Qatar Airways just reported a record loss of $4.1 billion for 2020-2021, but that may not sound so bad.
Qatar Airways 2020-2021 financial results
Qatar Airways reported a net loss of $4.1 billion in the last financial year (April 1, 2020 through March 31, 2021), with $2.3 billion being a one-time impairment cost related to the groundings of the Airbus A380 fleets and Airbus A330 fleets.
Only $288.3million of the $4.1billion loss was an operating loss. This loss is 7% lower than the previous financial year. This is quite remarkable considering that the pandemic was just the beginning.
Qatar Airways took a different approach to the pandemic. While most airlines cut their service for long periods of time, Qatar Airways continued flying and added service faster than other airlines. This is a significant advantage for Qatar Airways, particularly as it relies on connecting traffic.
Qatar Airways temporarily reduced its global route network to 33 destinations when the pandemic struck. The airline now has 140 destinations and can fly to cities that were not served before the pandemic.
Here are some interesting numbers from the annual report that compare the 2020-2021 financial years to the 2019-2020 fiscal years:
Qatar Airways employed 36,707 people in 2017 compared with 50,110 employees the year before
Qatar Airways flew 250 aircraft in 2018, compared with 258 in the previous year.
Qatar Airways carried 5.829 Million Passenger, compared with 32.364 Million passengers in the previous year
Akbar Al Baker, CEO of Qatar Airways, had these words to say about Qatar Airways' performance in the past year.
Three words best describe Qatar Airways Group's past year of strength, resilience and commitment. It takes strength to not be afraid to take a risk and avoid difficult decisions; resilience to remain focused and not allow events to overwhelm us; and commitment to never forget our promises to customers and partners.
Qatar Airways' financial results could have turned out to be much worse
Qatar Airways was awarded $3 billion by the government.
Qatar Airways is a government-owned airline. In its financial results, Qatar Airways disclosed that it received $3 billion from the government in equity injections in the last year. The government provided support of $2 billion to the airline in the last financial year.
Although some US airlines have complained about subsidies for the Gulf carriers in the past, I don't think they will have much to complain about this time. The support Qatar Airways received is nothing compared to the American, Delta and United taxpayers.
Qatar Airways was awarded $3 billion by the Qatari government
Bottom line
Qatar Airways reported a loss of $4.1 billion for the last financial year. However, more than half of that is a one time impairment charge to cover the groundings of the A380/A330 fleets. The government of Qatar provided a $3 billion capital injection to the airline, which is not much compared with what we have seen elsewhere in the world.
In the end, almost all airlines experienced a difficult year. I was impressed by Qatar Airways' ability to chart its own course and maintain its network in the face of the pandemic.
What do you think of Qatar Airways' financial results?
