Qatar Airways to skip staff bonuses due to Iran war impact

[DOHA] Qatar Airways will skip handing out bonuses to almost 60,000 workers this year after the US-Israel war on Iran forced the carrier to cancel tens of thousands of flights and lose out on billions in revenue.

The decision was made because of the ongoing geopolitical situation in the Middle East that continues to “significantly affect” Qatar and the group, according to a memo sent to employees this week that was seen by Bloomberg. The decision “prioritises long-term stability” as uncertainties prevail, according to the memo.

Though other carriers have also scaled back bonus payments recently, the extent of the cutbacks at Qatar Airways stand out. The state-owned carrier has been the most impacted airline in the region by number of suspended flights and is currently operating less than 60 per cent of its usual schedule, according to data from Flightradar24.

Qatar Airways, which saw profit drop about 10 per cent to 7.08 billion riyals (S$2.5 billion) in the latest financial year, did not immediately reply to a request for comment.

The Gulf carrier has spent decades positioning itself at the centre of global air travel, alongside giants like Dubai’s Emirates, and built its hub in Doha into a key stopover point for long-haul trips. So when disruptions hit in February, a delicately mapped out schedule for passengers, crews and aircraft got tossed out, stranding tens of thousands of travellers and hundreds of planes.

Bonuses for staff at Qatar Airways, which have only been paid out in the last three years, can range from a couple of weeks of compensation for non-managerial staff to months for executives and vice-presidents, according to people familiar with the matter.

Elsewhere, Emirates employees received a smaller bonus this year than they did the previous year, people familiar with the matter have said. Singapore Airlines handed out around 22 weeks as a bonus, local media reported.

Qatar Airways has been looking for ways to preserve cash over the past few months, contacting several aircraft lessors to potentially defer or reduce rental payments, people familiar with the matter have said.

The conflict is the first major challenge for Qatar Airways’ new chief executive officer, Hamad Ali Al‑Khater, who’s only been in his role for a few months. Al-Khater has faced the challenge of managing the fallout from dislocated planes and crews, unprecedented airspace closures, and the cost of maintaining a global business at a time of greatly diminished commercial operations.

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While the prolonged airspace closure is unprecedented, the airline is familiar with having to navigate last-minute disruptions. In 2017, an overnight decision by neighbouring countries to sever bilateral ties with Qatar meant the carrier had to rush to redraw its route map to cut some of its busiest destinations like Dubai and Riyadh and avoid the airspace over several nations. BLOOMBERG