Qatar Airways to cut costs by $1.2 billion after Gulf reconciliation

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Qatar Airways said it would see its operational costs drop, as the airline’s flights are no longer prohibited from Saudi Arabia, UAE, Egypt, and Bahrain airspaces.

Qatar Airways Chief Executive Officer (CEO) Akbar al-Baker announced that the airline’s operational costs would decrease by $1.2 billion, following the Gulf reconciliation, Anadolu News Agency reported.

“The reopening of airspace following the Gulf reconciliation will have a positive impact on the company’s financial performance,” al-Baker told the state television in an interview on February 2, 2021. However, the COVID-19 pandemic would continue to have an impact on the airline’s operations. 

On January 4, 2021, Saudi Arabia and Qatar agreed to reopen airspace, sea and land borders for the first time after a three year long blockade. The sanctions on Qatari aircraft, known as the Gulf blockade, were imposed after Qatar was accused of supporting terrorism by Saudi Arabia, United Arab Emirates, Bahrain as well as Egypt in June 2017.

The Gulf blockade had significantly changed the flight operations of the national air carrier of Qatar. For Qatar Airways, the flying time and mileage increased due to the necessary detours. 

Regarding financial damages caused by the Gulf blockade, Qatar Airways demanded compensation from four blockading states in July 2020. The claim was based on ICAO airspace agreements that have been signed in the past. The International Court of Justice (ICJ) ruled in favor of Qatar in the Gulf airspace blockade dispute.


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