FARNBOROUGH, England (Reuters) - Qatar Airways chief executive said the airline was adapting to a regional blockade that has prevented it flying some routes, and that those restrictions would not necessarily push it into the red for the current financial year.
“There is a possibility that we will post also a loss in our current financial year, but it’s only a possibility,” Chief Executive Akbar al-Baker told reporters at the Farnborough Airshow on Monday.
The airline lost access to 18 cities in Saudi Arabia, the United Arab Emirates (UAE), Egypt, and Bahrain in mid-2017, when those four countries cut ties with Qatar after accusing it of supporting terrorism. Qatar denies the charges.
The restrictions mean the company is set to post what al-Baker has said will be “a very large loss” for the financial year ended March 2018, but it has not been published yet. Al-Baker said this would be made public in the coming weeks.
But for the current year, he said the airline might be able to mitigate the impact of the blockade, which includes a ban on using airspace over the four countries, meaning some of its flights have to take much longer routes.
Qatar Airways is starting up to 18 new routes to offset the impact of the blockade, and said it could also make investments to help to boost its results.
“We will try to do investments which will give us returns to mitigate the negative impact on the bottom line of our company,” he said, without giving further details.
Qatar Airways is already an investor in British Airways-owner IAG ICAG.L, for example, owning about a 20 percent stake, and last year bought a stake in Italian carrier Meridiana.
The CEO said he did not see the situation with the blockade improving any time soon.
He also said the airline was only moderately hedged on fuel and might need to hedge more in future as the price of oil rises.
“I am concerned about the oil prices. For the time being Qatar Airways is moderately hedged ... well if it comes I may have to (hedge),” he told Reuters, referring to a potential rise in oil prices.
Reporting by Sarah Young; Editing by Victoria Bryan and Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.