Qatar Airways reported a net profit of QAR1.97 billion ($540 million), for the 2016-17 financial year, up 21.7% compared to net profit of QAR1.62 billion in FY2016. Profit margin was 5%, compared to the previous year’s figure of 4.5%.
The Gulf carrier achieved the result on revenues of QAR39.4 billion, up 10.4% year-over-year (YOY).
Qatar’s fiscal year 2017 was from April 1, 2016-March 31, 2017.
Over FY2017, the airline carried 32 million passengers, up 19.8% YOY from 26.7 million. Capacity measured in ASKs rose to just over 185 billion, up 21.7% compared to 152 billion last year.
The fast-expanding Gulf airline, which began services to 17 new destinations in the 2016-17 financial year, expects to add a further 24 locations to its route map in 2017-18.
The annual report’s opening statement from CEO Akbar Al baker touched on the recent diplomatic breach with several neighboring Arab states, which has seen Saudi Arabia, the UAE, Bahrain and Egypt close their airspace to the Doha-based carrier.
“Qatar Airways continues to operate to the rest of its network as per its published schedules with day-to-day adjustments for operational and commercial efficiencies, which is standard airline practice,” Al Baker said.
The past financial year had also seen the start of “a joint business agreement with International Airlines Group (IAG) subsidiary, British Airways … with revenue sharing on the trunk London Heathrow-Doha route,” he said, adding, “The joint business enables us to coordinate commercial activities for the benefit of our mutual customers, while at the same time drawing our two companies closer together, thereby strengthening not only our bilateral relationship but the oneworld alliance as well.”
Al Baker noted Qatar Airways had increased its stake in IAG from 15.24% to 20.01% over the course of the year, as well as taking a 10% stake in the LATAM Airlines Group.
“Our appetite for growth during 2016-2017 was hindered by a series of aircraft delivery delays,” he said. “First, the A350—a passenger and crew favorite for its innovative design and bespoke climate controls—experienced production delays over the course of the calendar year 2016, causing us to delay the launch of several new routes and to reduce services to other recently launched cities such as Adelaide,” he said.
“These ongoing aircraft delivery delays have led us recently to enter into an agreement with LATAM Airlines Group in March 2017 to lease four of its new A350 aircraft for a period of six months to one year to supplement our fleet and minimize any disruption for our passengers.
“Our short-haul network was further impacted by the delivery issues with the A320neo, of which we were to be the global launch customer. We took the hard but necessary decision to decline the first four A320neo deliveries due to ongoing engine performance issues impacting the promised reliability and fuel burn efficiencies,” he said.
Several European airlines—like their US counterparts—have complained in recent years of what they describe as illegal subsidies to Qatar Airways, but the CEO noted that in September 2016, the State of Qatar and the European Union (EU) began negotiations of a comprehensive air transport agreement “with the aim of seeking enhanced market access for the airlines of both parties,” Al Baker said.
“The negotiations provide a unique opportunity to strengthen bilateral relations between the State of Qatar and the EU. Qatar Airways welcomes more competition from European airlines that would be able to benefit from a liberalized and open market.”