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Routes News

01 Aug 2017

BY Gary Noakes

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Qatar: Trouble in transit

As if Middle East politics could not get more complicated, the airline industry has become embroiled in a major row between Qatar and its neighbours. 

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The fallout from Qatar is now being felt further afield

The row centres on Saudi Arabia’s assertion that Qatar supports Islamist terrorism, with the trigger being an alleged $1 billion ransom paid to Islamists in Iraq to release Qatari royals kidnapped while hunting there.

 

Qatar is also said to have allowed the Taliban to have a diplomatic mission and Hamas leaders to speak publicly from Doha. In addition, Saudi Arabia – predominantly Sunni Muslim – is unhappy about Qatar’s dialogue with Shia Iran, as it fears this might provoke minority Shias in the east of Saudi Arabia, where a major oil field sits.

 

Led by Saudi Arabia, the UAE, Egypt and Bahrain suspended flights to Doha by carriers including Etihad, Emirates, FlyDubai, Saudia and Sharjah’s Air Arabia. Qatar Airways’ flights to all its destinations in these four territories are banned and while the airline insisted it was business as usual, passenger flow between these countries – and particularly the transfer traffic they provide – have affected Qatar’s flag carrier more than it will admit.

 

Qatar Airways has 25 flights a day between Doha and the UAE, compared with just four from Emirates, while Qatar Airways offers 20 a day to Saudi Arabia, compared with Saudia’s two to Doha. In fact, these countries are Qatar Airways’ two largest markets.

 

Qatar Airways also has a handful of flights a day to Bahrain and Egypt, but again, more than these countries’ respective flag carriers. OAG estimates the suspension of Qatar Airways services to Saudi Arabia, the UAE and Bahrain amounts to around 406 cancelled flights a week – a little more than 20% of its planned weekly operation, meaning a big chunk off its bottom line, particularly as these countries account for a huge slice of migrant worker traffic.

 

John Grant, OAG senior analyst, says: “The loss of both connecting traffic from the three markets and subsequent impact on demand to the Indian subcontinent is yet to be fully realised, but taking last June as an example, there were 17,688 bookings from Saudi Arabia to India and Pakistan that will have had to find alternative routings at relatively short notice.”

 

Grant said there was “little evidence” that other carriers such as Emirates, Gulf Air or Etihad had added extra capacity from Saudi Arabia to their respective hubs to accommodate those bookings, but that ad hoc changes of aircraft type may be taking place to increase airlift. Qatar has another problem in that airspace around it is largely controlled by Saudi Arabia and Bahrain.

 

This is a throwback to the days when Bahrain’s Gulf Air was dominant and something that, following the latest argument, Doha will be keen to renegotiate.

 

A transit agreement allows Qatar Airways access to international airspace via a single passage through Bahraini airspace but makes for some big diversions to key destinations. Europe-bound flights must divert east over Iran, while North African routes need some major diversions away from Egyptian airspace.

 

Qatar Airways chief executive Akbar al Baker said the blockade was “in direct contradiction to the convention that guarantees rights to civil overflight” and called on the International Civil Aviation Organisation (ICAO) to declare it “an illegal act”; but ICAO has so far not intervened and it will probably take diplomacy at a higher level to sort this one out.

 

The airline claims “90% of flights” were departing within 15 minutes of scheduled time, despite the disruption, and OAG’s Grant said “there had been no significant adjustments to schedules to Europe, Asia and the Indian subcontinent”, although African destinations had been affected by longer routings. So far, only one other country, the Maldives, has cut diplomatic ties with Qatar, although the airline is still flying there twice daily. OAG figures show that Qatar Airways is the third largest carrier to the islands behind Emirates and SriLankan Airlines, so if things escalate, the Maldives’ tourism industry should not be unduly harmed.

 

The stalemate, if it continues, will hit Qatar Airways far more than its competitors, and longer term there is the issue of public confidence. Qatar Airways has built its brand on being a quality airline that relies on transfer traffic at Doha, but passengers have two big alternative hubs nearby. The longer the dispute continues, the more Dubai and Abu Dhabi will reap the benefits.

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