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This is how Dubai will feel the heat of Trump electronics ban controversy

March 23, 2017 4:45 pm

Dubai International Airport’s duty free operator estimates that it will lose about $2 million in sales this year from the new Trump ban.

Businesses in Dubai have started to take stock of the new electronics ban on United States-bound flights from eight Muslim-majority nations.

Dubai International Airport’s duty free operator estimates that it will lose about $2 million in sales this year from the ban.

Under new security measures announced this week, electronics larger than a mobile phone will be banned from passenger cabins on direct flights to the US from airports in Cairo, Istanbul, Kuwait City, Doha, Casablanca, Amman, Riyadh, Jeddah, Dubai and Abu Dhabi, starting Saturday.

“We estimate that the ban will cost us around $2 million in revenue for the year,” said Dubai Duty Free’s Chief Operating Officer Ramesh Cidambi.

The estimate is based on sales of electronics to U.S.-bound passengers, excluding mobile phones and accessories, for 2016 and if the ban runs until the end of the year. U.S. officials have said the ban is indefinite.

Dubai Duty Free made $1.85 billion in total sales last year, Cidambi said.

The chief executive of Dubai Airports, Paul Griffiths, had earlier told DubaiEye radio that the ban on electronics covers goods sold in the airport, including duty free stores.

 

Bookings to decline?

This is feared to be yet another blow for the region’s airlines that are already facing profitability challenges.

The affected airports are served by nine airlines that fly directly from those cities to the US roughly 50 times a day.

The carriers – Royal Jordanian Airlines, Egypt Air, Turkish Airlines, Saudi Arabian Airlines, Kuwait Airways, Royal Air Maroc, Qatar Airways, Emirates and Etihad Airways – have until Friday to adopt the new policy, which took effect on Tuesday.

Following the first travel ban in January, reports have suggested that bookings to the US have drastically declined.

Demand for travel to the US in the coming months has flattened, with flights to and from the Middle East the hardest hit, a study released by travel analysis company ForwardKeys showed in February.

Emirates, the world’s largest long-haul carrier, said earlier this month that booking rates on US flights fell 35 per cent after the executive travel ban that restricted people from seven mainly-Muslim countries.

The airline will allow passengers to hand over electronic devices at boarding to minimise disruption, President Tim Clark said on Wednesday.

Clark, who called the ban disruptive, said the airline was “closely monitoring the business impact of this new security measure, and we will decide on our strategies and interventions accordingly.”

 

“Minimal impact”

Meanwhile, the chief of Dubai International, where flights depart to 12 U.S. cities daily, has said the ban will not significantly affect passenger numbers.

“If we are very, very diligent in both communicating exactly what the restrictions are and actually have an efficient process to deal with the situation, I don’t suggest it will have an impact on numbers,” Dubai Airports Chief Executive Paul Griffiths told DubaiEye radio, adding that a “very tiny proportion” may choose to switch airlines.

Dubai International, the world’s busiest international airport, is targeting 89 million passengers this year.

 

Bearish outlook

Interestingly, no US airlines are affected as there are no direct flights between the US and the cited airports.

Meanwhile, earlier in December, international agency IATA said that Middle East airlines are likely to see profits fall to $300 million in 2017 from $900m last year in part due to high capacity and limited demand growth.

Industry experts say the ban starting this Saturday could see business travellers who use laptops to work during flights switch to unaffected carriers.

 

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Unfair

Civil liberties groups have already raised concerns over the new ban and many others who will potentially be affected said the ban was unfair.

“Security for some people and other people none? It’s not for everybody, right?” said Mohsen Ali, an Egyptian who spoke to Reuters TV at New York’s John F Kennedy International Airport, where he was waiting to meet a friend.

Meanwhile, airlines have begun to take measures to counter fallouts from the ban. Emirates posted a video on its social media channels, posing a question: “Who needs tablets and laptops anyway?”

 

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No boarding passes for electronics

Unlike the two previous executive travel ban orders by President Donald Trump’s administration, the new curbs do not directly impose restrictions on people. Instead, they focus on electronic devices.

The US Department of Homeland Security has said passengers from the eight countries cannot bring into the main cabin devices larger than a mobile phone. This includes tablets, portable DVD players, laptops and cameras. Instead, such items must be in checked baggage.

Shockingly, the UK has also taken similar measures that would be implemented by March 25 that bars electronic items in the cabin on flights from six countries in the Middle East.

The moves were prompted by reports that militant groups want to smuggle explosive devices inside electronic gadgets.

(With inputs from Reuters)

 

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.