Prepare for turbulence - how a prolonged Middle East conflict could reshape how we fly

 

Zayed International Airport, also known as Abu Dhabi International Airport, is one of the busiest in the region (Image: Getty Images)

It was once just a dusty overnight stop for luxury flying boats traveling from the UK to far-flung parts of the British Empire, like India and Australia, in the world of global aviation. It had a straightforward runway made of desert sand by the 1960s, and airlines used it to refuel on their way to perhaps more exotic locations. Yet today, Dubai is one of the key pillars of the industry, and Dubai International Airport (DXB) is its beating heart.  In 2024, more than 92 million passengers made their way through its gleaming, marble-floored halls and sparkling, brightly lit shopping malls.

• READ MORE: Israel says it has killed Iran's navy chief overseeing Strait of Hormuz blockade

 That makes DXB the busiest airport in the world for international passengers - far outstripping London Heathrow, for example, which accommodated just under 83 million.  Nor is Dubai alone within the Gulf as a major hub.  Rival airports in Abu Dhabi and the Qatari capital, Doha, are not quite as busy, but they still handled some 87 million passengers between them.

 These three Gulf airports collectively handle more than 3,000 flights per day, the majority of which are operated by local airlines Qatar Airways, Emirates, and Etihad. Global aviation, on the other hand, has been significantly impacted by the Middle East conflict. First, flights were halted in some of the busiest airspace in the world, resulting in the grounded of aircraft at major hub airports and the stranding of hundreds of thousands of passengers. Air traffic in the region remains heavily disrupted.

Fuel is the next thing. With supplies from refineries in the Gulf choked off after Iran effectively blocked the Strait of Hormuz, it has become a serious concern.  Since the conflict began, prices have doubled due to fears of scarcity, as the region typically imports approximately half of Europe's jet fuel. Some carriers have already begun cutting flights in response.

 But while these issues are likely to dominate the industry's thinking in the short-term - and will probably lead to higher prices in the months to come - there's also a question mark over what the longer-term implications will be.

 Insiders are particularly curious about what this means for the aviation industry's "Gulf model," which has been widely credited with revolutionizing long-distance travel and making it more affordable. And that has serious implications for airlines, passengers and businesses in the Middle East that rely on the region's abundant airline connections.

Flights rerouted as airspace restricted after strikes (Image: FlightRadar24)

Chaos in the departure halls

The Gulf hubs, normally well-oiled machines, shuddered to a halt following the first US-Israeli strikes on Iran in late February.  With airspace closed across the region, aircraft were grounded.  Some of the planes that had already taken off had to turn around. In Dubai, Abu Dhabi, and Qatar, tens of thousands of passengers were left stranded, many of whom had only arrived to change planes. At the same time, Iran launched retaliatory drone and missile strikes against Qatar and the United Arab Emirates, putting those stuck in airports and hotels in a tense and fearful situation. Because their flights were scheduled to pass through one of the Gulf hubs, many more passengers around the world were unable to take the services they had booked. They were left scrambling to find alternatives.

Emirates and Etihad did begin operating a limited service to get people home within days, and Qatar Airways followed suit shortly afterwards.  Other carriers from outside the region also put on flights.  Some governments, including the UK's, chartered their own aircraft to help people leave the region.

 The situation has somewhat stabilized since then, with all three major airlines offering consistent flights from their hubs. But schedules remain limited and prone to disruption.  According to analysts at Cirium, more than 30,000 services to the Middle East as a whole have been cancelled since the start of the conflict.

 Travelers shared their experiences and frustrations on social media or on news networks, and much of this took place in the harsh spotlight of publicity. Among them was Ian Scott, who had been flying from Melbourne to Venice via Doha.  He had to spend several days sheltering in a hotel after his outbound flight from the capital of Qatar was forced to turn back in midair. He then decided to drive through the desert for two days to Oman. He was eventually able to board a flight out of there. He now says that in future, he would avoid flying via the Gulf hubs, even once hostilities have ceased – because he has "no faith" the region's troubles would end there.

