As airlines work to make sense of the fallout from the US and Israeli attacks on Iran that began on 28 February, it is becoming clear that the crisis will impact different operators in very different ways.
As airlines work to make sense of the fallout from the US and Israeli attacks on Iran that began on 28 February, it is becoming clear that the crisis will impact different operators in very different ways.
A case in point is Lufthansa Group, which released its earnings at the end of last week, becoming the first major carrier to do so since the crisis began, alongside Turkish Airlines.
Describing “opportunities and challenges” arising from the situation, Lufthansa said demand for its services to Asia and Africa have skyrocketed in the absence of the big Middle East connectors. It also played down the impact of higher fuel prices, saying it is hedged at a level that reduces the impact of that dynamic.
Turkish, meanwhile, is closely monitoring the situation. Middle East flights make up around 6% of its capacity and revenue, the carrier says, noting that its operations to the region had declined from around 100 daily flights to 35, amid suspended operations to Iran, Iraq, Syria, Lebanon, Kuwait, Bahrain, Qatar and the UAE.
It is keeping a close eye on whether the situation persists beyond a month, when it would “start to impact the Ramadan Eid holiday season and Easter in April”. That would prompt Turkish (and plenty of other operators) to sit down and recalculate its earnings expectations for the year.
Also speaking last week, European budget carrier Wizz Air cut its full-year financial forecast over the impact of the Middle East conflict. It had previously expected a net result ranging from a €25 million loss to a €25 million profit at the end of the fiscal year on 31 March. But it says the Middle East crisis will have a further “negative impact” of €50 million, about one-third of which is the result of suspending certain services to the region.
The discussion comes amid a gradual resumption of commercial operations by several Gulf carriers. As early as 6 March, UAE-based operators – including Emirates and Etihad Airways – announced plans to resume limited international operations.
However, airspace over neighbouring Qatar remains closed, meaning national carrier Qatar Airways will continue to suspend its operations.
Meanwhile, as the earnings season largely draws to a close, Cathay Pacific will release its annual earnings in the coming days.
And China’s ‘big three’ remain among the small group of carriers yet to release their fourth quarter and full-year data. That is expected by the end of the month.
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