Is Qatar Airways’ Transit Division Prone to Ongoing Gulf Crisis?

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Over the past couple years, Qatar Airways has played a significant role in making Doha a global hub, however excluding the Gulf region the airline’s position as a leading transcontinental carrier is at risk according to an online resource.  Along with the company’s two other major market contenders –Abu Dhabhi’s Etihad and Dubai’s Emirates Airlines- Qutar’s national carrier has found decent amount of success in transit travel business, especially in the Gulf’s central geographic region. But the political trivialities that has recently surfaced between Qatat and its neighboring countries including UAE, Bharain, Saudi Arabia and Egypt are now turning into a severe regional crisis, effecting also most all the major business sectors in region.  Some of the consequences were canceling of several number of carriers and daily flights by Qatar Airways to those countries, further, most Qatari flights now have to take a longer route from around the massive airspace of Saudi Arabia and Bahrain till the heat cools down.

The situation continues to worsen, as the airline company is forced to make drastic changes in flight timings with possible fare hikes. With such limited airspace, the problem is quite unlikely to be solved any times soon. In terms of operation, Qatari flights are now compelled to use airspace under Iran to get to Europe, avoiding the southeastern parts of the Arabian Peninsula. Qatari flight are now taking more time to reach its destinations than it used to earlier.  For example, Qatari planes to North Africa are now taking the airspace over Turkey and Iran and towards the Mediterranean rather than travelling directly over Saudi Arabia and Egypt. Reportedly, flights to Europe continue to stay largely unaffected as they are taking the usual air route over Iran, which is still being used actively avoiding only a small diversion that touches Bahraini airspace. Iran has agreed to allow more number of Qatari aircrafts to use its airspace on a daily basis leading to almost 17% increase in its air Traffic. However, longer routes will result in higher fuel burn eventually leading to increase fares and lower passenger count.

For the company, revenues from pre-bookings and early reservations are likely to take a hit since most passengers will not prefer travelling for longer durations despite getting fast class services. Meanwhile, the transit division of Qatar Airways is expected to be massively impacted. The Airways will lose in considerable share of the UAE and Saudi Arabia market, which may benefit its competitors in the region.

About Nikhil Kaitwade 1 Article
With over 8 years of experience in market research and consulting industry, Nikhil has worked on more than 250 research assignments pertaining to chemicals, materials and energy sector. He has worked directly with about 35 reputed companies as lead consultant for plant expansion, product positioning, capacity factor analysis, new market/segment exploration, export market opportunity evaluation and sourcing strategies.

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