Abu Dhabi, UAEThursday 19 September 2019

Longer journeys, higher costs expected as airlines avoid Iranian airspace

But low-cost carrier Flydubai says no impact on fares yet

Airlines have had to take action as Iranian tensions ahve mounted. EPA
Airlines have had to take action as Iranian tensions ahve mounted. EPA

Airlines are getting no respite this year as heightened US-Iran tensions in the Arabian Gulf pushed some operators to divert flights, causing more problems for an industry already facing many challenges.

Operators are grappling with longer travel times, additional fuel costs and worsening congestion in the already overcrowded Middle East skies after re-directing flight paths to avoid risky Iranian airspace, analysts say. The operational challenge come during the peak summer travel period crucial for profitability..

"It will add cost and duration for these airline routes," aviation consultant John Strickland told The National. "This is a piece of congested airspace anyway even without this current limitation, so it’s a headache but airlines have to manage."

The added challenge comes as Middle East carriers struggle with a combination of soaring fuel costs, a stronger dollar, fierce competition, trade tensions and slower global growth. Dubai-based Emirates, the largest long-haul carrier, in May reported a 69 per cent drop in annual net profits and its president Tim Clark warned of a "tough" year ahead.

Middle East carriers are expected to record weaker earnings this year compared to 2018, according to the International Air Transport Association (Iata). Regional airlines are forecast to post a combined net loss of $1.1bn, slightly worse than the $1bn loss in 2018. That represents a $5.01 loss per passenger compared to a $6.12 profit per traveller globally, Iata said.

Travel flows north of the Arabian Gulf are most likely to be affected on journeys from Gulf hubs, said Mark Martin, founder of aviation consultancy Martin Consulting. Flights to CIS countries and Russia will also be impacted.

US and Europe flights to Gulf hubs will be relatively unaffected as will Gulf hub services to India and Australia, said George Ferguson, senior aerospace analyst at Bloomberg Intelligence.

Flights from the Gulf to Japan, Korea,China, India and Australia will see more impact, he said.

Route planning varies from day to day depending on weather conditions, wind strength and direction, managing peak flows and other variables, Mr Strickland said, so alternative flight paths will also vary.

Low-cost carrier Flydubai said its team takes into account a number of factors in planning its flight paths, which are regularly reviewed in conjunction with the UAE aviation regulator.

"We do not currently see that there will be any impact on our fares," a Flydubai spokeswoman said. "We are keeping our passengers updated if there are changes to the departure times and duration of the flights."

Emirates, and other Guulf carriers Flydubai, Etihad Airways, Saudi Arabian Airlines and Bahrain's Gulf Air have diverted flight paths to avoid the airspace over the Straits of Hormuz and Gulf of Oman.

The UAE civil aviation authority ordered carriers on Saturday to avoid risky air space, a day after some airlines took their own measures.

The US Federal Aviation Authority on Friday barred American carriers from flying over the Tehran flight-information region of the Arabian Gulf and Gulf of Oman, prompting airlines around the world to divert flights away from Tehran-controlled airspace. The move follows rising tensions as the US blamed Iran for attacks on six tankers in the Gulf and for shooting down an American drone in international airspace.

US President Donald Trump was threatening Iran with additional sanctions on Monday, although the Islamic Republic's economy has already been crippled by earlier penalties on key sectors including oil and banks.

Updated: June 24, 2019 07:05 PM

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