Situation in the Middle East and possible implications for BA
We have no idea yet how the Iranian regime will react to yesterday’s events (the merits of which I do not want to get into on here) but it has doubtless occurred to many people that there could be a significant escalation of conflict in the Middle East now. I have spoken to friends, colleagues and clients in the UAE, Israel and Saudi and there is tremendous nervousness about what may be around the corner.
Apart from obviously hoping things de-escalate, it did occur to me that the implications for BA may be profound. Off the top of my head, at least the following must be keeping some from sleep at IAG:
- a further surge in oil prices for which there is inadequate forward hedging protection;
- the need to re-route certain flights to SE Asia (SIN, BKK, KUL, etc) and the associated impact on timings and logistics;
- the need to step up security checks across the entire network, and again the implications for timings and logistics;
- the suspension of certain routes including DXB, DOH and AUH due to safety concerns; and
- the possibility of certain Middle Eastern airports having to close to civilian traffic and, in extremis, EK, QR and EY having to suspend all of their commercial operations.
What are people’s thoughts? It seems a little callous worrying about this stuff right now as we teeter on the brink of such a serious situation but thinking this stuff through can be helpful.