How the Gulf hubs became such a success

And the opinions of travelers like Ian will be the most concerning to the operators of the hubs. More than half of travelers passing through the Gulf hubs do not intend to stay, despite the fact that Dubai, in particular, has grown into a major tourism and business destination on its own. They simply want to change planes.

 According to OAG, an aviation data company, last year, 47% of passengers in Dubai were there to board connecting flights, compared to 54% in Abu Dhabi and 74% in Doha. And the core of the Gulf aviation model is this. Passengers are flown in on long-haul services from cities around the world, to meet carefully timed connections, which can then take them on to a wide range of equally far-flung destinations.  It means they can travel from Boston to Bali, or Amsterdam to Antananarivo with a single stop and a minimum of fuss.

 This contrasts with the conventional "hub-and-spoke" model, which involves flying passengers into hub airports from a regional, short-haul network, where they can transfer onto large planes for long-haul services on busy international routes.  In addition, it differs from "point-to-point" flying, which involves passengers traveling in smaller aircraft on direct long-distance routes between secondary cities. The Gulf carriers' approach combines some of the convenience point-to-point gives passengers with the economies of scale for airlines associated with the hub-and-spoke system.  It is a unique model and one that is very dependent on geography.

"Within three hours flying time of the Gulf, you have the Middle East, the Indian subcontinent, verging on China.  It's a huge market," explains James Hogan, a former chief executive of Abu Dhabi-based Etihad Airways.  From 2006 to 2017, he was in charge of the carrier, leading a period of rapid growth for the 2003-founded business. He says, "The Gulf carriers were able to build a very strong network, not only of hub cities and capital cities, but also of major secondary and third cities, which made it possible to fly one-stop." Andrew Charlton, managing director of consultants Aviation Advocacy agrees.  "The Gulf is just in that place where, with the current technology, you can get to practically anywhere on Earth," he says.

 And so, in the early years of the century, that put the region's airlines in an ideal position to take advantage of rapid growth in markets such as China and India, which he believes European and American carriers initially overlooked.

 He states, "Suddenly the Middle East was exactly the right place for the emerging market, which was well east of the Atlantic." The Gulf carriers, as relative newcomers to the industry, were also able to invest in modern fleets ideally suited to the kind of model they were building.  Initially, the twin-engine Boeing 777 was favoured for its 300-seat capacity and range of more than 7,000 nautical miles, while later, the Airbus A380 superjumbo also became a useful tool for carrying more than 500 passengers to and from congested airports where take-off and landing slots were scarce.

 "Starting with a clean sheet of paper was the main differentiator. That was the secret sauce," explains Mr Hogan.  "You were able to create a service proposition that couldn't be matched by carriers in more traditional markets, whether that be the USA, Europe or Australasia."

The Middle East conflict has thrown the hubs' business model into disarray (Image: Getty Images)

Since the turn of the millennium, the Gulf carriers and the hubs they serve have grown rapidly, establishing themselves as a crucial junction for long-distance aviation. John Grant, a senior analyst at OAG, explains, "It is the pivot point for passengers that arrive from Europe and North America... who are scheduled to connect on another flight to Australia, South East Asia, Singapore, Hong Kong, or the Indian subcontinent." "It is a hugely efficient, very effective operation that sees 90-100 flights arriving in a one-hour time window and then departing somewhere else an hour or two later."

 Long-haul aviation costs have also been significantly impacted by all of this. "Competition drove down prices, and the Gulf carriers were a competitive game changer," says Mr Charlton.  "Obviously, they drove down airfares because they added capacity to long-haul markets and created long-haul markets." But the conflict in the Middle East has thrown all this into disarray, according to Kristian Coates Ulrichsen, a Middle East expert at the Baker Institute in Texas.  He claims that a conflict that lasts for a long time could discourage travelers from traveling through the Gulf and have a long-term effect on how its airlines operate. According to him, "Of course the business model is going to be called into question the longer it goes on." "That will do a lot of damage if people don't feel secure traveling because they think they'll get stuck or that the airport might be closed at any time because of a drone, even if it's intercepted,"

Why fares are likely to rise

The key question is how much this has damaged the Gulf's reputation as a focal point for global aviation – and whether its model has suffered lasting damage.

