BBC
Historically regarded as a modest outpost in global aviation, Dubai evolved from a mere refueling stop for luxury flying boats on long journeys from the UK to various parts of the British Empire, such as India and Australia, to become a pivotal player in the aviation industry. By the 1960s, it had transformed significantly, featuring a basic runway comprised of desert sand that served as a layover point for airliners heading to more exotic locations.
Today, however, Dubai stands as a cornerstone of the aviation sector, with Dubai International Airport (DXB) serving as its central hub. In 2024, the airport witnessed an impressive flow of more than 92 million passengers through its modern, marble-floored terminals and radiant shopping areas.
This accomplishment makes DXB the world's busiest airport for international travelers, surpassing London Heathrow, which accommodated just under 83 million passengers. Dubai is not the sole heavyweight in the region, as Abu Dhabi and Doha also serve as important hubs, collectively processing approximately 87 million passengers in recent times.
Under typical conditions, these three Gulf airports manage over 3,000 flights daily, primarily operated by their national airlines: Emirates, Etihad, and Qatar Airways.
However, the ongoing conflict in the Middle East has significantly disrupted global aviation dynamics. The conflict has led to the suspension of flights through some of the world's busiest airspace, resulting in grounded aircraft at major hubs and leaving countless passengers stranded. Air traffic in the region continues to be heavily affected.
Additionally, fuel supply has become a critical concern. Following Iran's effective blockade of the Strait of Hormuz, access to fuel from local refineries has been severely limited. This area typically supplies about half of Europe’s jet fuel needs, and apprehensions over fuel availability have resulted in a doubling of prices since the conflict commenced. As a response, some airlines have already begun reducing their flight schedules.
While these challenges are likely to dominate the immediate future of the aviation sector—possibly resulting in increased prices in the coming months—there remains uncertainty regarding the long-term effects.
Industry experts are particularly curious about the future of the exceptionally successful "Gulf model" of aviation, which has been instrumental in revolutionizing long-distance travel and making it more affordable. This development poses significant ramifications for airlines, passengers, and businesses throughout the Middle East that depend on the region's extensive airline connectivity.
Chaos in the departure halls
Typically regarded as efficient operations, the Gulf hubs experienced significant disruptions following the inaugural US-Israeli strikes on Iran in late February. The resulting airspace restrictions grounded numerous aircraft and forced some that were already airborne to return to their originating airports.
As a result, tens of thousands of travelers found themselves stranded in Dubai, Abu Dhabi, and Doha—many merely there to transfer flights. Concurrently, retaliatory drone and missile strikes from Iran targeted both the UAE and Qatar, creating a fearful atmosphere for those trapped in airports and hotels.
Travelers worldwide faced difficulties as their planned flights involved connections through the Gulf, leaving them urgently seeking alternative travel arrangements.
In response to the crisis, Emirates and Etihad quickly instituted a limited service to assist stranded passengers, followed by Qatar Airways. Other international airlines stepped in with additional flights, while some governments, including the UK's, organized chartered aircraft to facilitate safe departures.
As conditions gradually stabilized, all three major carriers resumed regular flights from their hubs. Nevertheless, timetables remain constrained and susceptible to further interruptions. According to analysts at Cirium, over 30,000 flights to the Middle East have been canceled since the onset of hostilities, generating significant media attention as travelers voiced their frustrations on social media and news outlets.
For instance, Ian Scott, traveling from Melbourne to Venice with a layover in Doha, encountered a chaotic experience when his flight was diverted mid-air, forcing him to spend several days in a hotel before making a lengthy overland journey to Oman for a subsequent flight.
In light of these events, he has expressed his intent to avoid routes through Gulf hubs in the future, citing a lack of confidence in the region's stability.
How the Gulf hubs became such a success
The sentiments expressed by travelers like Scott are troubling for the operators of the Gulf airports.
While Dubai has transformed into a prominent tourist and business destination, a significant proportion of passengers utilizing Gulf hubs are there merely for connecting flights. In the previous year, 47% of passengers at Dubai's airport were on connecting journeys, with 54% at Abu Dhabi and 74% at Doha, as reported by aviation data provider OAG.
This dynamic underscores the core of the Gulf aviation model. Travelers arrive on long-haul flights from cities across the globe to seamlessly connect to a diverse array of distant destinations. This model allows for efficient travel between locations such as Boston and Bali or Amsterdam and Antananarivo with minimal effort.
In contrast, the traditional "hub-and-spoke" model channels passengers from regional short-haul networks into hub airports, where they transfer to larger aircraft for long-haul international flights. Similarly, the "point-to-point" approach enables travelers to journey directly between secondary cities aboard typically smaller planes.
The Gulf carriers' strategy merges the conveniences of point-to-point travel with the operational efficiencies of the hub-and-spoke system. This distinctive approach is inherently reliant on geographical advantages.
"Within a three-hour flight from the Gulf, you can reach the Middle East, the Indian subcontinent, and portions of China—a vast market," notes James Hogan, former CEO of Etihad Airways. During his tenure from 2006 to 2017, he oversaw significant expansion as the airline capitalized on its 2003 inception.
"The Gulf carriers efficiently established a robust network not only connecting capital cities but also major secondary and even tertiary cities, enabling one-stop flying," he elaborates.
Andrew Charlton, managing director of Aviation Advocacy, concurs, emphasizing that "the Gulf's location, combined with modern aviation technology, facilitates access to virtually any destination on Earth."
