Qatar Airway is Qatar-based airline, which is owned by the state. The headquarter of the airline is located in Doha, Qatar. Qatar Airway works in a network of over 150 international destinations that are spread all over the world. These destinations include areas in Europe, Africa, Asia, North America, and South America. The Airline has been operating from its base at Hamad International Airport since it was established in the year 1993.This paper is a review of Qatar Airways financial performance from the year 2012 to the year 2016.
Table 1: Financial Performance of Qatar Airway
|Revenue QAR m||24854||27787||30641||34187||35640|
|Operating Margin %||358||432||570||684||691|
|Net Income ($Mil)||65||69||83||103||445|
|Passenger load factor (%)||78||80||86||88||94|
|Number of passengers (m)||4.1||5.3||8.4||15.8||18|
|Available and realized seat miles|
Source: (Qatar Airways, 2016)
The table 1 above shows data relating to financial performance of Qatar Airways. The financial data represented in table 1 include revenue, operating margin, cost, net income, passenger load factor, and number of passengers.
Figure 1: Revenue
According to figure 1 above, the revenue of Qatar Airways increased steadily from QAR m 24854 in the year 2012 to QAR m 35640 in the year 2016. According to figure 1 above, the revenue of Qatar Airways increased steadily from QAR m 24854 in the year 2012 to QAR m 35640 in the year 2016. The greatest increase in revenue registered by the airline in this period occurred in the year 2013 where the revenue increased by QAR m 2933. The smallest increase in revenue occurred in the year 2016 where the revenue increased by QAR m 1453.
Figure 2: Operating Margin
The figure 2 above represents data relating to operating margin in Qatar Airways between the year 2012 and the year 2016. According to figure 2, the operating margin increased gradually from the year 2012 to the year 2016. The operating margin increased from 358% in the year 2012 to 691% in the year 2016. The highest increase occurred in the year 2014 when operating margin in the airline increased by 138%. The least increase occurred in the year 2016 where operating margin increased by 7%.
Figure 3: Net Income
The figure 3 above represents data relating to the net income of Qatar Airways from the year 2012 to the year 2016. According to the figure, the net income of the airline increased from $Mil 65 in the year 2012 to $Mil 445 in the year 2016. The greatest increase in income was registered in the year 2016 where the net income in the airline increased by $Mil 342. The least increase in net income occurred in the year 2013 and the 2015 where the income increased by $Mil 2 respectively.
Figure 4: Cost
The figure 4 above represents data relating to operational costs of Qatar airline between the year 2012 and the year 2016. According to the figure the cost of operation increased from QAR m 18624 in the year 2012 to QAR m 27114 in the year 2016. The greatest increase in cost in the airline occurred in the year 2014 where the cost increased by QAR m 3783. The least increase occurred in the year 2016 where the cost increased by QAR m 466.
Figure 5: Passenger load factor
The figure 5 above indicates the data relating to passenger load factor in Qatar airways between the year 2012 and the year 2016. The figure shows that the passenger per load increased steadily from the year 2012 to the year 2016. The largest increase occurred in the year 2014 and 2016 where the passenger load factor increased by 6% in both cases.
Figure 6: Number of passengers
The figure 6 above shows the data relating to the number of the passengers who used airline from the year 2012 to the year 2016. According to the figure, the number of passengers using the airline increased steadily from the year 2012 to the year 2016. The greatest increase occurred in the year 2015 where the number of passengers increased by 7.4 million.
The main strategy employed by Qatar Airway in managing the revenue relate to engagement of the customers in decision making process. The airline has realized that customers play a key role in the manner in which the business is run in aviation industry. As a result, the management team at Qatar airways has created channels, which allow the customers to communicate with the airline. The airline collects the views and opinions of the people before making decision. This makes the customers feel valued, and as a result support the airline by using its services. The customers also help in marketing the airline through a word of mouth, which help in attracting new customers. This helps in raising revenue generated every month.
Qatar Airways manage its costs through improving work efficiency. The management at the company understands the importance of minimizing wastage and unnecessary expenditure. Thus, the management team at the company invests on improving efficiency in all areas of operation. For instance the airline has employed highly competent engineers who help in the maintenance of the aircrafts so as to reduce the loss that occur due to unnecessary delays. Additionally, the airline has turned their attention to the aircrafts that has high technology engines, which help in reducing cost of fuel. This helps in reducing operational costs.
The airline manages yield by coming up with different categories of services offered to the customers. The airline has first class, business class, and economy classes, which targets different customers. By coming up with this categories, the airline can offer different experiences to the customers. These categories help in targeting different groups of customers, which help in increasing earnings. Travellers can choose the category that suit their needs and budget, which ensure that no potential customer is restricted from travelling. This help in raising the amount of yield generated by the airline.
The main recommendations on the airline management of financial resources relate to employing external auditors and ensuring effective allocation of resources. It is recommended that the company allocate the right amount of resources to particular areas. This helps in minimizing wastage and improving the performance of the airline. It is recommended that the airline hire external auditors so as to ascertain whether there are errors committed in various transactions. This would help in eliminating similar error in future, which would help the company from incurring losses.
Farhadi, F., Ghoniem, A., & Al-Salem, M. (2014). Runway capacity management–an empirical study with application to Doha International Airport. Transportation Research Part E: Logistics and Transportation Review, 68, 53-63.
Qatar Airways (2016). Qatar airways group annual report. Retrieved from http://www.qatarairways.com/iwov-resources/temp-docs/qatarairways_group_annual_report_fiscal_2016.pdf