Qatar Airways Group’s net profit increased more than four-fold in its last financial year as the airline cut costs and expanded routes, which offset foreign currency movements and growth of operations.
The group, which owns flag carrier Qatar Airways, posted 1.6 billion Qatari riyals in net profit for the financial year that ended on March 31, a 328 per cent increase on the 374 million riyals achieved the previous year.
This is the first time the group has published its financial results. US and European carriers have criticised Qatar Airways and other Arabian Gulf airlines for allegedly receiving billions of dollars in state subsidies – a claim the Gulf carriers have denied.
During the past financial year, the group reduced its expenses by 1.5 per cent and increased its cash and bank balance to 12bn riyals from 5.5bn riyals, despite a significant growth in operations and an adverse movement in foreign currency exchange.
The Qatari airline added 13 new destinations during the fiscal year to the end of March. These include Amsterdam, Boston, Los Angeles and Zanzibar. It plans to add 17 destinations this financial year, which include Auckland, Helsinki and Pisa.
Qatar Airways changed its strategy last year, when it acquired a stake in IAG, the parent company of British Airways and Spanish carrier Iberia. In May, it raised its stake in IAG to 15 per cent. Bloomberg has reported the airline could boost this to 20 per cent. IAG has lost a third of its market value after the UK voted to leave the European Union.
Akbar Al Baker, the group chief executive, is also considering the acquisition of a 25 per cent to 49 per cent stake in the Moroccan flag carrier, Royal Air Maroc. Mr Al Baker envisions turning the Casablanca base of Royal Air Maroc into a hub that connects north and west Africa.
Qatar’s Hamad International Airport, the base of Qatar Airways, served 30 million passengers last year. But competition between Gulf airport hubs will become fierce with the opening of Oman’s new airport.
“Hamad airport will compete with the new airport in Muscat, which will open from 2018 to 2020,” said Mark Martin, the chief executive of Martin Consulting in Dubai.
The Gulf airlines and their transit hubs are competing aggressively. Dubai International has, however, retained its rank as the world’s busiest airport for international passenger traffic and expects to receive 85 million passengers this year.