Tuesday, October 19

Qatar Airways Reports $4.1 Billion Loss on Super Jumbo Writedown


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(Bloomberg) — Qatar Airways reported an annual loss of 14.9 billion riyals ($4.1 billion) after writing down the value of its grounded Airbus SE A380 super jumbo fleet.

The state-owned Gulf carrier attributed $2.3 billion of the loss for the year ended March 31 to impairment charges on the fleet of 10 A380s, as well as some smaller A330 models, it said Monday.

“It is not commercially or environmentally justifiable to operate such a large aircraft in the current market,” Qatar Airways said of the four-engined, double-decker A380, which can carry more than 500 passengers at a time. The company added that it doesn’t expect international travel to return to pre-Covid 19 levels until 2024.

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Qatar Airways is unique among large, long-distance carriers in that it continued to operate its extensive route network throughout the pandemic, even expanding it in places like the US, Brazil, Canada and Nigeria. The Doha-based company’s air-cargo business was able to double revenue, capitalizing on booming rates by filling dedicated freighters and the holds of otherwise empty passenger flights.

Still, while it didn’t receive any salary support or grants, the carrier said it received $3 billion in equity funding from the government. It had previously disclosed $2 billion of that amount.

A380 Plans

Prior to the pandemic, Chief Executive Officer Akbar Al Baker said Qatar Airways would retire its A380 fleet starting in 2024. The planes were grounded earlier than expected when the health crisis hit last year. The carrier hasn’t said definitively whether they will be reactivated .

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The Doha-based airline was already battling a now-ended boycott led by Saudi Arabia when the pandemic gutted travel, and it continued to keep routes open after the health crisis hit. Neighboring rival Emirates Airlines, by contrast, pared flights from its Dubai hub to conserve cash.

Qatar Airways is currently operating services to 140 destinations and is launching nine new routes, it said in the statement.

“We adapted our entire commercial operation to respond to ever-evolving travel restrictions and never stopped flying, operating a network our passengers and customers could rely on,” Al Baker said in the statement.

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