An Etihad Airways Boeing 787-9 “Dreamliner” aircraft displays Israeli and Emirati flags after landing upon arrival from the United Arab Emirates (UAE) at Israel’s Ben Gurion Airport near Tel Aviv, on the corporate’s first scheduled business flight from Abu Dhabi, on April 6, 2021.
JACK GUEZ | AFP | Getty Images
DUBAI, United Arab Emirates — Airlines have seen a drop in bookings within the weeks following the beginning of Israel’s war against Hamas within the Gaza Strip, and a few expect it to chop into their future profits.
In response to travel analytics firm ForwardKeys, international flight bookings were 20% below 2019 levels within the three weeks after the attack by the Palestinian militant group Hamas against Israel on Oct. 7, and 5 percentage points below the period of three weeks before the attack.
The terrorist assault killed some 1,200 people and saw an additional roughly 240 taken hostage, triggering probably the most ferocious Israeli response that the region has ever seen. Israel’s aerial bombing campaign and subsequent ground offensive in Gaza has killed greater than 11,000 people, based on health authorities there.
In the times following the attack, major airlines suspended or reduced flights to Israel’s Ben-Gurion International Airport in Tel Aviv. But air travel demand to and from other countries and regions was noticeably affected, too.
Within the three-week period before Oct. 7, ticket issuance from the Middle East was just 3% below 2019 levels, based on ForwardKeys data, illustrating the regular recovery of the sector from the Covid-19 pandemic. Within the three-week period after Oct. 7, against this, ticket issuance from the Middle East was 12% lower than 2019 levels, marking a difference of 9 percentage points.
But the largest drop when it comes to international departures was in flight ticket issuance from the Americas, which was actually up 6% from 2019 levels within the three weeks before the attack, and fell to 4% below those levels within the three weeks after, totaling a drop of 10 percentage points.
International arrivals to the Middle East meanwhile plunged by 26 percentage points in that time-frame, with the largest drops by country being Israel, followed by Saudi Arabia, Jordan and Lebanon. ForwardKeys draws its data from the International Air Transport Association’s industrywide ticketing database which incorporates major international carriers, but not budget airlines like easyJet or Ryanair.
Stateside, not less than one major airline made a profit warning in regards to the war.
United Airlines in mid-October said that pricier jet fuel and a halt to its Tel Aviv flights due the Israel-Hamas war would eat into its profits within the last three months of the yr. United had more service to Israel than any of the U.S.-based airlines with links from Washington, D.C.; Newark, Recent Jersey; and San Francisco, accounting for two% of its capability.
The fourth-quarter guidance for United was “bleak and worse than our estimates,” Helane Becker, an airline analyst at TD Cowen, wrote in a note after the carrier’s earnings estimate. “Given the projections that this shall be an extended war we’re taking a look at the lower end of the forecast range and assuming no service by yr end.”
‘So long as it’s protected, we will keep flying’
The United Arab Emirates’ national airline, Abu Dhabi-based Etihad Airways, continues flying to Israel. It began flying its Abu Dhabi-Tel Aviv route in April 2021, roughly eight months after the signing of the Abraham Accords, which normalized relations between Israel and the UAE.
“It’s impacting,” Etihad CEO Antonoaldo Neves said of the Israel-Hamas war, talking to CNBC’s Dan Murphy on the Dubai Airshow on Monday. “Our demand to Israel continues to be there. However it’s not as big because it was previously.”
“We keep flying, very protected. I follow up day by day, day by day. And we just hope it gets over soon. For the sake of everyone involved on this conflict.”
“I’ll not let you know it is not impacting. … And when things are back to normal, I’m sure that everybody’s going to keep in mind that Etihad was not driven only by profits,” Neves said.
“We’ve our obligation as a transportation company, to be there once we earn a living and once we make less money. So that is the approach we take, so long as it’s protected, we will keep flying.”
Dubai’s flagship Emirates Airline, meanwhile, was optimistic about future demand.
“So far as the business is anxious — look, now we have been in an element of the world that has seen for the last 35 years loads of geopolitical issues,” Tim Clark, president of Emirates Airline, told CNBC.
“I won’t be smug and say we’re impervious to issues, because it is a really difficult issue for the Middle East to take care of.”
“But so far as our bookings are concerned, they continue to be robust,” he said. “We’ll all the time get what we call a certain flakiness within the Asian markets where, you recognize, they get a bit bit concerned. … But generally, up to now, so good, we’re looking very strong.”
Clark pointed to imminent events that can bring visitors to Dubai just like the COP28 climate summit in early December in addition to Christmas and Recent Yr’s.
In an illustration of its long-term optimism, Emirates Airline on Monday kicked off the primary major deal of the 2023 Dubai Airshow with an order for 95 Boeing aircraft at a worth of $52 billion.
“Plenty of other things are occurring in Dubai and Dubai itself is hugely potent city now, global metropolis, which is bringing in business,” he said.
“So with all of that, notwithstanding the difficulties of the Middle East in the intervening time, I feel we shall be OK.”
— CNBC’s Leslie Josephs contributed to this report.