Regional air travel is beginning to normalize

Watch this space

A spate of airlines is steadily restoring their schedules as security conditions continue to improve over the course of the fragile US-Iran ceasefire. In Kuwait, Jazeera and Kuwait Airlines resumed full operations at the Kuwait International Airport yesterday, while the UAE officially ended what’s left of its airspace restrictions, some of which had remained in place for foreign carriers over the last two months despite a limited but steady activity for UAE carriers. Meanwhile, Indian carriers also staged a return to Bahraini and Qatari airports over the weekend.

Caution still prevails: The Indian embassy in Doha cautioned that flight schedules remain subject to the region's fragile security situation, whereas the UAE said real-time monitoring remains in place, suggesting a wait-and-see approach rather than a full risk reset.

The easing of restrictions means more seats for any given destination, potentially creating downward pressure on record-high fares, but any reductions would be limited due to the surge in jet fuel prices. Fares for long-haul routes, however, are likely to lag. Assuming a truce that holds, prices are expected to normalize in August.

Enter the next likely target of US sanctions against Iran: Nobitex. Despite avoiding a spate of Western sanctions against Iran over the last few years, Iranian crypto trading platform Nobitex is coming under the spotlight after a Reuters investigation revealed that it was founded by two siblings from the well-connected Kharrazi family.

This could be bad news for Iran as the US ramps up efforts to crack down on the crypto workaround, with about 70% of Iran’s crypto transactions taking place on Nobitex. The platform serves as a key “bridge to global crypto markets,” helping ordinary Iranians and regime-affiliated entities move money around the US-controlled global financial system. Earlier in April, the US Treasury froze some USD 344 mn in crypto assets linked to Iran’s central bank.

Nobitex remained online even during the government-imposed internet shutdowns as the war raged on, moving around USD 100 mn, or 20% of its usual transactions, Reuters reports, citing data from the investigative firm Crystal Intelligence.

Sign of the times

The region’s digital recovery is going to be a long haul: Amazon’s restoration of its cloud operations in the UAE and Bahrain following damage from drone strikes earlier in the conflict will take several months. The tech giant has suspended billing for affected customers in the region as it grapples with the physical aftermath of the conflict.

The current state of play: AWS’s service health dashboard currently lists 37 services across both countries as disrupted. The company is advising clients to migrate accessible workloads to other global regions or restore from remote backups.