TRIED & TESTED

Qatar is wrestling with Mid­dle East travel re­stric­tions but the dis­pute is also af­fect­ing re­gional and tran­sit trav­ellers, reports Dominic El­lis

Business Traveller (Middle East) - - Front Page -

Westin Jakarta; Hy­att Re­gency Am­s­ter­dam

It seemed like a reg­u­lar Monday in Ra­madan. The roads and diary were qui­eter than your av­er­age week­day – but then the news broke. Saudi Ara­bia, the UAE, Bahrain and Egypt had cut ties with Qatar in a co-or­di­nated move, ac­cus­ing it of sup­port­ing Is­lamist mil­i­tants and caus­ing re­gional in­sta­bil­ity.

Travel al­ways has a propen­sity to sur­prise, whether it’s health warn­ings, travel alerts or air­craft main­te­nance is­sues. Air­lines are well versed in ver­sa­til­ity, ro­tat­ing air­craft and ad­just­ing ca­pac­i­ties. But in this case, airspace re­stric­tions cou­pled with the coun­try bans had a sub­stan­tial im­pact on travel.

Busi­ness and pol­i­tics tend to fly side by side yet this dis­pute re­minds us that when it comes to gov­ern­ment-to-gov­ern­ment re­la­tions, the two are firmly in­ter­linked. The four coun­tries have sent Doha a list of 13 de­mands, in­clud­ing clos­ing Al Jazeera tele­vi­sion and re­duc­ing ties to Iran, and given Qatar 10 days to com­ply. QUICK ES­CA­LA­TION A re­gion syn­ony­mous with non-stop avi­a­tion growth had to ad­just to a new re­al­ity as events quickly es­ca­lated. Mea­sures in­cluded a block­ade of land, sea, and air ac­cess and the ex­pul­sion of Qatari of­fi­cials, res­i­dents, and vis­i­tors from af­fected coun­tries. In the UAE, Qatar Air­ways’ shops closed and its web­site was blocked. Pas­sen­gers re­booked flights, planes were re­de­ployed, pi­lot and crew ros­ters had to be re­worked and airspace cor­ri­dors re­con­fig­ured, adding time and fuel costs for air­lines (see right). As the re­stric­tions swung into ef­fect on June 6, Emirates, Qatar Air­ways, Eti­had Air­ways, fly­dubai and Air Ara­bia flight were pre­vented fly­ing be­tween the UAE and Qatar. Qatar Air­ways, which flew to five UAE points – Dubai In­ter­na­tional, Dubai World Cen­tral, Abu Dhabi, Sharjah and Ras Al Khaimah – would have been im­pacted the most, although Emirates had sig­nif­i­cant ca­pac­ity com­mit­ments too, hav­ing in­tro­duced an A380 on the route last De­cem­ber. The DXB shut­tle was such a key route for QR that, on sev­eral oc­ca­sions, I made the short hop on one of its 254-seat B787 Dream­lin­ers. The UAE mar­ket has be­come vi­tal to Qatar not just for in­bound busi­ness travel but tran­sit traf­fic onto its global net­work; the air­line was on av­er­age op­er­at­ing 25 flights per day to the UAE, 20 to Saudi Ara­bia and six to

Bahrain prior to the sus­pen­sion. The im­por­tance of tran­sit traf­fic for all its routes can’t be over­stated since it ac­counts for 90 per cent of Qatar Air­ways’ traf­fic through Ha­mad In­ter­na­tional Air­port.

The dis­pute car­ries many myr­iad knock-on ef­fects; less trav­ellers through air­ports means less spends in F&B and duty free venues, while re­duced pas­sen­gers into Doha re­sults in less air­line and visa im­mi­gra­tion fees – a sig­nif­i­cant source of rev­enue when you con­sider it col­lects QR100 a head.

LONGER FLIGHTS FOR QR PAS­SEN­GERS

Airspace re­stric­tions have led to longer flight times for Doha pas­sen­gers, ac­cord­ing to fligh­tradar data. With UAE and Saudi airspace no go ar­eas, Qatar Air­ways air­craft now have to en­ter a nar­row cor­ri­dor through Bahrain airspace and into Ira­nian airspace be­fore fly­ing onto their des­ti­na­tions. Two ex­am­ples of routes that have been af­fected:

The dis­pute car­ries many myr­iad knockon ef­fects; less trav­ellers through air­ports means less spends in F&B and duty free venues, while re­duced pas­sen­gers into Doha re­sults in less air­line and visa im­mi­gra­tion fees. Doha-Khar­toum Pre­vi­ously 3hrs 30 min­utes, now 5 hrs 55 min­utes Doha-Sao Paulo Pre­vi­ously 14 hours 17 min­utes, now 16 hours 45 min­utes with a re­fu­elling stop in Athens

HO­TEL IM­PLI­CA­TIONS

While the ma­jor­ity of fo­cus has been on Qatar, trade is a two-way street. Every plane that doesn’t fly into Doha and doesn’t fly out has busi­ness re­pur­cus­sions. Re­flect­ing the sen­si­tiv­ity of the sit­u­a­tion, few op­er­a­tors were pre­pared to com­ment. Pas­cal Gau­vin, Chief Op­er­at­ing Of­fi­cer for IMEA IHG, said it was too early to as­sess the im­pact and de­fine next steps but added IHG is a global com­pany “and we are used to work­ing with changes in our op­er­at­ing con­texts”.

RAT­ING DOWN­GRADES

S&P Global down­graded Qatar’s rat­ing on June 8 to a neg­a­tive credit watch rat­ing (AA-) and pre­sented two sce­nar­ios which will af­fect Qatar’s bank­ing sys­tem. In the first, a ‘con­ser­va­tive’ as­sump­tion is that its banks have “the ca­pac­ity to with­stand such out­flows” and no bank will re­quire ex­ter­nal sup­port. But the other is more se­vere.

“We have tested Qatari banks’ re­silience to the with­drawal of 25% of de­posits from other coun­tries in ad­di­tion to all at­trib­ut­able to the GCC… our re­sults show that banks have the ca­pac­ity to with­stand such a sce­nario, but in this case two banks may need to use their in­vest­ment se­cu­ri­ties port­fo­lio to do so.” n

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