SYDNEY/HONG KONG(RAHNUMA): Australia on Wednesday relaxed its travel advice for several Middle Eastern countries, allowing Australians to transit through and travel to the biggest Gulf air hubs with the security of being covered by insurance.
Foreign Minister Penny Wong said the previous “do not travel” advisory had been lowered for the United Arab Emirates, Qatar, Bahrain, Israel and Kuwait after the US and Iran reached an interim deal to end the war.
She said the advisory had moved to “reconsider your need to travel” to those countries, as the security situation could still deteriorate rapidly with little warning.
The removal of the “do not travel” warning is positive for Gulf airlines. They had carried more than half of all passengers flying from Europe to Australia, New Zealand and Pacific Islands before the war began in late February, according to aviation data firm Cirium. Many Australian travelers concerned about the risk of missiles and drones, schedule disruptions and the lack of travel insurance coverage had preferred flights on carriers like Qantas Airways, Singapore Airlines and Hong Kong’s Cathay Pacific Airways that transited in Asia, driving up airfares.
Flight Center Travel Group said on Wednesday that travelers with forward bookings to Europe routed via the Middle East had typically amended or canceled plans due in part to the government warning.
Regaining market share
Emirates said last week it would roll out incentives aimed at winning back travelers worried about the protracted Iran war, focusing on reliability and customer support rather than lower fares because the oil price remained high.
Nathan Gee, head of Asia Pacific transportation research at BofA Global Research, said restored travel insurance and more competitive pricing should help Gulf carriers regain share on routes from Australia to Europe and the UK, but the shift was likely to be gradual rather than swift.
“In the near term, Asian carriers such as Singapore Airlines are still well positioned, as a portion of travelers continue to favor Asian hubs for greater certainty and smoother transit,” Gee said.
He added that with long-haul bookings typically made five to six months in advance, the stronger pricing environment should extend into the next few quarters for Singapore Airlines and Cathay Pacific, even as Gulf carriers restore capacity and step up competition.
Jet fuel prices more than doubled after the Iran war began, leading many airlines to lift ticket prices, cut capacity and add fuel surcharges.
But the price gains have since receded as the prospects of a peace deal improved.
