Israel-Hamas War Hits Airlines In The Region Hard

This year, the Arab Air Carriers’ Organization invited its members to what many of them would consider an airline manager’s paradise. Saudi Arabia, host of the organization’s annual general meeting, is an “all-too rare example of a government fostering connectivity as a key element of economic growth,” Willie Walsh, director general of the International Air Transport Association said.

Unfortunately for many Arab airlines, the reality is quite different from what one might consider to be paradise. The Israel-Hamas war has seriously affected their business and operations, in particular for the airlines that are either based near the hostilities or have tight connections and many flights into Israel, or both. They include Royal Jordanian, Royal Air Maroc, Middle East Airlines (MEA) and Egyptair.

• Carriers in Middle East feel fallout of Gaza war
• Middle East Airlines grounds more than half of its fleet
• Royal Jordanian sees major drop in bookings

El Al, not an Arab Air Carriers’ Organization (AACO) member, is continuing operations from its Tel Aviv home base under difficult and dangerous conditions, while most other carriers have stopped flying there for the time being. Etihad Airways, based in the United Arab Emirates’ capital Abu Dhabi, is still flying a daily Airbus A320 service into Tel Aviv, having opened the route in 2021 after the two countries officially entered diplomatic relations.

One of the worst hit of the Arab carriers is Royal Jordanian. Its Amman home base is just 68 mi. east of Tel Aviv. CEO Samer Majali said there has been a substantial drop in tourist bookings, a key source of revenues for the airline. “We are quite negatively affected,” Majali said at the AACO event. He pointed out that it is not the first time violence between Israel and Palestinians has escalated in the past decades. Royal Jordanian has also had to manage through two Iraqi wars and the conflict in Syria, Majali noted. This time, the impact is not only on demand, but on operations: “Flying westbound is difficult, to the north is also an issue,” he said.

For its European and North American flights, the carrier is sending its aircraft first south and then turning them northwest to cross the Sinai Peninsula with ample distance from the Gaza Strip-Israeli border, adding significant flight time and cost. “We are quite hemmed in,” Majali said.

Middle East Airlines, based in Beirut, is dealing with reduced insurance coverage of its aircraft and so has cut its schedule significantly more than 50%. Many of its aircraft are now parked abroad for security reasons, including in Istanbul, and are not flying. The carrier is keeping only eight of its 22 aircraft in service for the time being. At the end of October, it published a strongly curtailed schedule effective through early December that is subject to change. Middle East Airlines is also allowing its passengers full refunds and rebookings.

For Royal Air Maroc, Israel was a huge market with almost 1 million Jewish Moroccans living in the country. But  the airline stopped flying to Tel Aviv due to security concerns. Royal Air Maroc has also been affected by another major disaster, the September earthquake in its home country. CEO Abdelhamid Addou said traffic came back relatively quickly after that, but he expects passengers’ return to take much longer this time, even after the war eventually ends.

AACO Secretary General Abdul Wahab Al Teffaha said it is impossible to quantify the damage to airlines, “but there is definitely an impact felt by [airlines in] the adjacent countries Egypt, Jordan and Lebanon.” However, he also pointed out that the effect “did not spill over to the rest of the region.” Indeed, many airlines, particularly in the Gulf, continue to report strong demand. Adel Ali, CEO of Sharjah, United Arab Emirates-based low-cost carrier Air Arabia, said there have been “some pockets of markets slightly impacted mainly from the Far East.” But the airline is still operating at load factors in excess of 80% and sees no overall signs of weakness. “The risk is there, and we all need to mitigate and adapt,” he said.