Qatar Airways struck a defiant tone and vowed to continue expanding, even as its state owner gets punished by neighboring countries in an escalating political standoff that’s threatening to choke the tiny nation’s economy.
The Persian Gulf’s second-largest carrier will introduce a record number of 24 destinations in the next year, including routes to San Francisco, Rio de Janeiro and Dublin and will add 66 Airbus SE A350 planes over the coming five years. But the airline’s ambitious growth plan could be stunted amid the unfolding diplomatic crisis over Qatar’s alleged support of extremism.
Saudi Arabia, Bahrain, Egypt and the United Arab Emirates last week suspended ties with Qatar, severing air, sea and land links. While Kuwaiti officials are mediating in the conflict, those efforts are in question amid conflicting signals from U.S. President Donald Trump’s administration.
“I am extremely disappointed,” Qatar Airways Chief Executive Officer Akbar Al Baker said in an interview published Monday by CNN. The U.S. “should be the leader trying to break this blockade, and not sitting and watching what’s going on and putting fuel” on the fire.
Al Baker’s criticism represents a marked change of tone after the executive praised Trump as “a very wise individual and a very good businessman,” even as the U.S. administration targeted the Gulf region with an attempt to block travel from six predominantly Muslim nations and a ban on carrying on laptop and tablet computers on flights from Middle East airports.
Saudi Arabia and the U.A.E. also restricted airspace to flights linking the Qatari capital of Doha with destinations outside the region. That’s diverted planes that normally cross the Arabian Peninsula, forcing them to make wide detours to reach destinations in Africa, South America and Europe.
The overflight blockade violates International Civil Aviation Organization rules, and Qatar Airways will use “legal channels to object to this,” Al Baker told CNN, adding that he has no intention to “shrink” the airline in the face of growing headwinds.
Qatar Airways has been seeking to turn Doha into a global super-hub to rival the Dubai base of local rival Emirates. Both carriers are competing for high-paying inter-continental transfer passengers. Qatar Air’s strategy has included adding destinations served by wide-body planes that use Doha as a transfer point, as well as buying stakes in key airlines such as British Airways parent IAG SA and South America’s biggest carrier Latam Airlines Group SA.
The issues have yet to show signs of hampering the company. Net income for the year ended March 31 jumped 22 percent to 1.97 billion riyals ($538.7 million), Qatar Air said Sunday. Revenue rose 10 percent to 38.9 billion riyals as the airline added 10 destinations and carried 32 million passengers, up from 26.6 million a year earlier.
Despite the trade and travel blockade, “Qatar Airways continues to operate to the rest of its network as per its published schedules with day-to-day adjustments for operational and commercial efficiencies, which is standard airline practice,” the company said.
–With assistance from Michael Sasso
©2017 Bloomberg L.P.