How prolonged conflict in the Middle East could reshape the way we fly

Prepare for turbulence: how protracted conflict in the Middle East could reshape the way we fly

It was once a modest outpost in the world of global aviation, a dusty overnight stop for luxury seaplanes making the arduous journey from the United Kingdom to the most remote parts of the British Empire, such as India and Australia. In the 1960s, there was a simple runway made of desert sand, used as a refueling stopover by airliners en route to arguably more exotic destinations.

Yet today, Dubai is one of the industry’s main pillars, and Dubai International Airport (DXB) is its beating heart. In 2024, more than 92 million passengers will pass through its gleaming marble-floored concourses and gleaming, well-lit shopping malls.

This makes DXB the world’s busiest airport for international passengers, far surpassing London Heathrow, for example, which welcomed just under 83 million. Dubai isn’t the only major hub in the Gulf, either. Rival airports in Abu Dhabi and the Qatari capital Doha are not as busy, but they still handled some 87 million passengers between them.

Under normal circumstances, these three Gulf airports together host more than 3,000 flights each day, the majority of them operated by local airlines Emirates, Etihad and Qatar Airways.

But the conflict in the Middle East has had a dramatic impact on global aviation. First, there was the paralysis of flights in some of the world’s busiest airspaces, leaving planes at major major airports grounded and hundreds of thousands of passengers stranded. Air traffic in the region remains severely disrupted.

Then there’s fuel. With supplies to Gulf refineries cut off after Iran effectively blocked the Strait of Hormuz, this has become a major concern. The region normally accounts for about half of Europe’s jet fuel imports, and fears of shortages have caused prices to double since the conflict began. Some carriers have already started reducing flights in response.

But while these questions will likely dominate the industry’s thinking in the short term – and likely drive higher prices in the months to come – there is also a question mark over the long-term implications.

In particular, insiders wonder what all this means for the hugely successful “Gulf model” of aviation – and which has been widely credited with transforming long-distance travel and making it cheaper. And this has serious implications for Middle Eastern airlines, passengers and businesses that rely on the region’s many air connections.

Chaos in the departure halls

The Gulf hubs, normally well-oiled machines, came to a halt after the first US-Israeli strikes against Iran at the end of February. With airspace closed in the region, planes were grounded. Some planes that had already taken off were forced to turn back.

Tens of thousands of passengers remained stranded in Dubai, Abu Dhabi and Qatar, many of whom had arrived in the region only to change planes. Meanwhile, the United Arab Emirates and Qatar were targets of retaliatory Iranian drone and missile strikes, creating a tense and frightening environment for those stuck in airports and hotels.

Many other passengers around the world were unable to travel on the services they had booked because their flights had to pass through one of the Gulf hubs. They had to scramble to find alternatives.

Emirates and Etihad began operating a limited service to get people home within days, and Qatar Airways followed suit shortly after. Other carriers outside the region also offer flights. Some governments, including the United Kingdom, have chartered their own planes to help people leave the region.

Since then, the situation has stabilized somewhat, with all three major carriers operating regular flights from their hubs. But hours remain limited and subject to disruptions. According to Cirium analysts, more than 30,000 services to the entire Middle East have been canceled since the start of the conflict.

Much of this took place in the heat of harsh publicity, as travelers took to social media or spoke to news networks about their experiences and frustrations.

Among them was Ian Scott, who was flying from Melbourne to Venice via Doha. His outbound flight from the Qatari capital was forced to turn around mid-flight, and he then had to spend several days sheltering in a hotel, before choosing to spend two days driving through the desert to Oman. From there he was finally able to catch a flight.

He now says that in future he would avoid passing through Gulf hubs, even once hostilities end – because he has “no faith” that the region’s unrest will end there.

How Gulf hubs became so successful

And it is the verdicts of travelers like Ian that will worry hub operators the most.

Although Dubai, in particular, has become a major tourist and business destination in its own right, more than half of travelers passing through Gulf hubs are not there to stay. They just want to change planes.

Last year, 47% of Dubai’s passengers were there to board connecting flights, compared with 54% of those in Abu Dhabi and 74% of those in Doha, according to OAG, an aviation data company.

And this is the essence of the Gulf aeronautical model. Passengers are flown on long-haul services from cities around the world, joining carefully timed connections, which can then take them to a wide range of equally distant destinations. This means they can travel from Boston to Bali or Amsterdam to Antananarivo with just one stop and minimal fuss.

This contrasts with the conventional “hub and spoke” model, which involves flying passengers to hub airports from a short-haul regional network, where they can board large aircraft for long-haul services on busy international routes. It is also different from “point-to-point” flying, which involves passengers traveling on direct long-distance routes between secondary cities, usually on smaller aircraft.

The Gulf carriers’ approach combines some of the point-to-point convenience offered to passengers with the airline economies of scale associated with the hub-and-spoke system. This is a unique model and very dependent on geography.

“A three-hour flight from the Gulf, you have the Middle East, the Indian subcontinent, which borders China. It’s a huge market,” says James Hogan, former managing director of Etihad Airways, based in Abu Dhabi. He led the carrier for 11 years – from 2006 to 2017 – overseeing a period of rapid expansion for the company, which began operations in 2003.

“Gulf airlines have been able to build a very strong network, not only of main cities and capitals, but also of major secondary cities and third-party cities, which has made it possible to serve one-stop flights,” he explains.

