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Old 30th Mar 2020, 01:51
  #30 (permalink)  
krismiler
 
Join Date: Jul 2010
Location: Asia
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The three year long blockade of Qatar and the loss of important regional destinations, together with the additional costs of extended routings around nearby countries have had an impact on the airlines finances even before this pandemic. With a loss of US$639 million for the financial year ending 31 March 2019, and this FY likely to be much worse (even though the flight cancellations only affect a few weeks of it), together with the certainty of massive further losses next FY even if a cure for the virus is found tomorrow, the future is far from clear.

With no domestic routes, restrictions on countries nearby and little origin/destination traffic the airline is almost totally reliant on connecting flights through Doha which puts it in a very weak position. Many airlines enjoy a domestic network and a market for which their country is either the origin or destination, enabling them to charge a premium for non stop flights during high season and switch to being a hub for connecting traffic during the low season.

As a long haul premium hub airline, recovery is likely to be delayed, the domestic and regional low cost airlines will be the first to benefit when things pick up again. It's a real pity as I always enjoyed flying on Qatar Airways and found their fares to be very reasonable compared to similar competition. They certainly deserved their 5* rating.

With the country mainly reliant on oil and gas, the prices of which are likely to remain depressed for the near future, attention turns to the reserves. Basically how much is in the kitty, the degree of liquidity (not easy to get a good price selling a luxury hotel at the moment) and the willingness of the government to pour in money.

Cathay Pacific and Singapore Airlines are integral to their city states and have to be kept going. CX may well be taken over by Air China and SIA is receiving a government bail out. QR may not be so fortunate. The unmentionable airline nearby shows that a government's willingness to keep on pouring billions of dollars into a black hole can't be taken for granted. CX and SIA are ingrained into the economies of Hong Kong and Singapore and are responsible for jobs in other sectors such as tourism, the net economic effect is significant in these cities.

Whereas Singapore without SIA is unthinkable, Qatar without QR as a major world airline isn't. Without a sustained recovery soon and significant state backing, QR is likely to end up like Saudi Arabian Airlines or Kuwait Airways. ie much smaller and catering primarily to locals and migrant workers rather than a major hub and spoke airline.
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