Qatar Airways announced on Thursday that it had swung to a record annual profit in what has been described as the strongest recovery from the devastating effects of the pandemic of any airline so far. The Doha-based carrier said it made a $1.54 billion profit for the 2021/22 financial year after recording a $4.1 billion loss the year before.
Chief executive Akbar Al Baker said the results were an “incredible achievement” and that the aviation industry was now entering an “exciting phase in our road to recovery”.
Along with demand snapping back after travel restrictions were eased, Qatar Airways is also set to benefit from the FIFA Soccer World Cup which will take place in the small Persian Gulf country later this year.
Interestingly, however, the airline failed to make any mention of a potential $1 billion lawsuit with aircraft manufacturer Airbus in a dispute over paintwork defects affecting some of the airline’s A350 fleet.
Qatar Airways says it has been forced to ground at least 21 A350 aircraft due to an accelerated surface degradation defect that causes paint on affected aircraft to crack, bubble and peel away from a special layer of lightning protection.
Along with the losses of indefinitely grounding these aircraft on the orders of Qatar’s civil aviation regulator, the airline has also been forced to lease planes from other carriers including Oman Airways and Cathay Pacific to make up for the shortfall in capacity.
Al Baker has also expressed his displeasure at needing to reactivate some of the airline’s gas-guzzling A380 superjumbos due to capacity constraints as fuel prices soar.
To make matters worse, Qatar Airways has so far been made to pay 97% of Airbus’ costs in London’s High Court legal battle. The airline has also failed to win injunctions against Airbus that would stop the aircraft manufacturer from attempting to deliver newly-built A350s.
Qatar Airways has refused to take delivery of the aircraft and could rack up massive default fees. In addition, Airbus has cancelled an order for new A321neo jets and Qatar Airways has been forced to seek an alternative deal with Boeing.
In its annual report, Qatar Airways makes no mention of the dispute but Al Baker concedes that “further challenges still lie ahead”.
The legal dispute is set to rumble on for at least another year, with a trial not expected to take place until June 2023 at the earliest. Qatar Airways has committed to seeing the dispute through the trial unless Airbus establishes a “root cause” and permanent fix for the paint defect.
