Loss of Airlines in Iran to Open New Doors, Soon

On Monday Saudi Arabia banned the air traffic to and from Iran. Both citizens of these countries will neither have the permission to enter each others land, except for Pilgrimages. It is highly unlikely that Iranians will pilgrim to Saudi Arabia like the past years in the act of Iran starting to sanction Saudi Arabia in ecnomical and political measures. Bahrain halted flights to and from Iran the day after.

The Saudi-Iranian air market is mostly active during the Pilgrimage period, but Mahan Air and Saudia operated Mashhad – Dammam regularly. Bahrain – Iran was an all-year market with airlines such as Gulf Air, Iran Air, Mahan Air and Zagros Airlines operating several Iranian destinations multiple times per day. Iran Air and Mahan Air will be affected badly when the Pilgrimages season starts. They can not do anything about it either when they now are banned from the Saudi airspace.

Iranians are still allowed travels to Saudi Arabia only for Pilgrime purposes, however, Saudi will see a significant dip of Iranian travellers to Saudi compared to previous years. The Pilgrimage accounts for 2-3% of Saudi’s GDP, and Iranians account for 25% of the Pilgrimes.

Most of the flights from Iran to Bahrain were used by passengers connecting to European destinations. Gulf Air operated Tehran, Shiraz and Mashhad. Mahan Air, Iran Air and Zagros Airlines also operated the latter destination, but obviously with less connecting passengers. The Iran – Europe market is a major market with many airlines competing on it. The Iran – North America market is also another major market, however Gulf Air does not operate any North American destinations.

Who will compesate the recent loss of airlines in Iran? Tehran had some 6 weekly flights, Shiraz 4 and Mashhad 10-12* to Bahrain. The Gulf carriers Emirates, Qatar Airways and Etihad will probably see their chance and take it. Emirates who operate four daily flights to Tehran and five weekly to Mashhad may increase its frequency. The airline has before shown interest to add more frequency on flights to Iran but the limit of 33 weekly flights from UAE to Iran is already reached. In that case the governments need to renew the agreement. How likely that is can be discussed as UAE just downgraded the diplomatic relations with Iran to a Chargé d’affaires level. One move Emirates can do, and might do, is to add the double decker A380 on flights to Iran. Qatar Airways flies to Tehran, Shiraz and Mashhad with mulitple daily flights. The airline has plans to increase its seat capacity by 40%* when operating an all-A330 service to Tehran as of 6 March 2016. Etihad Airways who only operates Tehran will also increase from daily to two daily in some few weeks. These changes were although announced a while ago. What we likely will see is a rush competition between these three airlines. The compensation of the Bahrain flights will mostly be in focus. But they will also take a small glance on the oppertunities of seasonal flights to Saudi Arabia. As mentioned before those numbers will significantly decrease. But that does not mean that the three big Gulf airlines should or will disregard the oppertunities presented. Especially now when Iranian airlines are banned in Saudi Arabia, it opens door for those three larger airlines.

 

Photo: Dubai Airports

 

* = the numbers are estimated

* = presuming A320 has 140 seats, A330 260 seats