Qatar diplomatic crisis affects economy and air travel

Saudi Arabia and allies including Egypt, the United Arab Emirates and Bahrain cut diplomatic ties and transport links with Qatar on Monday, accusing the Gulf state of supporting extremism.

Besides the suspension of flights, the move has already affected Qatari economy and food supplies.

Economic Impact

Qatar's currency came under pressure on Tuesday as Gulf Arab commercial banks started holding off on business with Qatari banks due to the diplomatic rift in the region.

Banking sources said some banks from Saudi Arabia, the United Arab Emirates and Bahrain delayed letters of credit and other deals with Qatari banks after their governments cut diplomatic ties with Doha.

Saudi Arabia's central bank advised banks in the kingdom not to trade with Qatari banks in Qatari riyals, the sources said.

Flights halted

The economic fallout was already hitting home as Abu Dhabi's state-owned Ethihad Airways, Dubai's Emirates Airline and budget carriers Flydubai and Air Arabia said they would suspend all flights to and from Doha indefinitely from Tuesday morning.

Qatar Airways said on its official website it had suspended all flights to Saudi Arabia. Many Gulf airports, including in Qatar, are major hubs for international connecting flights.

As a result, Qatar's state-of-the-art Hamad International on Tuesday was deserted while passengers were left stranded after their flights were cancelled.

Among airlines, EgyptAir, flydubai and Bahrain's Gulf Air joined Etihad and Emirates in saying they would suspend all flights to and from Doha.

Food supplies

Two Middle East trade sources pointed to thousands of trucks, carrying food supplies, stuck at the border with Saudi Arabia which were unable to cross over into Qatar.

About 80 percent of Qatar's food requirements are sourced via bigger Gulf Arab neighbours. Trade sources pointed to the likelihood of shortages growing in Qatar until the crisis eased.

Qatar is dependent on the UAE and Saudi Arabia for its white sugar imports, which are estimated at less than 100,000 tonnes annually. Consumption is traditionally higher during the Muslim holy month of Ramadan, which is currently being observed.

The signs of panic are already showing. People rushed to stock up food supplies in supermarkets in Doha, creating long queues.