Trump’s domino effect in Gulf

The U.S. and British ruling that banned passengers from several Gulf and North African countries from carrying portable electronic devices, except for smart phones, on flights to the U.S. and the U.K. is feeding unease at airlines that fly to North America and the U.K. from the effected countries.

by DOMINIC LALK  

April 1st 2017

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The British and U.S. governments astonished the world in late March when they declared passengers departing or transiting through Abu Dhabi, Doha, Dubai, Kuwait City, Casablanca, Cairo, Amman, Istanbul, Riyadh and Jeddah would be forbidden from carrying electronic devices larger than smartphones on flights to the U.S. and the UK until October 14. Read More »

The decision, attributed to fears terrorists could plant explosives in larger devices, left airlines scrambling to implement the ruling and travellers wondering what to do with their laptops, tablets and cameras.

One unanswered question is why the U.S. ban covers several countries that the U.K. ban does not. Four countries included in the U.S. list – the United Arab Emirates, Qatar, Kuwait and Morocco – are absent from the U.K. restrictions.

The difference is “a mystery”, Emirates president, Sir Tim Clark, said. “It seems the British government regards our secondary screening methodologies as best in class, particularly as they have audited our procedures and security training on an on-going basis,” he told CNN.

“To suggest that Dubai does not have equal capabilities or better than the Europeans, the Americans and the Asians in terms of search, interdiction and surveillance, I find amazing. The Department of Homeland Security (DHS) and TSA also regard our procedures as excellent. We have coordinated and worked with them since we began flying to the U.S. in 2004.”

“Our decision to implement additional security procedures at selected airports was based on our assessment of the threat environment and our mission to protect air travellers from the threat of terrorism,” said acting deputy assistant secretary for the DHS, David Lapan.

The three gulf majors have found themselves in an increasingly tight spot since President Trump announced his first travel ban in January. “The first U.S. travel order saw the booking velocity fall by 35% overnight. The effect was instantaneous,” Clark told Orient Aviation in Berlin last month.

“I am concerned. It’s the tone of it. We have brought millions of Muslims to the United States, but now they may not feel welcome. They may look at going on holiday elsewhere. When we will recapture the original booking curve is anyone’s guess.”

Emirates is expected to present a sobering balance sheet to investors this year after it made a record profit of $1.9 billion 12 months earlier. Its revenue is said to have tumbled by more than 75% or worse, as nobody can predict the impact the U.S. electronics ban will have on the gulf carriers’ premium passengers.

“We used to have one of these business-damaging events once a year, but now we have them more than once a month,” Clark said after Trump announced the electronics ban.

Emirates can take comfort from the fact that its super-connector rivals in the Gulf also are hurting. Turkish Airlines has suspended flights on 22 routes, mothballed 30 planes and deferred deliveries. Industry analysts have predicted the carrier will report its first annual loss for a decade. Qatar and Etihad also may end up in the red.

In a March 25 statement, Etihad Airways sought to reassure passengers after the electronics ban was announced. “All Etihad Airways U.S. flights have mobile and WiFi connectivity, together with power and USB points at every seat, enabling guests to remain connected throughout their journey with mobiles and smart phones,” it said. A comprehensive IFE suite of movies, live TV and Sports and well as games and music in every seat means “guests are able to keep themselves busy throughout their journey without the need of a laptop or tablet”, the airline said.

Travel data consultancy, ForwardKeys data, said demand for travel to the U.S. had flattened, with flights to and from the Middle East the hardest hit. International net bookings immediately dropped 4% after Trump’s initial travel ban, while forward bookings from the Middle East to the U.S. declined by 10% year-on-year.

Also, bookings from the U.S. to the Middle East and South Asia have plummeted by 25% since the travel ban was first announced and have stayed that way even though the U.S. courts have declared both the first and the revised travel bans to be illegal.

Emirates’ Clark said: “There might be a contagion effect. Other European countries may take a view, as may the Asian countries,” he said.

Trump also is calling for radical change in the funding of U.S. aviation security. Under the administration’s plan, the overwhelming majority of the funding burden for security at U.S. airports would be shifted from the federal government to airline passengers and state and local governments, which would make flying more expensive and most likely, riskier.