The restoration of ties between Saudi Arabia, the UAE, Egypt and Qatar is a breakthrough not only for political relations but also for airlines, airports and business aviation firms operating in the Gulf.
While the reopening of Saudi and Egyptian airspace to Qatar is only the first step, the move hints at the beginning of a full normalisation of relations, which could cause a considerable shift in the region’s aviation landscape.
You only have to look at the rapid impact that the Abraham Accords has had on the regional aviation sector to get an idea of what the Qatar deal might mean or the Middle East. Just weeks after Arab states and Israel agreed to normalise relations, airlines including Etihad and Emirates announced plans to launch routes to a market which has been completely cut off until now.
And we saw Gulf Air embark on a trade mission to the Jewish state where it selected a handful of Israeli suppliers. What’s more, the deal opened the possibility of future codeshare agreements. If the lifting of the Qatar blockade results in something similar, the agreement holds exciting prospects for trade and transport in the Gulf.
On the surface, it would appear that Qatar’s national carrier will be the main beneficiary of the agreement, initially. By being able to operate over Saudi’s huge airspace, Qatar Airways will be able to tweezer a painful thorn from its side.
It is no secret that Qatar Airways has a troubled balance sheet. Just before the Covid crisis struck, the airline reported record annual losses of QR2.3 billion (AED2.32bn). The airline’s economic woes have partly been put down to the 2017 boycott, which forced it to slash 20 routes and make lengthy flight diversions around Saudi, UAE, Bahraini and Egyptian airspace.
On the surface, it would appear that Qatar’s national carrier will be the main beneficiary of the agreement
The fact that Qatar Airways can now reduce its flight times will be one of the key wins the airline will take from the GCC’s recent agreement. It is estimated that the opening of Saudi’s airspace alone will remove an average of 25 minutes from flights, thereby reducing almost half-an-hour of fuel burn. Some routes, for example Doha to Djibouti, will be able to reduce flight time from over four hours to two-and-a-half.
When you consider that fuel is by far an airline’s largest cost, often accounting for around 25 percent of annual expenditure, it is clear that Qatar Airways will be able to make substantial savings, which may go some way to improving its balance sheet. For an airline about to begin its climb out of the worst air travel crisis in history, the fuel savings could not come at a better time.
The UAE and Bahrain are yet to make any announcements on potential changes to their airspaces. While the these geographically smaller states will make less of an impact on Qatar Airways’ fuel costs if they open their airspaces, it would certainly be another welcome move for Doha’s flag carrier.
While the pandemic has caused a massive depression in the Gulf aviation sector, we have seen some incredibly exciting developments since September. The Abraham Accords and now the Qatar agreement have set a new progressive tone for the region’s industry heading into 2021. We can only view this as a positive boost for all aviation stakeholders in the Gulf.
With so few details on the GCC’s deal and the conditions that must be met by each state involved in the agreement, it is difficult to see yet exactly how the aviation sector will be impacted in the long-term.
One thing we can be sure of though is that aviation in the Gulf is evolving quickly and for the better. 2021, I’m sure, has some more welcome surprises in store.
Joe Peskett, Group Editor at ITP Media Group
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