Less than a week ago today and executives at Qatar Airways were making the finishing touches to their 2016/2017 financial results. The Doha-based airline has undoubtedly had a successful year and that’s not the only cause for celebration – The carrier is also celebrating it’s 20th anniversary this year. Or at least it would be celebrating if it wasn’t for the crisis currently enveloping the nation.
The financials and accompanying reports were published Sunday evening and the headline figures look really good. The airline saw revenue increase by 10.4% with year-on- year net profit surge by 21.7% to QAR 1,972 million ($573 million USD). But the question on everyones lips is, how will Qatar Airways respond to the blockade imposed on its aircraft by Saudi Arabia, Bahrain, the UAE and Egypt?
The annual report has been quickly amended to account for the situation and simply states: “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.”
CEO Akbar Al Baker Focuses on the Good News
Which doesn’t really say much at all. Whether Qatar Airways has any hope of matching last year’s stellar performance in 2017/2018 is looking more doubtful as the crisis wears on.
The airline’s CEO, Akbar Al Baker has said of the results: “Over the past 20 years, Qatar Airways has been able to sustain its position as one of the fastest growing airlines in the world because we have proven our commitment to delivering a superior passenger experience.”
He continued: “Our innovative approach to both product and service drives our customer loyalty, which in turn drives our rapid growth.”
Expansion Continues – Ten New Destinations in 2016
The airline has been expanding with breakneck speed. It now serves 150 destinations worldwide and added 10 new points to its route map in 2016. Those destinations included an expansion into Australasia with Adelaide and Auckland (currently the world’s longest flight) joining the network. Also included were Atlanta, Helsinki, Krabi, Marrakech, Pisa, Mahe, Windhoek and Yerevan.
That expansion has been helped along with a 196 strong fleet of aircraft – set to get even bigger. In October, Qatar Airways reached a deal with U.S. aircraft manufacturer, Boeing, for 30 787-9 Dreamliner’s and 10 777-300ER aircraft. The list value of the order is said to be worth $11.7 billion USD. And if things go really well, Qatar Airways has signed a letter of intent to buy up to sixty Boeing 737MAX 8 aircraft.
Airbus Aircraft Deliveries – Qatar Airways “frustrated”
Not everything went so well, however. The airline has been plagued with delays to its planned delivery of new Airbus A350 and A320neo aircraft. Speaking of the delays, the airline said they had “hampered Qatar Airways’ ambitious expansion plans.”
The report goes on to say: “We took the hard but necessary decision to decline the first four A320neo deliveries due to ongoing engine performance issues impacting the promised reliability and fuel burn efficiencies.”
To make up for the shortfall, Qatar Airways has agreed to lease four A350 aircraft belonging to Latin America airline, LATAM. Qatar bought a 10% stake in LATAM last year – a deal that Qatar said was a “natural synergy” with a “shared vision for the future”. The A350 aircraft will be with Qatar Airways for between 6 months to a year.
Happy with IAG, Owner of British Airways, Strategy
Speaking of investments, Qatar Airways also increased its stake in International Airline Group (IAG), the owner of British Airways and new low-cost, long-haul brand, Level. In July, the airline took its stake from 15.24% to 20.01%, saying the decision reflected their “continued support for the ongoing strategy of IAG.”
That’s not all. The airline said Hamad International Airport – the airline’s Skytrax awarded 5-star Doha hub – served 32 million of their passengers last year. The third phase of the massive project is under construction and when completed will add significant capacity to the airport.
But with the Qatar blockade showing no signs of ending anytime soon, we will have to wait and see whether Qatar Airways can continue this remarkable success story. For now, however, the airline continues to hire new staff. Last year, the airline grew by nearly 4,000 employees to 43,113 and recruitment campaigns continue apace – including Cabin Crew events in June and July.