In the early 2000s, this strategic positioning positioned Gulf airlines to seize growth opportunities in burgeoning markets, particularly in China and India—regions that European and American carriers initially overlooked.
Additionally, the Gulf carriers, as relative newcomers, were able to invest in fleets that best suited their operational model. The twin-engine Boeing 777 was initially favored for its 300-seat capacity and range exceeding 7,000 nautical miles, later complemented by the Airbus A380, a superjumbo capable of accommodating over 500 passengers at congested airports with limited take-off and landing slots.
"The fundamental advantage was starting from a clean slate, allowing for the creation of an unmatched service offering compared to traditional airlines in markets like the USA, Europe, or Australasia," explains Hogan.
The ongoing conflict in the Middle East has thrown this business model into turmoil.
Since the start of this millennium, Gulf carriers and their associated hubs have rapidly flourished, establishing themselves as key nodes in long-distance air travel.
"These hubs are crucial for passengers traveling from Europe and North America who need to connect to flights headed to Australia, Southeast Asia, Singapore, Hong Kong, or the Indian subcontinent," asserts John Grant, senior analyst at OAG.
"It is an exceedingly efficient operation, accommodating 90-100 flight arrivals within a one-hour window before subsequent departures," he adds.
The implications of this system have extended significantly to the costs associated with long-haul air travel.
"Competition introduced price reductions, and Gulf carriers emerged as transformative players," claims Charlton. "Their capacity expansion in long-haul markets also fostered the emergence of these markets, thereby reducing airfares."
Nonetheless, Kristian Coates Ulrichsen, a Middle East expert at the Baker Institute in Texas, indicates that a prolonged conflict could deter travelers from transit through Gulf hubs, fundamentally altering the operational model of the airlines.
"If the conflict persists, the viability of the business model will certainly be scrutinized," he comments. "Passengers may hesitate to travel if they perceive the risk of being stranded or if there is a constant threat of airport closures due to drone activity, even if intercepted."
Why fares are likely to rise
A primary concern centers around the potential impact on the Gulf's reputation as a global aviation hub and the enduring consequences for its operational model.
Charlton posits that the duration of the conflict will heavily influence the potential for recovery. "If resolved swiftly, Gulf carriers will likely regain lost market position quickly by flooding the market with competitively priced fares."
However, he cautions that prolonged disputes will drive passengers to seek alternative routes, with rival airlines presenting options via different hubs, such as Singapore, Bangkok, Hong Kong, or Tokyo.
Simultaneously, the sustained loss of capacity from Gulf airlines would naturally lead to price increases.
"Did Gulf carriers contribute to lower airfares? Yes, they did. Remove them from the equation, and airfares will inevitably rise as surely as the sun rises," he asserts.
European airlines have already begun to adapt their schedules in response to the Middle East crisis, introducing flights that bypass the need for Gulf stopovers. British Airways, for instance, has expanded its services to Bangkok and Singapore, with Lufthansa and Air France KLM also enhancing their offerings to Asia.
However, Willie Walsh, Director General of the International Air Transport Association (IATA), highlights that European airlines lack the capacity to fully compensate for the absence of Gulf carriers – which account for 9.5% of global aviation capacity.
Speaking at an event in Paris in mid-March, he remarked, "There is no way European carriers can replace the capacity typically supplied by Gulf airlines," predicting a swift recovery once the conflict subsides.
The end of the Gulf dream?
It is important to note that the future of the Gulf aviation model has faced scrutiny in the past, particularly during the COVID pandemic. Some experts questioned the resilience of carriers reliant on long-haul routes and transit passengers. However, the post-pandemic recovery was remarkably swift, as Emirates, Etihad, and Qatar Airways returned to profitability in recent years.
"The aviation industry has weathered numerous crises, including SARS, COVID-19, and geopolitical upheavals," observes Grant. "Despite market crashes, it consistently rebounds."
Nonetheless, significant stakes surround the Gulf aviation landscape—not just for the aviation sector. In recent times, Dubai has shifted from merely being a transit zone to a vibrant hub for business and tourism.
"The Gulf states have historically leveraged robust oil and gas industries, but diversifying has always been a priority for leadership," notes Hogan. "Developing aviation hubs has played a pivotal role in that diversification due to aviation's catalytic potential."
Ulrichsen also acknowledges this shift, asserting that the UAE has stabilized as a desirable destination for expatriates and business ventures, underscoring that much of this model hinges on Dubai's allure.
However, if air traffic to the region fails to rebound swiftly, the tourism sector could face vulnerability, with potential long-term repercussions.
"My intuition suggests that lasting effects may emerge due to pervasive safety concerns," predicts Johannes Thomas, CEO of travel specialist Trivago. He anticipates it could take "two to three years" to fully alleviate these safety apprehensions.
Conversely, Hogan remains optimistic. "While this crisis is significant, it will ultimately be resolved," he asserts confidently. "Historical patterns show that travelers will return, even if initial apprehension exists."
In summary, the ongoing Middle East conflict has undeniably inflicted a substantial blow to Gulf carriers and their respective operational hubs. The region is likely to be approached with caution by both tourists and business travelers in the immediate future.
Mitigating this reputational damage can only commence once hostilities diminish. Should the Gulf succeed in reinstating its role as a global travel nexus, the aviation industry may continue to thrive as it once did; otherwise, the ramifications for long-haul air travel worldwide could be deeply impactful.
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