How Much Money Did Qatar Airways Lose In Its “Most Challenging Year In History?”

Filed Under: Qatar

Qatar Airways has today revealed their annual report for 2017/2018, which covers what the airline calls the most challenging year in its 20 year history.

Qatar Airways says that:

  • Revenue grew by 7.22% compared to capacity
  • Revenue per available seat kilometer grew by 9.96%
  • The airline had a net loss of 252 million QAR, which is about 69 million USD

The airline says that the lower revenue growth was “directly attributable to the illegal blockade since 5 June 2017, which impacted departing seats by 19%.” Cargo revenue increased by 34.4% against capacity, which I guess isn’t much of a surprise, if for no other reason than the need that the country has had for goods due to the blockade.

The airline had to cancel 18 routes due to the blockade, and says that 14 new destinations have been added during the fiscal year. The airline notes that these new routes come with launch costs, which contributed towards the losses.

Qatar Airways’ CEO, Akbar Al Baker, had the following to say:

“This turbulent year has inevitably had an impact on our financial results, which reflect the negative effect the illegal blockade has had on our airline. However, I am pleased to say that thanks to our robust business planning, swift actions in the face of the crisis, our passenger-focused solutions and dedicated staff, the impact has been minimised – and has certainly not been as negative as our neighbouring countries may have hoped for.”

These losses are much lower than I was expecting. As a point of comparison, Etihad posted a 1.5 billion USD loss in the same period, though that stemmed largely from their botched investments in other airlines.

If nothing else, presumably Qatar has spent millions of dollars just on extra fuel, given how much longer many Qatar Airways routes are due to the blockade.

For that matter, I wouldn’t put too much weight into Qatar Airways’ disclosed results here. I’m not saying they’re fabricating anything, but rather when the government owns the airport, airline, and just about everything else, then the financial results for the airline alone may not paint an accurate picture.

The entire press release from Qatar Airways reads a bit like a North Korean victory speech. So before seeing the actual results, I thought to myself “what kind of results would Qatar Airways want to put forward?”

Al Baker has been making the rounds in media for the past year talking about how the blockade is unfair, and about how it will cause the airline to post a lost. So obviously there was going to be a loss, but at the same time they probably don’t want to post a big loss, or else people may be concerned about whether they’ll stay in business, and it will give some satisfaction to their competitors.

I had thought to myself that the airline would post a loss but that it wouldn’t be that big, and it looks like that’s exactly what has happened.

Bottom line

It has been great to see the way Qatar Airways has handled the blockade, and it’s clear that the government stands fully behind Qatar Airways’ strategy (unlike what we see with Etihad and Abu Dhabi). A 69 million USD loss is significantly less than I was expecting, and I’m sure I’m not alone in that.

But I wouldn’t view that loss in the same light as a 69 million USD loss for an airline that isn’t owned by the government, given that the airline isn’t paying “retail cost” for many things in Doha.

What do you make of Qatar Airways’ losses?

  1. I don’t know how many “qmiles” people have (i had about 150.000) before Qatar devalued the program without notice(down roughly 50% in value). Is it possible that they devalued it so the loss would be less at this report…again i don’t know how much that has an actual impact since people don’t earn miles with them by spending on cc.

  2. Haven’t really researched this thoroughly, but from a few data points are collected through the year, it seems Qatar prices have gone up considerably.
    I usually search flights from a couple of European cities to Asia and/or Australia. Qatar used to be consistently very attractive price wise.
    Not any more. Based on my experience they are now priced significantly higher.
    This is not a compaint- just an observation, which could also explain why revenues hve not suffered as much as one would expect.

  3. QMiles are most probably accounted as costs/liability.
    By devaluating them 50%, Qatar managed to half their Qmiles liability by 50%

  4. I’d be fascinated to know what they pay in landing fees and gate rental at Doha. As you surmised, the mideast airlines are expected to be more public with financial reporting so naturally any subsidy must be more cleverly hidden in the cost structure. In a sense, this reminds me of the earlier days of China’s modernization when GDP figures were considered so sacrosanct that other data such as energy consumption became wildly divorced from reality.

  5. @BobNL @Nikola Well, they were throwing them out to customers like maniacs just prior to the blockade. I remember multiple 3x , 4x, 5x QMiles offers. Not to mention the numerous folks that booked the Sake fare multiple times offer while getting Nx Qmiles at the same time. Can’t be too healthy in the long run…

  6. @Lucky – Can we expect a rise in tax prices when booking an award ticket in QR, just lyk what happened with Air Italy?

