Qatar Airways Group has reported an operating loss of US$639 million for the financial year ended March 31st.
Results were impacted by what the airline brands an “illegal” blockage of Qatari airspace by rival Middle Eastern nations and heavy losses at subsidiary Air Italy.
The United Arab Emirates, which was a key market for the Gulf carrier, along with Saudi Arabia, Bahrain and Egypt, have enforced an economic boycott of Qatar since June 2017.
The GCC members accuse Doha of links to extremist groups and of being too close to Iran - charges Qatar denies.
All have closed their airspace, borders and markets to Doha.
Fuel costs also hit the Middle Eastern carrier hard, surging by 36 per cent over the year.
The annual report reveals Air Italy generated a US$149 million loss for the financial year, of which the Qatar Airways Group share amounts to around half.
Qatar Airways Group took a 49 per cent interest in the parent company of Air Italy in September 2017.
In more positive news, overall revenue and other operating income grew by 14 per cent annually.
Passenger revenue grew by 14.3 per cent with capacity, measured in available seat kilometres, up by 13.5 per cent.
Cargo revenue witnessed growth of 16.8 per cent, with cargo capacity, measured in available tonne kilometres, growing 11.8 per cent annually.
Executive jet revenue also witnessed substantial growth of 18.4 per cent in comparison to the previous year.
“This was nonetheless a challenging year and while it is disappointing that group has registered a net loss of US$639 million – attributable to the loss of mature routes, higher fuel costs and foreign exchange fluctuations – the underlying fundamentals of our business remain extremely robust,” said Qatar Airways Group chief executive, Akbar Al Baker.
“Our success is due to an unwavering belief in our strategy to give our passengers the very best, backed by the perseverance and hard work of our staff.
“I look forward to 2019-2020 with optimism and confidence that our growth will continue, and we will serve even more countries around the world.”
During the financial year, Qatar Airways Group further built its investment portfolio by acquiring five percent of the total issued share capital of China Southern Airlines.
This shareholding sits alongside its existing holdings in airlines such as Air Italy, Cathay Pacific, IAG, JetSuite and LATAM.