MediumI Geo-Economics & Chokepoints4 November 2026, Wednesday
Saudi flight cancellations choke Nepal's labour corridor
According to the Kathmandu Post on 4 November, some of the roughly 400,000 Nepali workers in Saudi Arabia are stranded in the country by flight cancellations caused by Houthi attacks. About 45% of flights scheduled from Saudi airports between 8 and 25 October were cancelled.
According to a 4 November report by the Kathmandu Post and ANN, published in Dawn, the cancellation rate at King Khalid Airport in Riyadh reached 86%. Reuters data from 26 October show that 4,071 of 4,736 flights in Riyadh did not operate between 8 and 25 October. The rate was 42% in Dammam and 46.7% in Abha. Nepal Airlines and Himalaya Airlines have cancelled 18 Kathmandu–Dammam flights since 11 October; IndiGo has suspended services to 4 Saudi cities until 14 November, and Air India its Riyadh and Dammam flights until 7 November.
Fatalities underline the risk. According to the Kathmandu Post, debris from a drone downed over the Shaybah oilfield on 21 October killed a Nepali worker. On the same day an attack on Dammam airport killed 2 people and injured 8, among them a Nepali national. The embassy in Riyadh has asked employers to provide food and shelter for stranded workers, but it has no official count of how many are stranded.
The corridor carries considerable economic weight. According to the Department of Foreign Employment, about 7,000 work permits a month are issued for Saudi Arabia; between mid-September and mid-October the figure was 8,366. Republica reported on 15 October that Nepal received 436.36 billion rupees in remittances in the first 2 months of fiscal 2026-27, up 23.9%. Over the same period, permits for first-time migrants fell from 90,198 to 78,320, or about 13%. The sources do not give the share of remittances from Saudi Arabia; this could not be verified.
The binding constraint is access rather than price. Workers quoted in the report said a one-way ticket had risen to 100,000 rupees. One worker stuck in Jeddah after Riyadh closed paid 7,000 rupees for a 13-hour, roughly 1,000-kilometre bus journey. The Non-Resident Nepali Association in Saudi Arabia has suggested routing via Bahrain by road from Dammam.
Talay assessment
Bottom line
The Houthi attacks are hitting Saudi Arabia not only as an oil producer but as a South Asian labour market. With 45% of flights cancelled, the inbound and return flows that feed Nepal's remittance engine are blocked. Remittances, up 23.9% in the first 2 months, still provide a buffer for now, but first-time exit permits have fallen 13%. The likeliest path is a partial return of flights alongside a slower inflow of new workers.
Likely effects
- Nepal remittancesNegative1–6 months
The 13% drop in new worker departures will slow remittance growth with a lag of a few months; transfers from workers already abroad continue in the near term.
- Regional airlinesNegativeWeeks
IndiGo and Air India suspending Saudi routes until mid-November narrows Gulf labour traffic from both India and Nepal.
- Saudi labour supplyNegative1–6 months
Stranded workers and those unable to travel raise the cost of finding foreign labour for Saudi projects operating under wartime conditions.
Possibilities, ranked
- 1Partial return, slow flow55%
Riyadh and Dammam services partly resume in mid-November, but new work permits stay below the pre-war pace.
Watch: Whether IndiGo resumes Saudi flights after 14 November
- 2Evacuation on the agenda30%
Attacks continue, Nepal's government arranges special evacuation flights and exit permits fall further.
Watch: A Nepali Foreign Ministry announcement of special flights or travel restrictions for Saudi Arabia
- 3Rapid normalisation15%
Qatari mediation halts the Houthi attacks, flights return to pre-October levels and permits climb back to 7,000 a month.
Watch: The Department of Foreign Employment's November permit count for Saudi Arabia
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Saudi flight cancellation rate▼ 45%
- Riyadh cancellation rate▼ 86%
- First-time exit permits▼ −13%
Sources
- Dawn (ANN / The Kathmandu Post) — Dashain gone, Tihar uncertain: Nepali workers stranded in Saudi Arabia as Houthi attacks disrupt flights
- The Kathmandu Post — Nepalis in Saudi Arabia urged to follow security alerts amid drone attacks
- Republica — Nepal receives Rs 436 billion in remittances in two months, up 23.9 pct