title: Turbulence in the Gulf: how conflict is testing the region's airline giants
author: Oliver Ranson
contenttype: article
publication: Airline Revenue Economics
published: 2026-03-09T07:30:41+00:00
sourceurl: https://revman.substack.com/p/turbulence-in-the-gulf-how-conflict
word_count: 1983
It is far too early to evaluate the impact of war in the Middle East on Gulf aviation. Scenarios ranging from rapid recovery to prolonged disruption and even catastrophe are all plausible at this stage. If the conflict ends swiftly and Iranian regime change transforms a pariah state into a friend of the west, the region and it’s aviation hubs could boom like never before. Iran Air could become the new darling of global airlines. On the other hand the region’s airport infrastructure is subject to more physical and operational risk than ever before. Runways are hard to destroy – craters can be filled in and concreted over. But remaining aircraft, hangars, fuel farms, lighting, baggage and cargo systems, terminal buildings and Air Traffic Control towers are not. There might be a serious incident. In bad cases, the airlines might never recover. One thing is for sure. Information appearing from the region should be treated sceptically. These countries do not tolerate criticism of their state apparatus or their leaders. And aviation is very much a part of the state out in the Gulf. In this article I wanted to evaluate three things. First I will present my thoughts on what the crisis really is and why it matters for Gulf airlines. Then I will analyse published rebooking policies for the major airlines in the region. I find that they suggest the airlines were unprepared and possibly naïve. I also present my model rebooking conditions that I think airlines should adopt. In the next article (this Wednesday) I will present my analysis of arrivals and departures in the Gulf around the time the war began. The timing, which led to airspace closure just after major arrivals banks, was unfortunate. In fact, it could hardly have been worse. This article was written using data from OAG Schedules Analyser: visit oag.com. Thanks OAG! Advertisement: What this crisis really represents for aviation in the Middle East At the time of writing the large airlines are either operating an extremely limited number of flights or not operating at all. I looked on FlightRadar24 as I wrote this article. The table below summarises what I found. Across the region it shows an up to 94.9% reduction in flights. The first column shows flights that were scheduled to operate on the day the crisis started. The second column the flights that were operating at lunchtime one week later. The third column some notes on the nature of the flights, showing that not all Qatar Airways flights were to or from Doha, and that Qatar Airways had cargo flights operating. If aircraft were turning their transponders off they might be missing from this data. The re-launch of operations is not, in my view, a return to normal. They look to me first of all like an attempt for the Sheikhs in charge to save face. Emirates Group including both airline operations and dnata produced $39.6bn annual revenue and $6.4bn profit in their 24-25 financial year. Etihad generated $476 million profit and $6.8bn revenue in 2024 according to their own statements. Nominal GDP in the United Arab Emirates was $552.3bn (£412.9bn) in 2024, according to the World Bank. Take away Abu Dhabi’s oil and gas, and aviation represents a significant slice of this pie. The Sheikhs will want to keep up the appearance of things going normally. The re-launched flights also appear partly designed as a controlled evacuation, like lifeboats on a ship. Launching and operating the “boats” involves a degree of risk. So does staying on a “ship” that may or may not be sinking. Individual passengers must judge the risk for themselves. Flight movements like this present three sets of challenges. First is staff rostering. I would hope that the operating airlines are crewing the flight only with volunteer Flight and Cabin Crew, and providing appropriate risk pay. If flying is compulsory for Flight and Cabin Crew or risk pay is not thought fair, some staff may not be keen to return to duty once they reach a safe country. Eventually the airlines could have aircraft stranded and crew shortages. The second challenge is safety. Airborne Early Warning and Control monitoring aircraft appear to be patrolling the skies to ward commercial planes away from risks, according to FlightRadar24. But no avoidance system is perfect and Iran’s behaviour may be unpredictable. In addition the downing of three F15s by friendly fire in Kuwait opens the possibility of a terrible yet unintentional tragedy. The third challenge is in customer expectations. Air travel is difficult, unusual and expensive for most consumers. Travellers based outside of the Gulf may trust the airline implicitly and not form a realistic judgement of the risk of travel themselves. Leaving passengers stranded in transit at the beginning of the conflict is terrible but forgivable. Allowing it to happen again is not. Middle Eastern airlines are now faced with an unprecedented cocktail of risk. High fuel prices, loss of revenue, unknown future impact on demand and the risk of aircraft being shot out of the sky are bad enough. But while these airlines score highly on safety audits, they also prize public image. Some have a legacy of an overbearing management culture. None of the countries impacted have a free press or a culture of disputing the government’s line. Combining these factors with current events could produce a high stress operating environment prone to error and misjudgement. They must now decide whether to up-gauge the re-launched operations, maintain a controlled evacuation schedule or make a strategic suspension. Their decisions now will influence their market share, customer trust, brand perception and even possibly the entire future of mass market Middle Eastern aviation hubs. Airline rebooking policies suggest they are unprepared and possibly naïve I lived in Doha working for Qatar Airways between 2007 and 2012. From time to time I