Heavy losses weaken Qatar Airways: state to inject $2 billion
Qatar Airways announced it will receive $2 billion (RM8.3 billion) in state aid after suffering significant annual losses in the financial year 2019-2020. However, in exchange for financial help, the airline will issue 730 million shares to the government.
According to the annual report of 2019-2020, Qatar Airways will issue 730 million its shares to the government after receiving $2 billion in state aid. The carrier revealed that its annual losses exceeded 50% of share capital.
The flag carrier of Qatar announced that the liquidation of Air Italy, which announced its bankruptcy earlier in February 2020 and which 49% of the stake was owned by Qatar Airways, had a negative impact on the airline’s finances.
The economic downturn of the COVID-19 pandemic since March 2020, as well as Qatar’s diplomatic crisis ongoing since 2017, resulted in the airline’s $1.92 billion (RM7 billion) net loss for 2019-2020.
Akbar Al Baker, the CEO of Qatar Airways, acknowledged that despite the carrier was familiar with facing challenges, the year of 2019-2020 “has been one of the most difficult years in the airline’s history”, said Baker in a press release on September 27, 2020.
The pandemic only deepened Qatar Airways’ financial struggles.
The Arab countries in the Persian Gulf region such as Saudi Arabia, Egypt and the United Arab Emirates (UAE) cut diplomatic ties with the country and implemented border as well as airspace restrictions in June 2017.
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