Skip to content Skip to Search
Skip navigation

Gulf carriers set to benefit from ‘reordering’ of aviation industry

Supplied
Qatar Airways and British Airways deepen ties as a joint business
  • Qatar Airways and British Airways add 42 countries to shared network 
  • Deal follows Emirates and United Airlines codeshare agreement
  • Diversion of routes to bypass Russian airspace results in increased costs

Gulf carriers are likely to strike up new partnerships with foreign airlines as the war in Ukraine and the lingering impact of the coronavirus pandemic threatens to reorder the global aviation scene.

The reshaping of the airline industry as a result of pandemic-induced change is opening up new, and more competitive avenues for global airlines and carriers from the Gulf and Turkey will “largely benefit from that outcome”, said Linus Benjamin Bauer, founder and managing director of Bauer Aviation Advisory.

His comments followed the announcement that Qatar Airways and British Airways have deepened their ties to create what they describe as the world’s largest airline joint business.

“In light of the Emirates-United, Qatar-British Airways and Qatar-Finnair partnerships, we’ll witness more partnerships between the Gulf carriers and foreign carriers to come,” Bauer told AGBI.

“For airlines, the pandemic has provided the opportunity to reevaluate their existing business models and network strategies including alliances and partnerships.”

Qatar Airways and British Airways completed the latest phase in the expansion of their partnership earlier this week, adding 42 new countries including Italy, the Maldives, Norway, Singapore and Sweden to their shared network.

The expansion will enable connecting journeys on single tickets through Doha and London, bringing the total number of destinations served by the two airlines to 185 across more than 60 countries.

The deal comes just days after Dubai’s Emirates and US carrier United Airlines signed a codeshare agreement.

Starting in November, Emirates customers flying into Chicago, San Francisco and Houston – three of the biggest business hubs in the US – will be able to connect to United flights to and from nearly 200 cities across the US on a single ticket.

Qatar Airways Group chief executive Akbar Al Baker said the joint business “cements both airlines as industry leaders”.

Sean Doyle, chairman and CEO for British Airways added: “This is a huge milestone in our long-standing relationship with Qatar Airways, an airline that shares our passion for customer service, choice and flexibility.”

Bauer said the pandemic and the war in Ukraine have “pushed the importance of alliances and partnerships to another level”. 

“Many routes between Europe and Asia overfly Russia, hence airlines will now need to rethink their network strategies by taking these uncontrollable variables into account.

“The diversion of long-haul routes from Europe to Asia bypassing Russian airspace and areas of tension in the Middle East will result in longer journey times and increased costs, making some long-haul routes unsustainable – even with fuel-efficient aircraft like the A350,” he said.

“Such a negative impact results in airlines’ search of a new business or network strategy by shifting flights away from Russia and towards the Gulf.”

Bauer added that the recent partnership deal between Finnair and Qatar Airways is an example of this.

Finnair’s high reliance on the use of the Russian airspace for the successful gateway to Asia from Helsinki has compromised the entire business model and strategy of Finnair. 

“The recently announced partnership with Qatar Airways will help Finnair to restore its successful network in Asia in an indirect way through the partner Qatar Airways,” he explained.

But John Grant, chief analyst at global travel data provider OAG and partner of Midas Aviation, played down the significance of the new Qatar Airways-BA deal.

“This is really just a deepening of a relationship that has been ongoing for some time now and of course with the added dimension that Qatar are a major shareholder in IAG, the parent company.

“To the passenger and wider market it will make minimal difference; the two airlines were already actively selling each other’s services and earning points on their respective travel programmes. 

“Perhaps for BA it will hope that deepening its relationship with a carrier with a perceived higher service offering will assist in rebuilding its own service position – but that will take more than just an extension to an existing agreement,” he added.

Latest articles

It is hoped the use of AI will speed up the time-consuming process of screening patients for cancer

Mubadala-backed US startup working on AI cancer care

A US genomics startup, backed by Abu Dhabi’s sovereign wealth fund Mubadala, is working with ChatGPT creator OpenAI to improve cancer screening and treatment using artificial intelligence models. Color Health, which uses data science and machine learning for genetic testing and counselling in hereditary cancer and heart conditions, has developed an AI assistant, or “copilot”, […]

Gems operates more than 60 schools with over 130,000 students across the Middle East and North Africa

Brookfield to invest in Dubai’s Gems Education

A consortium led by Canada’s Brookfield Asset Management is to invest in Gems Education, the UAE’s private school operator. Other members of the group include Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of the Republic of Azerbaijan. Financial details were not disclosed but the investment is expected to be almost $2 […]

Two companies are dominant in the lithium industry – Chile’s SQM and US business Albemarle. In 2023, each commanded about 20 percent of global supply

Saudi Arabia targets Chile for lithium investments

Saudi Arabia’s mining minister Bandar Alkhorayef will visit Chile next month to negotiate a deal to secure lithium to support the kingdom’s ambition to expand its electric vehicle (EV) sector, a news report said. Alkhorayef will meet with his counterpart in Santiago, Reuters reported, quoting a Chilean government statement. The report said the two officials will discuss […]

Oman's tourism revenue increase was driven by a 15 percent rise in hotel guest numbers

Luxury hotel revenues in Oman rise to $242m

Oman’s luxury hotels continued to make money in April as the number of guests surged. The revenue of three- to five-star hotels rose 11 percent year on year to OMR93 million ($242 million), the state-run Oman News Agency said, quoting the National Centre for Statistics and Information data. The revenue increase was driven by a […]