Andrew Charlton, managing director of consultancy firm Aviation Advocacy, agrees. “The Gulf is where, with current technology, you can access virtually anywhere on Earth,” he says.

So at the turn of the century, this put the region’s airlines in an ideal position to take advantage of the rapid growth of markets like China and India, which European and American carriers, he said, had initially neglected.

“The Middle East suddenly found itself in exactly the right place for the emerging market, which was well east of the Atlantic,” he says.

Gulf carriers, relatively new entrants to the industry, were also able to invest in modern fleets perfectly suited to the type of model they were building. Initially, the twin-engine Boeing 777 was favored 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 transporting more than 500 passengers to and from congested airports where takeoff and landing slots were scarce.

“The major differentiator was starting with a blank sheet of paper. That was the secret sauce,” says Hogan. “You have managed to create a service proposition that could not be matched by carriers in more traditional markets, whether in the United States, Europe or Australasia.”

As a result, Gulf carriers and the hubs they serve have grown rapidly since the turn of the millennium, becoming a key hub for long-haul aviation.

“It’s the pivot point for passengers arriving from Europe and North America…who need to connect to another flight to Australia, Southeast Asia, Singapore, Hong Kong or the Indian subcontinent,” says John Grant, senior analyst at OAG.

“This is an extremely efficient and effective operation that sees 90 to 100 flights arriving in a one-hour time slot and then departing elsewhere an hour or two later.”

All of this has also had a significant impact on the cost of long-haul aviation.

“Competition has driven prices down and the Gulf carriers have changed the game,” says Mr Charlton. “They added capacity to long-haul markets, they created long-haul markets… so of course they lowered airfares.”

But the conflict in the Middle East has sowed chaos, according to Kristian Coates Ulrichsen, a Middle East expert at the Baker Institute in Texas. He says prolonged conflict could deter travelers to transit the Gulf – and have a long-term impact on the operation of airlines.

“Of course the business model will be challenged the longer this goes on,” he says. “If people don’t feel safe when they travel because they feel like they’re going to get stuck, or that at any moment the airport could be closed because of a drone, even if it’s intercepted, that will do a lot of damage.”

Why rates are likely to increase

The key question is to what extent this has damaged the Gulf’s reputation as a central hub for global aviation – and whether its model has suffered lasting damage.

According to Charlton, much will depend on the duration of the conflict. If this ends quickly, he says, Gulf carriers will quickly make up lost ground because “they will just flood the market with cheap airfares.”

But the longer this drags on, he says, “the more passengers will find other ways to travel”, with competing companies offering connections via alternative hubs such as Singapore, Bangkok, Hong Kong or Tokyo.

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

“Have the Gulf carriers caused a drop in fares? Yes, they have. If you take the Gulf carriers out of the equation, airfares will rise, as surely as eggs are eggs.”

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 additional services each week to Bangkok and Singapore, while Lufthansa and Air France KLM have also added additional flights to Asia.

But according to Willie Walsh, chief executive of the International Air Transport Association (IATA), European airlines simply do not have the resources to largely replace Gulf carriers, which normally account for 9.5% of global capacity.

Speaking to reporters at an event in Paris in mid-March, he said “there is no way that the capacity provided by Gulf carriers can be replaced by European carriers”, adding that he hoped Gulf aviation would recover quickly once the conflict eased.

The end of the Gulf dream?

It is worth mentioning that the future of the Gulf model has been called into question in the past, notably during the Covid pandemic, when some experts suggested that carriers relying 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 has been rapid, with Emirates, Etihad and Qatar Airways all posting good profits in recent years.

“The aviation industry saw SARS, it saw Covid, it saw geopolitical events in various parts of the world,” says Grant. “There were stock market crashes, and they bounced back.”

However, the stakes are considerable, and not just for the aeronautics industry. In recent years, Dubai, in particular, has evolved from being just a transit destination to becoming a business and tourism hub in its own right.

“The Gulf states have always had very strong oil and gas sectors, but diversification has always been a key priority for their leaders,” says former Etihad CEO James Hogan. “With the possibility of creating air hubs, there has been major progress in this diversification, due to the catalytic effect of aviation.”

Ulrichsen agrees. The United Arab Emirates, he believes, has established itself as “a place where people aspire to live, work and do business. And a large part of this model is based on the attractiveness of Dubai.”

This prosperity could, however, be potentially threatened if air traffic to the region does not recover quickly, with the tourism sector appearing particularly exposed.

“My hunch is that this will have a lasting impact… because of the perception of security that you have in your head,” says Johannes Thomas, chief executive of travel specialist Trivago. He estimates it will take “maybe two to three years” before these security issues are completely resolved.

But Hogan is much more optimistic.

“It’s a major crisis, but it will be resolved at some point,” he insists. “I’ve seen it over the years. At first some people may be worried, but travelers will come back.

“I am very optimistic about what the Gulf has to offer.”

There is no doubt that in the short term at least, the conflict in the Middle East is dealing a major blow to the Gulf’s major carriers and the hubs on which they depend. The region is now likely to be viewed with some trepidation by tourists and business travelers.

We can only truly begin to remedy this reputational damage once hostilities have subsided. If the Gulf can resume its role as a crossroads with the world, then the industry can continue to operate as before – but if this is not possible, the implications for long-haul aviation across the world could be profound.

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