Qatar Airways receives $ 1.9 billion state aid for survival.
The Qatari government has given a QR7.3 billion ($2 billion) bailout to its loss-making airline Qatar Airways, to help it through the multiple crises it is facing.
It matches the $2 billion in support the Dubai government gave to rival airline Emirates last month to help it weather the shutdown of most international air travel as a result of the coronavirus pandemic.
Like Emirates, Qatar Airways has had to deal with the healthcare emergency, but on top of that it has faced the ongoing boycott of its home country by neighbours Bahrain, Egypt, Saudi Arabia and the UAE since June 2017.
That has forced the airline to cut lucrative routes to those countries and fly longer paths around them to reach other destinations.
Air Italy investment leading to bankruptcy is worsening the Qatar situation
These healthcare and political problems are outside the airline’s control, but other decisions it has made have also contributed to its financial problems.
Its investment in Air Italy has turned sour, with the European carrier going into liquidation in February, costing Qatar Airways some QR1.4 billion ($385 million).
In its financial results for the year to 31 March 2020, released yesterday, the airline reported a total loss of QR7 billion ($1.9 billion), up from QR4.8 billion ($1.3 billion) in losses the year before.
The $2 billion advance from the government was revealed in notes to its results, with the funding converted into 730 million shares.
Qatar Airways have reinstalled already 90 passenger destinations
Group Chief Executive Akbar Al Baker said his airline “continues to remain resilient” and insisted the fundamentals of the business remain strong.
The airline carried 32.4 million passengers in 2019/20, up almost 10% from the year before. It remains to be seen how much lower the figure will be for the current year, given the slump in travelling during the Covid-19 crisis.
Qatar Airways maintained a wider range of services through the pandemic than many of its rivals, never dropping below 30 destinations. It has now increased that to 90 destinations.
Photo: Sorbis / Shutterstock.com
