Qatar Airways profit up 21.7% amid uncertainty surrounding Gulf operations

Qatar Airways has posted a 21.7 per cent increase in net profit for 2016 amid continued uncertainty about its Gulf operations.

The state-owned carrier has been hard hit by the closing of air links and airspace by Arab states including Saudi Arabia, the UAE, Bahrain and Egypt for Qatar’s alleged links to terrorist groups.

Net profit for the year ending March 31 stood at QAR1.97bn (538.7bn) from the QAR1.6bn ($439m) disclosed in Qatar Airways’ first public financial results last year.

Read: Qatar Airways announces $440m net profit for 2016

The carrier also reported a 10 per cent increase in revenue to QAR38.9bn and a 3.4 million rise in passengers from 26.6 million in 2015 to 32 million last year after adding 10 destinations.

Qatar Airways CEO Akbar Al Baker last week described the carrier’s operations as “business as usual” after the closing of air links forced the carrier to charter planes to ferry hundreds of passengers home to Doha and issue refunds to many others.

However, in further comments during an interview with CNN, he appealed to the UN agency that administers the Chicago convention to guarantee civil overflights, the International Civil Aviation Organization (ICAO), to get involved.

“We have legal channels to object to this,” he said. “ICAO… should heavily get involved, put their weight behind this to declare this an illegal act.”

The Centre for Aviation estimates that prior to the suspension, Qatar Airways was on average operating 25 flights per day to the UAE, 20 to Saudi Arabia and six to Bahrain.

It said the carrier would be forced to spend more time and fuel on its remaining routes due to the airspace restrictions.

Read: GCC rift: What kind of an impact are regional airlines facing?

The airline’s offices have also been shut down in Saudi, Bahrain and the UAE in a signal normal services will not be resuming for some time.

Read: Qatar Airways ordered to shut down its UAE offices

During the CNN interview, Al Baker criticised the closing of the offices and said 18 destinations were now out of bounds for the airline.

“It is actually a travesty of civilised behaviour to close airline offices. Airlines offices are not political arms,” he said. “We were sealed as if it was a criminal organisation. We were not allowed to give refunds to our passengers.”

While there was no mention of the access issues in its financial results as they took after the end of the financial year, Qatar Airways said its 2016 growth was impacted by production delays to the Airbus SE A350 and engine problems with the A320Neo.

Read: Qatar Airways CEO: ‘I have to scream at Airbus to get my planes faster’

Regarding these issues, Qatar said it had reached an agreement to convert its remaining A320neos on order to A321neos.

The airline previously announced plans to launch a total of 15 new destinations in 2017-18 including its ninth and 10th destinations in Saudi Arabia, Tabuk and Yanbu.

Expansion into the two cities will likely have been suspended or cancelled as the diplomatic rift between Qatar and Saudi Arabia continues.

Read: Qatar Airways to launch flights to Rio, Las Vegas as it expands its 2017-18 network