Qatar Airways Group has turned in a huge full-year operating loss, exceeding $500 million, exacerbated by a heavy share of losses at its Air Italy division.
Group passenger revenues were up by 14% to QR34.1 billion and cargo revenues rose to just over QR10 billion for the year to 31 March.
But fuel costs, in particular, hit the Middle Eastern carrier hard, surging by 36% to QR18.1 billion, the highest individual contribution to operating expenses of QR50 billion.
This resulted in an operating loss of almost QR1.85 billion ($508 million), the company’s consolidated accounts show.
Qatar Airways Group took a 49% interest in the parent company of Air Italy in September 2017.
The accounts show that Air Italy generated a QR542 million ($149 million) loss for the financial year, of which the Qatar Airways Group share amounts to QR265.5 million. Air Italy’s revenues for the period reached QR1.2 billion.
Losses from the Italian carrier were only partially offset by a QR50 million share in profits from participation in three other ventures, mainly relating to facilities management.
Qatar Airways Group claims it has “underlying robust financial health” despite the “continued illegal airspace blockade” from a number of states in the Gulf region.
Group chief Akbar Al Baker says the company experienced a year of “achievement in the face of adversity” and “challenges that are unparalleled in the airline industry”.
Qatar Airways Group posted a net loss of QR2.3 billion, which Al Baker describes as “disappointing”, blaming the withdrawal of mature routes, higher fuel costs, and currency exchange fluctuations.
He says the company is optimistic and confident over its prospects for 2019-20, noting that the company has added 31 new destinations since the blockade commenced.