Qatar Airways faces tough headwinds due to new restrictions

A man stands outside the Qatar Airways branch in Riyadh on June 5, after the carrier suspended all flights to Saudi Arabia following a severing of relations between major Gulf states and Doha. (AFP)
Updated 06 June 2017
0

Qatar Airways faces tough headwinds due to new restrictions

DUBAI: Qatar Airways, the second-biggest carrier in the Arabian Gulf, will face tough operational and financial headwinds as a result of restrictions placed on it by several other Arab nations, and the pressure will grow the longer the diplomatic fracture goes on, aviation analysts said.
All flights between four countries — Saudi Arabia, the UAE, Bahrain and Egypt — and Qatar are cancelled for an indefinite period from June 6, and Qatar Airways flights will not be allowed to fly over the airspace of those four nations.
Saj Ahmad, chief analyst at StrategicAero Research consultancy in London, said: “Qatar Airways will be hit hardest since it will have to reroute flights (that previously flew) over Saudi Arabia and the UAE on its long-haul missions — adding fuel, time and costs. Equally, its narrow-body fleet will end up parked at Doha, and ramp space there is not exactly plentiful — so again, they will have to redeploy them somewhere, if at all possible.”
Citibank, the American financial giant, said: “Loss of routes and the requirement to detour neighbors’ airspace could have a significant long-term impact on Qatar Airways business.”
That was echoed by John Strickland, independent aviation expert at JLS Consulting. “Much depends on how long (the dispute) goes on. We have not heard the final story yet. But the longer it goes the worse it is for Qatar,” Strickland told Arab News.
“The ban on ‘in’ and ‘out’ flights will obviously have an immediate impact, but the restrictions also inhibit operational flexibility on overflights through the other countries. Qatar files to Europe, Africa and the Americas, and all are affected by the ban on airspace in the region.”
Qatar seemed on Monday to have already begun avoiding the airspace of the countries that imposed the ban. Social media websites showed air maps of Qatar Airways planes en route to the west flying over the Arabian Gulf, heading towards Iran and Iraq, before turning westward toward Europe and America.
Strickland such operational adjustments would become more problematic. “Some alternative routings will be much more difficult. For example, routes to South America have to go over Saudi Arabia or Egypt. Rerouting will bring its own clear challenges. It may not be possible to fly nonstop, and then Qatar will have to think about new refueling facilities on the ground.”
He said that the restrictions could also put a brake on Qatar’s ambitious aviation expansion plans. “Qatar Airways has been a carrier in expansive mode, operating from a new state-of-the-art airport. The restrictions will have a significant effect on all that.”
Other Gulf airlines will also feel the effect, though to a more limited degree, Strickland said.
“Of course, not flying to Doha means passengers will have to find alternative connections to get to and from there. That won’t be cheap or easy,” he said.
“The longer this spat lasts, the more damaging it will be for everyone — and it will be passengers who suffer most,” he added.
The latest turbulence comes after a year of challenges for the Gulf aviation business, with testing competitive conditions compounded by security fears in the region and in Europe, as well as the laptop ban first imposed on some regional airports by the American authorities.
But Ahmad does not believe the recent problems marked the end of the “super connector” model adopted by Emirates, Etihad and Qatar Airways.
“There is simply too much demand going through hubs like Dubai for traffic to suddenly halt. And let us face it, there has been no cataclysmic move that would hurt demand; even the laptop ban has not put off other travelers connecting through places like Dubai,” Ahmad said.
“While some may view the region as risky, notably carriers from the US that do not serve the GCC (Gulf Cooperation Council), overall, passengers will still fly on as normal. There is no security reason nor any other factor that negatively acts as a deterrent. The Qatar spat is bilateral, so the impact is limited to those who serve Doha and to Qatar Airways,” he added.


China-US trade talks ‘making a final sprint’ — state media

U.S. Treasury Secretary Steven Mnuchin shakes hands with Chinese President Xi Jinping as U.S. Trade Representative Robert Lighthizer, left, and Chinese Vice Premier Liu He, right, look on before proceeding to their meeting at the Great Hall of the People in Beijing, China February 15, 2019. (REUTERS)
Updated 16 February 2019
0

China-US trade talks ‘making a final sprint’ — state media

  • US duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if there is no deal by March 1 to address US demands

SHANGHAI: Chinese state media on Saturday expressed cautious optimism over trade talks between the United States and China, a day after President Xi Jinping said a week of discussions had produced “step-by-step” progress.
Xi made the comments at a meeting on Friday with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing, after a week of senior- and deputy-level talks.
The People’s Daily, the official paper of the ruling Communist Party, said in a commentary that Xi’s meeting with US negotiators had affirmed progress made in previous talks and “injected new impetus into the next stage of the development of Sino-US trade relations.”
The talks “have made important progress” for the next round of negotiations in Washington next week, the paper said in its domestic edition.
“It is hoped that the two sides will maintain the good momentum of the current consultations and strive to reach an agreement within the set time limit,” it said.
US duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if there is no deal by March 1 to address US demands that China curb forced technology transfers and better enforce intellectual property rights.
In its overseas edition, the People’s Daily said “zero-sum thinking and games where you lose and I win can only create losses for both. Only on a basis of mutual respect and equal treatment, through dialogue and consultation, can we find a solution acceptable to both sides.”
An English-language editorial in the Global Times, which is published by the People’s Daily, said news that China had consulted on the text of a memorandum of understanding “shows the two sides have made unprecedented progress.”
“The MOU and next week’s talks both show that the seemingly endless China-US trade negotiations, like a marathon, are making a final sprint,” it said.
The newspapers cautioned that any agreement would have to be in the interests of both the United States and China.
“There are still obstacles to be overcome, and no one should underestimate how daunting a task the two sides face trying to resolve all the differences that have long existed between them in one clean sweep,” the official English-language China Daily said in an editorial.