The chief executive of Qatar Airways, Akbar Al Baker has revealed his airline will finally publish its annual financial results for 2017 in around two weeks time. Baker disclosed the timeframe while speaking at the International Aviation Summit which is being held in New Dehli, India where he also discussed Qatar’s plans to expand its reach into the Indan aviation market.
In April, the outspoken chief executive said Qatar Airways had made a “substantial loss” last year. He cited a Saudi-led blockade on Doha in which the airline lost access to 18 cities throughout the Middle East and Egypt as the main factor in Qatar’s poor performance.
The one year anniversary of the blockade was reached in June without any sign of the dispute being resolved anytime soon.
Speaking at a Turkish airshow earlier this year, Baker said his airline’s operating costs had risen substantially while revenues had dropped as Qatar adjusted fares in order to attract passengers back to the carrier.
In recent months, however, Baker has suggested his airline will perform far better in 2018 while refusing to provide any detail on the size of last year’s loss. The financial results will likely be audited by a trusted third party – part of Qatar’s deal with U.S. authorities to ease the potential of restrictions on the airline.
Qatar’s Indian expansion
Addressing journalists at the summit, Baker said India was an important market for Qatar Airways and one which the airline wanted to expand into even further – driven in part by the country’s potential to become the third largest global aviation market by 2025. In April, India’s aviation market recorded its 44th straight month of double-digit growth.
As it stands, the Doha-based airline already operates 102 flights per week to 13 destinations across India.
“India is on track to become the third largest global aviation market by 2025 and we are determined to further grow our presence in the Indian market by offering passengers the award-winning quality of service they deserve,” explained Baker as he addressed the audience.
But Qatar’s plans to open up an Indian domestic subsidiary has been anything but plain sailing. The airline has wanted to expand into the cutthroat Indian aviation market for some time, driven in part by a change in rules which now allows 100% foreign ownership of an Indian-based airline – up from the previous 49% limit.
Baker, however, reportedly told journalists that the foreign ownership rules were “confusing” and plans for the government-owned Qatar Investment Authority to take a minority stake in an Indian domestic airline had been scuppered by local authorities because the sovereign wealth fund owns Qatar Airways.
What options does Qatar have?
“We really don’t know what is allowed,” Baker was quoted by Reuters as saying at the event, although there is potential for Qatar to take a minority stake in existing domestic carrier IndiGo. Qatar could also partner with an Indian company to set up a new Indian-based airline – a little like Singapore Airways has done with Tata with Vistara.
Baker even suggested he would be willing to take on debt-ridden state-owned airline Air India. The Modi government recently abandoned an attempt to offload the ailing carrier when zero offers were received from potential investors. Air India is currently saddled with around $5.1 billion worth of debt which the Indian government is desperate to offload.
For the wealthy State of Qatar, the debt wasn’t so much an issue Baker explained but he would only be interested in taking on the core airline business and not subsiderary entities like its ground handling operation.
Despite a fast-growing aviation economy, Indian airlines have struggled to make a profit with fare wars, high taxes and one of the most expensive countries in the world for jet fuel cutting into profits. Loss-making Jet Airways which is part-owned by Etihad Airways is set to unveil a turnaround plan, while Air India will reportedly soon receive a $120 million capital investment from the Indian government.