Gulf carriers fly over Iraq, Iran after military action deters others

Airlines operating out of the Gulf region have continued to make use of Iraqi and Iranian airspace, despite tensions following a US drone strike at Baghdad Airport, and the downing of a Ukrainian passenger jet in Tehran earlier this month. (Shutterstock)
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Updated 20 January 2020

Gulf carriers fly over Iraq, Iran after military action deters others

  • Airspace is a precious commodity for carriers in the region, with troubled skies forming necessary routes

KUWAIT CITY: Gulf airlines still fly in Iraqi and Iranian airspace and to cities in both countries, even as other international carriers have rerouted planes since the US and Iran traded military strikes.

Executives and analysts said carriers in the Gulf, a major transit stop between European and Asian destinations, have few alternative routes to choose from in an area where much of the airspace is kept clear of civilian aircraft for military use.

In the latest flare up, a US drone strike killed a top general in Iraq on Jan. 3 and Iran fired missiles at US targets in Iraq on Jan. 8. In the tense aftermath, Iran’s air defenses accidentally shot down a Ukrainian airliner.

Gulf carriers have grown into major airlines even as regional tensions in recent decades erupted into conflict. Rerouting flights hurts profits, they say, although they also insist that they take every precaution to keep passengers safe.

“Iranian airspace is important for all carriers in this region,” said Adil Al-Ghaith, Emirates’ senior vice president, commercial operations, Gulf, Middle East and Iran.

Dubai-based Emirates and sister carrier flydubai together serve 10 cities in Iran and Iraq, and have continued to use the airspace of both countries for other flights.

Kuwait Airways and Abu Dhabi-based Etihad Airways have continued using Iranian and Iraqi airspace.

At the same time, other international carriers have rerouted flights to avoid Iraq and Iran, including Lufthansa, Air France, Singapore Airlines and Qantas.

Some regional carriers have also rerouted changed their routes. Bahrain’s Gulf Air has redirected European flights away from Iraqi airspace and now flies longer, more fuel consuming routes over Saudi Arabia and Egypt.

“We want to take the safest option even if it costs us a little bit more for a period of time. We can live with that,” Gulf Air Deputy Chief Executive Waleed Abdulhameed Al-Alawi told Reuters.

The UAE told  Emirates, Etihad, flydubai and Air Arabia this month to “evaluate flight path risks” although it said it was up to the airlines to make the final decision on the routes they chose.

“Gulf carriers face a big challenge but that doesn’t mean that risks can be taken — even if that inflicts damage on the business model,” independent aviation consultant John Strickland said.

Ukrainian International Airlines flight 752 was shot down in error after taking off from Tehran on Jan. 8, killing all 176 people aboard. Iran said on Saturday it was sending the flight’s black boxes to Ukraine.


NMC Health removes CEO amid investigation of UAE firm’s finances

Updated 27 February 2020

NMC Health removes CEO amid investigation of UAE firm’s finances

  • Chief Executive Prasanth Manghat was dismissed with immediate effect
  • Chief Operating Officer Michael Davis was appointed as interim CEO

NMC Health has removed Chief Executive Prasanth Manghat with immediate effect and granted its finance chief extended sick leave, as more details emerge from an investigation into the UAE health care firm’s finances.
Abu-Dhabi based NMC said after Wednesday’s market close that it had appointed Chief Operating Officer Michael Davis as interim CEO to succeed Manghat and said Chief Financial Officer Prashanth Shenoy had been placed on longer leave.
Manghat had been with NMC for about 10 years in various roles, including deputy CEO and CFO, and had seen the company through its 2012 listing on the London Stock Exchange.
The moves are the latest blow for the firm whose shares have lost about two thirds of their value since US-based short-seller Muddy Waters late last year questioned its financial statements.
NMC had said at the time that the report was “false and misleading,” but had opened its own investigation into company finances. The review is being led by Louis Freeh, who was director of the Federal Bureau of Investigation in the United States from 1993 to mid-2001.
NMC on Wednesday said the investigation committee had identified supply chain financing arrangements that were entered into by the company and “which are understood to have been used” by entities controlled by founder BR Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Reuters was unable to reach Manghat, Shetty and Muhairi for comment outside business hours on NMC’s latest statement.
The company, which operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes in 19 countries, said the committee was reviewing a drawdown of its facilities that had not been disclosed or approved by the board.
Its shares closed 6.6% higher before Wednesday’s statement.
NMC also said it had suspended a member of its treasury team over possible discrepancies in its bank statements and ledger entries, and said it would be unable to publish its annual results till at least the end of April.
Indian billionaire Shetty resigned as NMC’s co-chairman this month, after British regulators said they were looking into NMC following a disclosure that he had misstated the size of his stake.
Shetty had said this month that his NMC shareholdings were under a legal review looking into a large portion of his shares signed to two of NMC’s top investors in 2017, while some of his other stock had been pledged as security against loans.