Qatar Airways has reportedly experienced a loss of 2.3 billion Qatari riyals, an equivalence of 639 million dollars for the year ended March 31, 2019.
This was revealed in a statement by the Group Chief Executive Akbar Al Baker who attributed the loss to “higher fuel costs, loss of mature routes and foreign exchange fluctuations.’’
What you should know: This loss is way worse than the last year’s decline when the airline reported a loss of 69 million dollars.
A lingering two-year Qatar diplomatic crisis that began in June 2017 caused Qatari planes to be banned from going to Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Maldives, Yemen, Mauritania, Djibouti, Comoros, Niger, Gabon, Somaliland and Libya. The aggrieved countries not only cut Qatar off their airspace, but also banned Qatar ships from sea routes along Saudi Arabia.
This forced a decline in the airline’s patronage and loss of $639 million dollars. It is also part of the reasons for the heightened costs experienced by the airline.
Countries like Senegal, Chad and Jordan, however, lifted the ban on the airline.
Reason for travel ban: The Saudi-led coalition cited Qatar’s alleged support for terrorism as the main reason for their actions, insisting that Qatar violated a 2014 agreement with the members of the Gulf Cooperation Council (GCC). Saudi Arabia and other countries have criticized Al Jazeera and Qatar’s relations with Iran. Qatar later admitted that it provided assistance to some Islamist groups (such as the Muslim Brotherhood) but denied aiding militant groups linked to al-Qaeda or the Islamic State of Iraq and the Levant (ISIL).
Effect of ban on Qatar Airways: The ban of routes left the airline no choice than to close its offices in four other countries and suspend routes in and out of those markets – cutting off an important source of traffic for its long-haul services. It also suspended plans to add new destinations in Africa due to a blockade imposed on Doha by four Arab states. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt were the major culprits responsible for this.
Regional and international bids to resolve the dispute broke down.