Qatar Airways returned to profitability for the first time since 2017 and reported its highest-ever profit for FY21/22 at QAR 5.6 billion ($1.54 billion). According to the airline, this is 200 percent above its highest historical profit in 2016 and comes in a year described as “the most difficult period ever in the global airline industry.” Qatar attributes its success to an agile strategy and evolving market opportunities. Qatar Airways returns to profitability after four years.
The QAR 5.607 billion net profit compares to QAR -14.855 billion in FY20/21, the first year of Covid. The last time Qatar Airways was profitable was in 2017 when it reported a QAR 2.795 billion net profit, while 2016 produced a QAR 3.048 billion profit. In the latest financial year, the carrier posted a QAR 10.831 billion operating profit versus QAR -1.050 billion in the previous year. EBITDA was QAR 17.725 billion versus QAR 5.897 billion.
Total revenues increased to QAR 52.129 billion from QAR 29.287 billion and reflect the growing network to 142 destinations. Passenger revenues were QAR 24.675 billion (2020/2021: QAR 7.971 billion) as Qatar carried 18.5 million passengers. Cargo revenues were QAR 23.036 billion (QAR 18.491 billion) as the airline carried three million tonnes of cargo.
Expenses were also up to QAR 41.474 billion from QAR 30.449 billion, of which fuel accounted for QAR 12.4 billion versus QAR 5.4 billion in the previous year. This reflects higher fuel and jet prices and the effect of the expanding network. Qatar ended the year with QAR 34.390 billion in equity compared to QAR 31.824 billion in 2020/2021. Net debt was QAR 86.167 billion, up from QAR 85.154 billion.
Some of Qatar Airways’ parameters in its FY21/22 annual report. (Qatar Airways)
In the annual report, Group CEO Akbar Al Baker stresses that Qatar Airways has been “one of the few global airlines to have never stopped flying” during the pandemic. (…) Our mixed fleet of new and efficient aircraft has enabled us to expand services in line with increased passenger demand. (…) Not only has our strategy for business transformation resulted in a more streamlined, efficient, and fit-for-purpose operation across the business, we have also achieved a significant lowering of our costs and embraced new, more evolved ways of working.” Indeed, despite growing its operations significantly since 2018, total expenses last year were slightly below the QAR 42.249 billion from four years ago.
Qatar Airways grew its share of international revenues passenger kilometers (RPKS) from 4.4 to 7.5 percent. Contributing to this have been its expanded network into Africa (Abidjan, Lusaka, Harare, Kano, and Port Harcourt) as well as the route between Doha and Seattle, which it launched in January 2021. Growth could have been even higher if not for “significant challenges to our fleet capacity”, an indirect reference to the quality issues of the Airbus A350 fleet of which 23 aircraft remain grounded. Qatar compensated for the missed capacity by re-introducing its fourteen A330s and four A380s to service. The total fleet stood at 257 aircraft at the end of the financial year.
Qatar positive of outcome legal case with Airbus
On the Airbus legal case on the A350 quality issues, which also includes the airframer’s decision to terminate the order for fifty A321neo’s on cross-default, Qatar says in its financial statements: “The Company’s assessment of its prospects in both sets of legal proceedings remains extremely positive but as with any case, there are litigation risks. The financial impact of the grounded aircraft is yet to be fully assessed and any judgment made to the detriment of the Company may as well have a material adverse effect on the Group’s financial position or performance.” The joint trial is scheduled for June 2023, with Qatar saying it doesn’t expect final judgment until August that year.
In its outlook for 2022/2023, Qatar says it will “fulfill the significant upsurge in demand for international air travel that we have seen during the 2021/2022 financial year. The airline remains optimistic and ready to resume and launch more routes as the travel market rebounds in line with the worldwide vaccine roll-out and ease of entry restrictions for vaccinated travelers around the world.”
The airline will continue its strategic investments in other airlines, which include International Airlines Group (25.1 percent), Cathay Pacific (9.99 percent), LATAM (10 percent), and China Southern Airlines (3.62 percent).
