Gulf airlines ease loyalty rules amid disruptions

Etihad Airways and Qatar Airways have moved to soften loyalty programme requirements and booking policies as prolonged regional tensions disrupt flight operations, signalling a strategic shift by Gulf carriers to retain customer confidence amid operational uncertainty.

Abu Dhabi-based Etihad Airways said it would reduce qualification thresholds for its Etihad Guest programme by 25 per cent until March 2027, a measure aimed at helping frequent flyers maintain or upgrade their membership tiers despite curtailed travel patterns. The airline has also introduced more flexible booking terms, including fee-free cancellations on selected fares during the same period, reflecting a broader industry response to volatile travel conditions.

Qatar Airways, one of the region’s largest long-haul carriers, has adopted a similar approach by extending benefits within its Privilege Club programme. The airline is allowing members additional time to retain their tier status and has adjusted earning criteria to account for disrupted travel schedules. Executives familiar with the changes said the measures were designed to “protect customer loyalty” at a time when flight rerouting, airspace restrictions and cancellations have altered travel frequency across key markets.

The policy adjustments follow heightened instability across parts of West Asia, where escalating hostilities involving Iran have led to intermittent airspace closures and rerouting of commercial flights. Airlines operating through the Gulf have been forced to navigate longer flight paths, increased fuel costs and scheduling unpredictability, affecting both passenger demand and operational efficiency.

Industry analysts note that loyalty programmes, once primarily marketing tools, have become central to revenue strategies for major carriers. Gulf airlines in particular rely heavily on premium passengers and frequent flyers, making retention critical during periods of geopolitical strain. “Frequent flyer schemes are no longer just perks; they are core financial assets,” an aviation consultant based in Dubai said, pointing to the growing role of co-branded credit cards and partner networks in sustaining airline revenues.

Data from global aviation bodies indicates that passenger traffic across key Middle East corridors has shown uneven recovery patterns as airlines adjust to shifting airspace dynamics. Routes linking Europe and Asia, many of which pass through Gulf hubs, have experienced schedule changes, with some carriers opting to reduce frequencies or deploy larger aircraft to consolidate capacity.

Etihad’s decision to lower tier thresholds effectively reduces the number of miles or tier points required for status upgrades and renewals, easing pressure on travellers whose flying activity has declined. For frequent business travellers, maintaining elite status typically brings benefits such as lounge access, priority boarding and additional baggage allowances, which airlines view as critical to sustaining premium demand.

Qatar Airways’ extension of Privilege Club benefits follows a series of programme enhancements over the past two years, including integration with Avios, a widely used loyalty currency shared with several international carriers. The move has broadened redemption options for members, allowing them to use points across a larger network of airlines and partners.

The broader aviation sector has seen similar adjustments during periods of disruption, notably during the COVID-19 pandemic, when airlines globally extended elite status and waived fees to preserve customer relationships. Analysts suggest the current measures reflect lessons learned from that period, with airlines acting more swiftly to maintain engagement rather than waiting for demand to recover.

At the same time, airlines face a delicate balance between offering flexibility and protecting margins. Fee waivers and reduced qualification thresholds can dilute short-term revenue, particularly from ancillary services, but are viewed as necessary investments in long-term customer loyalty. Executives at several Gulf carriers have indicated that retaining high-value passengers remains a priority, especially as competition intensifies among regional and international airlines.

Operational challenges linked to the regional situation have also had knock-on effects on cargo operations, an important revenue stream for Gulf carriers. Longer flight paths and airspace restrictions have increased transit times and costs, prompting airlines to adjust pricing and capacity allocation. Cargo demand, particularly for time-sensitive goods, has remained resilient, providing some offset to passenger-related disruptions.

Travel agencies and corporate clients report that flexible booking policies have become a key consideration for travellers navigating uncertain itineraries. “Clients are prioritising airlines that offer the ability to change or cancel without penalties,” said a senior executive at a regional travel management firm, noting a shift in booking behaviour towards carriers perceived as more accommodating.

The competitive dynamics between Gulf airlines are also shaping the response. Etihad, which has undergone restructuring and capacity recalibration over the past decade, appears focused on strengthening its loyalty base as it expands routes and partnerships. Qatar Airways, with its extensive global network and alliance ties, is leveraging its scale to maintain engagement with high-frequency travellers.