Qatar Airways' annual loss widens on higher fuel costs and currency fluctuations

The carrier posted a steeper net loss of 2.3 billion Qatari riyals in the fiscal year ending March 31

Qatar Airways said its full-year loss widened on higher fuel prices and currency fluctuations. AP

Qatar Airways reported its second consecutive annual loss, citing higher fuel costs and currency volatility, amid an ongoing Arab boycott of its home country restricting its flights.

The state-owned carrier posted a widening net loss of 2.3 billion Qatari riyals (Dh2.32bn) in the fiscal year ending March 31, compared to 252.5 million Qatari riyals a year earlier, Qatar Airways said in a statement on Wednesday. The nearly ten-fold rise in annual losses outpaced the 14 per cent increase in full-year revenues of 48 billion riyals.

The Doha-based carrier faced a "challenging year" and the "disappointing" financial results are attributable to "the loss of mature routes, higher fuel costs and foreign exchange fluctuations," Akbar Al Baker, Qatar Airways Group chief executive, said.

The airline is grappling with a two-year boycott of Qatar by Saudi Arabia, UAE, Bahrain and Egypt, who severed economic ties with the Gulf nation in June 2017. As a result of the dispute, Qatar Airways has been restricted from the airspace of the four countries, causing it to cut about 20 routes and take longer flight diversions, which increased fuel costs and flight times. Compounding the airline's problems are a slowing global economy amid a US-China trade war and geopolitical tensions between the US and Iran.

The carrier faced "challenges that are unparalleled in the airline industry" due to the continued airspace closures, Mr Al Baker said.

He said that "in the face of adversity," the airline still added 11 new destinations, boosted the number of passengers carried, added 25 new aircraft to the fleet and grew its cargo business to the largest in the world.

During the fiscal year, Qatar Airways acquired a five percent stake in China Southern Airlines, giving it access to the fast-growing Chinese market and adding to its existing investments in global airlines. It has minority stakes in Air Italy, Hong Kong's Cathay Pacific, British Airways' parent IAG, and South America's LatAm.

The executive said he was optimistic about the current fiscal year as the airline's underlying fundamentals remain "extremely robust."