Earlier this week, news broke of a severed relationship between Qatar and most of the Gulf states and other Arab countries.
As of Monday morning, Saudi Arabia, the UAE, Yemen, Egypt, Bahrain, Libya, and the Maldives had cut ties with Qatar, accusing it of supporting terrorism and jeopardising security.
According to UAE’s Ministry’s Foreign of Affairs & International Cooperation, this means the “closure of UAE airspace and seaports for all Qataris in 24 hours and banning all Qatari means of transportation, coming to or leaving the UAE”, which has effectively seen Qatar Airways blocked from some of its biggest markets.
In addition to ceasing flights between these countries, Qatar Airways has been restricted to extremely limited airspace to continue its operations, having a very limited airspace relative to its size.
According to Skift, this means that Qatar Airways will no longer be able to fly to Europe and the US through Saudi and Egyptian airspace.
Ayham Kamel, Middle East and North Africa Director of Eurasia Group, told Skift, “Qatar Airways will need to adjust its business strategy to face the fact that its routes to Europe can no longer fly over Saudi Arabia and Egypt.
“The airline’s profitability will take a direct hit as new routes through Iran and Turkey will include longer journeys and lower demand.”
Basically, this translates to longer trip times, inefficient routings that avoid banned airspace, which means added fuel costs, and then compromised ticket sales.
This could spell very dire terms for Qatar, as it threatens to push anyone looking to fly to Europe and the US via Doha, Qatar, to looking at competitor Middle East airlines instead.
Meanwhile, this could see the likes of Emirates and Etihad actually benefit in the near and medium terms, boosting their bottom lines with the greater route options given the open airspace.
For the Australian market, it comes at a time of expansion down under, with Qatar Airways’ Sydney route launching just over a year ago, its direct Adelaide to Doha route in May 2016, and a spate of other Aussie routes designed to connect Australia to the rest of the world, all via Qatar.
A spokeswoman for Emirates told news.com.au there would be “no impacts” to the airline’s other routes, such as those that connect Australia with Europe and Asia via Dubai, as did Etihad’s spokesperson.
“All customers booked on Emirates’ flights to and from Doha will be provided with alternative options, including full refunds on unused tickets and rebooking to the nearest alternate Emirates destinations,” Emirates said in a statement.
Per Skift, a recent analyst note from geopolitical analysts Eurasia Group, stated, “The crisis will undermine the Qatari economy, increase inflation, raise the risk of a credit ratings downgrade, curtail regional banking activity, and damage Qatar Airways’ commercial prospects.”
Qatar Airways is keeping quiet on the media front, but announced on its website suspended all flights to the Kingdom of Saudi Arabia, UAE, Kingdom of Bahrain and Egypt until further notice.
“All customers booked on affected flights will be provided with alternative options, including the option of a full refund on any unused tickets and free rebooking to the nearest alternative Qatar Airways network destination,” it read.
Abu Dhabi’s state-owned Etihad Airways and Dubai’s Emirates Airline and Flydubai have cut all flights to and from Doha as of yesterday, until further notice.
At IATA’s annual meeting on Monday, CEO Alexandre de Juniac urged the countries to keep the borders open.
“Our industry depends on open borders so we would like the borders to be reopened to travel and trade, the sooner the better, ” he said.
Also, as Skift pointed out, the lack of connecting flights into Doha could be disastrous as the nation not only tries to position itself as a business hub, but also up its tourism ante in the lead up to its hosting of the World Cup in 2022.
Australian aviation expert Geoffrey Thomas told The Australian, “Flights to Australia and Asia fly over the UAE and Qatar Airways will be denied access to fly their aircraft over that airspace.
“They’ll have to do a significant diversion, which will add an hour, maybe more, to flight times.
“It will also significantly impact flight routes to other locations in the Middle East and such diversions might not be economically viable.”