QATAR Airways will get fresh funds of 7.3 billion riyals or the equivalent of US$2 billion from the Qatari government. This fund is an aid to minimize the impact of the COVID-19 pandemic which has torn down the world’s aviation industry.
According to Qatar Airways CEO Akbar Al Baker said the funds would be obtained by Qatar Airways by issuing 730 billion new shares to be purchased by the government. This is done after the company has suffered a loss of more than 50% of the share capital.
Qatar adds to the long list of countries that have stepped in to save their national companies. Previously, the governments of Germany and the United Arab Emirates had done the same to save their respective national airlines.
The decisions of these countries came in the middle of tightening travel regulations being pushed back in a number of countries in anticipation of a spike in additional cases. This has made the aviation industry’s recovery slower than expected.
“The loss suffered by Qatar Airways increased due to the lockdown in Italy which made one of its investments through Air Italy a mess. In the 2020 fiscal year, Qatar Airways, which owns 49% shares in Air Italy, finally recorded an operating loss of around 1.4 billion riyals from the investment,” he said.
He added that if there were no extraordinary events [COVID-19 pandemic] in this fiscal year 2020, we should have been able to record a better performance than last year. Throughout the 2020 fiscal year ending in March, Qatar Airways recorded a 47% increase yoy loss to 7 billion riyals. Meanwhile, the company’s revenue actually increased 6.4% yoy to 51.1 billion riyals.
“As of the end of the 2020 fiscal year, this company was recorded to have cash and cash equivalents of 7.3 billion riyals. The company continues to strive to keep cash as best as possible in the midst of a pandemic, one of which is by asking for the delivery of new Airbus units to be postponed,” Akbar Al Baker noted.
The problems facing the airline are actually bigger than COVID-19. Prior to the pandemic, the company also faced operational difficulties due to airspace closures by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since 2017. [business.com/photo special]