $2bn in state aid to weather the COVID-19 pandemic, as it posted significant annual losses after enduring one of its “most difficult years”.
The Qatari state-owned carrier said the combination of the pandemic, a boycott by Gulf neighbours, and the liquidation of 49 percent-owned Air Italy – which announced its bankruptcy in February – had resulted in a near doubling of losses.
This brought the carrier’s net loss for the year to end-March to 7 billion riyals ($1.92bn).
“Qatar Airways is familiar with facing exceptional challenges; however, 2019-20 has been one of the most difficult years in the airline’s history,” the carrier said in a statement.
The airline confirmed that Qatar had joined a list of governments that have stepped in to support their national carriers through the coronavirus shutdown, which has pummelled global travel and the aviation industry.
The carrier will issue 730 million shares to the government after receiving “an advance of 7.3 billion riyals” ($2bn) after annual losses exceeded 50 percent of share capital, it said in its annual report.
“If not for the exceptional circumstances of fiscal year 2020, our results would have been better than the year before,” said the airline’s chief executive, Akbar al-Baker.
The report also said over the 12 months, revenue increased 6.5 percent to 51.1 billion riyals ($14bn), seat capacity increased by 3.2 percent, and freight handled rose by 2.8 percent.
The coronavirus pandemic halted global aviation for months, which has only begun to pick back up. The true impact of the pandemic on Qatar Airways is unclear as global lockdowns continued after its financial year ended in March.
The pandemic compounded an already difficult environment for Qatar Airways.
Since mid-2017, the airline has been banned from the airspace of Saudi Arabia, the United Arab Emirates (UAE), Bahrain, and Egypt after those countries imposed a land, sea, and air blockade, forcing it to fly longer routes.
Qatar Airways is the second-largest airline in the Middle East after the Dubai-based Emirates, operating a modern fleet of 250 aircraft, although some remain grounded during the pandemic.
In July, Qatar won a ruling at the International Court of Justice in its fight against airspace restrictions by Saudi Arabia, the UAE, Bahrain, and Egypt.
It said it will seek $5bn in compensation from the Arab states for closing their airspace to the flag carrier.