  7. Qatar airways was for years my favorite airlines flown with them several times in eco, Biz and First class and always enjoining each single flight, but felt so betrayed by time of devaluation miles without any pre-notice and by that time never flown anymore with them even if they sure the best on air as the worst on ground and management. Loss beyond blockade reflects also the extravagancy way to manage and treat loyalty customers.

  8. Why do you still ask “what do you guys make of xyz….”?

    It’s lame and it’s soooo obvious you don’t care what about opinions differing to yours. You do it just for clicks and content, surely most know that? You never answer questions unless they are a one word answer, right?

    What do you make of that comment?

  9. I flew Qatar yesterday, ORD-DOH and then DOH-DEL, both in business class. I have flown them from the US to India many times. I was shocked how empty DOH airport was. Normally it bustling with activity during the banks of connecting flights. The flight to DEL was also only about half full in front and back. I flew Qatar several times before the blockade but this was my first time after the blockade. Couldn’t help but wonder if the unusual ghost town was due to the blockade.

  10. I only fly paid first class so the Qmiles devaluations don’t affect me. Qatar fres have gone up but I’m in a position where it makes no difference for me.

  11. How does anyone believe Al Baker? How can anyone believe this nonsense. He’s a pathological liar. He has been for years. And in a country that is a dictatorship, ruled by one person, born into it, they can chop and change figures around anyway they like.

    And look what they did with their Not So Privileged Frequent Flyer Program, May 27 this year. Overnight, they defrauded their most loyal customers, without notice.

    They devalued the program by 100%, overnight. They upped the cost of redeeming miles by 100% overnight, without notice.

    They added a charge of up to USD 50 to even book an award ticket, per sector no less. Done overnight, without notice. And this applies to even their most loyal customers, their Platinum’s.

    They upped the cost of their fuel surcharges, Overnight, without notice.

    They reduced award availability. Overnight, without notice.

    They cut back certain benefits. Like how dare we book a Business Class Award ticket and expect to use the Qatar Business Lounge in DOH. What are we thinking? No, you scum will get to use the hideous One World Lounge at DOH.

    The Big 3 in America, exposed these frauds for the insanity of the Al Baker and his lies about profitability for years, when all along he was losing money hand over foot.

    So like I said, how would we be expected to believe these lies.

    Just as the author stated “I wouldn’t put too much weight into Qatar Airways’ disclosed results here. I’m not saying they’re fabricating anything, but rather when the government owns the airport, airline, and just about everything else, then the financial results for the airline alone may not paint an accurate picture”. And this “A 69 million USD loss is significantly less than I was expecting, and I’m sure I’m not alone in that”.

    Qatar airways can kiss my proverbial. Screw them and their lies and their fraud.

  12. Just expect a much nicer annual loss in the next year. Because actually most plane are flying half empty (or worst).

    Betray PC member, higher fare price, complicated redemption, impossible to solve problem on the phone… the effect will be sensible…soon.

  13. @ Chris

    “Because actually most plane are flying half empty (or worst)”

    Really? Not the ones I’ve been on – 10 flights in the last 6 months. Every Qsuite flight was completely full in J (didn’t check out the other parts of the plane). Every non-Qsuite flight at least 80%+ full in J.

    @ Robbo

    If your post was a little more grammatically correct I’d assume you were a PR agent employed by the US3. But citing those paragons of truth as evidence of anything is, well, let’s be charitable and say you are easy to persuade. Presumably you also don’t think that US tax breaks for the US airlines are the same as “subsidies”…?

  14. QR only publishes figures for the entire group. QR airline was never profitable! interestingly, due to the deal made with USA, QR needs to publish their annual report under ISA accounting rules. Nevertheless, by hiding the airline within many other (non) related group companies, QR can easily disguise their true disastrous financial performance. Where are the hundreds of millions of dollars accounted for their sponsoring contracts with the Football Club Bayern Munich and other clubs? This annual report does not reflect the true circumstances of the airline. Check it out for yourself:

  15. @ The nice Paul

    Qsuite is 22 planes only, the QR fleet is 193 planes. People crave for trying Qsuite (and Qsuite are deployed in some major routes, it’s evident to understand why it’s rarely empty.

    I agree some routes are doing well like SIN or US/LON (and some other), but some are just NOT doing well, just read Flyertalk about it, many report 2-3 passengers on J. I fly some of these routes too, I am not flying US.

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