TRIED & TESTED

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

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