Qatar Airways (QR, Doha Hamad Int’l) might get a capital boost from the Qatari government which would alleviate the effects of likely net loss in this financial year. Such plans were revealed by Sheikh Abdullah bin Mohamed bin Saud al-Thani, CEO of the Qatar Investment Authority (QIA), the Gulf Times reported.
Qatar Airways posted a USD692 million net profit in the financial year ended on March 31, 2017, but, since then, has been hit hard by an embargo imposed by some neighbouring Arab countries. Because of the ban on flights to Saudi Arabia, Egypt, Bahrain and the United Arab Emirates, Qatar has been forced to reallocate nearly 20% of its capacity to other routes.
Because of the blockade, the carrier will likely post a net loss this year, CEO Akbar al-Baker revealed recently to Bloomberg. The airline has lost 20 percent of revenue after the embargo, he added.
Qatar Airways has been investing internationally in large aviation companies, spending billions of dollars in total. In November 2017, it bought 9.6% of shares in Cathay Pacific for USD662 million. In 2016, it spent some USD507 million on 4.34% of shares in IAG International Airlines Group, increasing its stake to over 20%, as well as some USD600 million on 10% of shares in LATAM Airlines Group. The Qatari airline has also acquired a 49% in Meridiana‘s new parent firm, AQA Holding.
According to the newspaper report, the state-owned financial vehicle QIA could also invest in Katara Hospitality, a state-owned hotel owner, developer and manager.
“These are the two companies that we see on our radar in the mid-term. We are trying to create a good portfolio for them”, Sheikh al-Thani said.