Tuesday, 20 June 2017

QATAR: Emirates And Etihad Gain From Gulf Airspace Shut On Qatar

Besieged by a lack of airspace after being shut out of neighbouring Gulf countries last week, Qatar Airways is having to take unsustainably long routes to continue on long-haul network commitments.

Flight radar graphics show its B777s enroute to Sao Paolo stopping in Athens because they can’t carry enough fuel to fly nearly 17 hours in a single trip; the airline now needs to bear Northwest, deep into Iran before crossing into Europe.

Challenging for the Doha-based airline will be the loss of nearly 52 Gulf flights every week, accounting for 30 percent of its revenue.

The airline derives 18 percent of its capacity from feeder markets in the UAE, Bahrain and Saudi Arabia, before ferrying them to long-haul destinations throughout its network.

For an industry that celebrates when it manages a profit margin of 7 percent over costs, the weekly loss of contribution puts it at a big disadvantage compared to Emirates’ and Etihad’s gain as they look to recoup traffic from home markets looking for shorter long-haul flights which Qatar was expanding aggressively on.

Until March, Qatar Airways’ traffic to the US was growing at 45.6% compared to Emirates’ 15.4% and Etihad’s 6.6%.

The laptop ban derailed that growth.

Emirates–which reported an 84% loss in revenue this year–has yet to find routes for the 13 airlines it has pulled from US routes.

If we do not find homes for them, we’ll put them on the ground,CEO Clark had earlier said.

Etihad, beleaguered after souring investments in struggling European carriers, will also be grateful about retaining its crucial top-tier service advantage which Qatar Airways was bent on under cutting.

Among the airline’s more promising investments was its stake in Indian Airline Jet Airways–an airline that had been growing increasingly mortified at the prospect of Qatar Airways’ impending investment in the country following India’s relaxation of foreign direct investment airline rules.