asked people what they thought about the risk of conflict with Iran. I was lucky to be able to discuss this topic with both senior executives and my peers. Most people had not given serious conflict a second thought. Almost none were happy to discuss it. The American, European and Australian members of the leadership team at Qatar Airways I spoke to appeared to have little if any knowledge of contingency plans. One senior executive, a CEO direct report, told me in that he had heard there were plans but did not know what they were. Understandably, the Gulf airlines have not yet made significant public comment about the crisis. What they have published is their rebooking policies. These are defined by Revenue Management, normally the head of Inventory Management. They are absolutely within the core scope of Airline Revenue Economics. Reading the rebooking policies, it looks to me like the airline’s senior leadership team are unprepared. They also appear naïve. There are five causes for concern. First is an apparent focus for immediate cash preservation rather than long-term passenger retention. Qatar Airways only permits rebooking to flights within 14 days and only for flights before 15 March. Emirates allows rebooking to 30 April but only for passengers booked until 31 March. Etihad is slightly more generous in one sense but not another – they allow rebooking to 15 May but only for flights on or before 21 March. Gulf Air seems to have copied Etihad. Flydubai is allowing rebooking within 30 days of the original journey. I cannot even find a rebooking policy on Kuwait Airlines website – if you can and I am missing something obvious, please let me know. The airlines appear to still be in the seasonal world of Revenue Management, preserving seats for the Easter and Summer peaks. If the crisis continues, those peaks are probably already gone. Instead the airlines should permit any passenger on any flight to rebook or cancel, up to a reasonable limit. I would suggest at least 30-June for the time being, and increase this limit day-by-day. Most passengers book at most three or four months ahead. Knowing that they can rebook or cancel will give passengers confidence to book alternative airlines, while they are still available at reasonable prices. It should also help passengers who have not yet started their flights feel that they can still trust flying with a Middle East airline. Such generous terms for rebooking and cancellation will come with a significant operational impact for the airlines though. If permitted without limit they will flood the call centre with requests about flights far in the future and the call centre will not be able to cope. This leads to the second cause for concern with the rebooking policies – they need to reassure travellers that their journey will be addressed, but not necessarily immediately. I would suggest a statement that only journeys up to five to seven days in the future will be handled by the call centre. Qatar Airways says that passengers should only contact them if flying with 48 hours. That seems sensible for the immediate term but might be too little as time moves on. Starting with 48 hours and moving to five to seven days later could work. Emirates, Etihad and Gulf Air all remind passengers that they should approach their travel agent if the flight was not booked with Emirates. That also seems sensible. If I were running the call centre, I might advertise accepting changes for flights five days in the future but informally accept changes from customers with flights up to seven days, provided this is operationally feasible at the time. The third cause for concern is confusion about bookings made with loyalty points. Reports on FlyerTalk, a bulletin board, suggest that rebooking requests are being rejected if tickets were paid for with points. Airline loyalty generates large amounts of income for airlines. It is unreasonable for airlines to treat changes for loyalty bookings different to cash bookings at this time. Next up if flippant coverage of refunds. The policies should make it clear to passengers that if a refund is issued the travellers will lose their rights and consumer protections. It should also be obvious that a refund may not be sufficient to cover a passenger’s costs of buying a new ticket if they are currently part way through their journey. Airlines should not necessarily be encouraging passengers to take a refund at this time, especially if the travellers are only partially through their journey. They have a moral and in some markets a legal duty of care to their passengers. It should be clearer that passengers will understand that they relinquish their consumer protections when requesting a refund. The fifth and final cause for concern is the lack of clarity regarding the ability of Middle Eastern airlines to re-book on other IATA carriers. There will be many re-protection agreements in place, specifically designed for cases of extreme disruption. Rebooking policies should make it clearer exactly when and where agents are authorised to rebook to partner airlines. All the causes for concern suggest that Revenue Management have designed rebooking policies for short-term operational disruption and not achieving long-term strategic objectives. Good rebooking policies must protect passengers, preserve goodwill and reduce pressure on the call centre servicing bookings. Unfortunately, the current policies appear to achieve little or none of these. To some extent this scenario is beyond Revenue Management’s pay grade. Airline CEOs and management boards have had decades to consider the risk of an Iran crisis, which while somewhat unexpected at this exact time was not a bolt from the blue. The published rebooking policies present cause for concern. They reveal airlines that are operationally savvy yet strategically underprepared. The lessons they learn now and how quickly they adjust to emerging events could impact their ability to operate profitably for years to come. My model rebooking policy This proposal is more focused on protecting passengers, preserving goodwill and ensuring the operational stability of the call centre. Read more