 Charlton asserts that the duration of the conflict will play a significant role. He asserts that the Gulf carriers will "just flood the market with cheap airfares" in the event that it concludes quickly. But the more it drags on, he says, "the more passengers will find alternate ways to fly", with rival carriers offering connections via alternative hubs such as Singapore, Bangkok, Hong Kong or Tokyo.

Meanwhile the long-term loss of capacity normally provided by the Gulf airlines, he says, would inevitably drive prices up.

 "Did the Gulf carriers cause lower fares?  Yes they did.  If Gulf carriers are removed from the equation, air fares will undoubtedly rise. European airlines have already responded to the crisis in the Middle East by changing their own schedules, and adding flights that avoid the need for a stopover in the Gulf.  British Airways, for example, has introduced a number of extra services each week to Bangkok and Singapore, while Lufthansa and Air France KLM have also added extra flights to Asia.

 However, the Director General of the International Air Transport Association (IATA), Willie Walsh, claims that European airlines simply do not have the resources necessary to substantially replace the Gulf carriers, which typically account for 9.5% of global capacity. He told journalists at a Paris event in the middle of March that "there is no way the capacity provided by carriers in the Gulf can be replaced by European carriers," and he also said that he expected Gulf aviation to recover quickly once the conflict ended.

The end of the Gulf dream?

It is worth mentioning that the future of the Gulf model has been questioned in the past, not least during the Covid pandemic, when some experts suggested carriers reliant on long-haul routes and transit traffic, using fleets of large aircraft, were not agile enough to respond to changing circumstances.  In reality, the recovery was rapid, with Emirates, Etihad and Qatar Airways all showing healthy profits in recent years.

 "The aviation industry has seen Sars, it's seen Covid, it's seen geopolitical events in various parts of the world," says Grant.  "It's seen stock market crashes, and it bounces back."

There is, however, a great deal at stake, and not just for the aviation industry.  Dubai, in particular, has transformed itself from merely a transit hub to a standalone center for business and tourism in recent years. James Hogan, the former CEO of Etihad, provides the following explanation: "The Gulf states have always had very strong oil and gas sectors, but diversification has always been a key priority for their leadership." "Due to the catalytic effect of aviation, there was a major move in that diversification with the ability to create aviation hubs." Ulrichsen concurs. 

The United Arab Emirates, he believes, has established itself as "a place where people aspirationally want to go and live and work and do business.  And a significant portion of that model is based on Dubai's attractiveness." That prosperity, however, could potentially be put at risk if air traffic to the region fails to recover quickly, with the tourism sector looking particularly exposed.

 "My intuition is this will have a lasting impact… because of the safety perception you have in your mind," says Johannes Thomas, chief executive of the travel specialist Trivago.  He predicts that "maybe two to three years" will pass before those safety concerns are completely resolved. However, Hogan is much more upbeat. "This is a major crisis, but it will be resolved at a point in time", he insists.  "I've seen it over the years.  Some people in the early days may be apprehensive, but travellers will come back.

 "I'm very bullish about what the Gulf has to offer."

 There is no doubt that the major Gulf carriers and the hubs that they rely on have suffered greatly, at least in the short term, from the conflict in the Middle East. The region is now likely to be viewed with some trepidation by tourists and business travellers alike

 Overcoming that reputational damage can only really begin once hostilities have eased.  If the Gulf can resume its role as a junction to the world, then the industry will be able to carry on much as before - but if that isn't possible, the implications for long-haul aviation around the globe could be profound.

Source: BBC