March 22, 2017 / 4:23 PM / 4 months ago

Laptop ban hits Gulf airlines in battle for business travelers

4 Min Read

Travellers are seen at the Emirates terminal at Dubai International Airport, January 7, 2013.Jumana El Heloueh

LONDON (Reuters) - A ban on laptops in plane cabins bound for the United States from some cities could deal a blow to the big, fast-growing Gulf airlines, which depend on business-class flyers stopping over in places like Dubai or Doha for far-flung destinations.

The United States announced the new measures on Tuesday and Britain followed suit, prompted by reports that militant groups want to smuggle explosive devices in electronic gadgets.

The U.S. restrictions apply to flights originating from 10 airports in countries including the United Arab Emirates, Qatar and Turkey, meaning they will impact major international carriers including Emirates [EMIRA.UL], Qatar Airways and Turkish Airlines (THYAO.IS), but not U.S.-based carriers, none of which fly to those airports.

The British restrictions do not include the UAE or Qatar but will affect Turkish Airlines and UK-based carriers including British Airways (ICAG.L), easyJet (EZJ.L) and Monarch. EasyJet said the UK restrictions apply from Wednesday.

The restrictions are especially unfortunate for the Gulf carriers, since a large proportion of their revenue comes from passengers who change planes at their hubs and have other options that avoid affected airports.

Emirates, Etihad and Qatar Airways have been battling lobbying from major U.S. carriers which have accused them of receiving unfair subsidies, charges the Gulf carriers deny.

Tim Clark, president of Emirates, the world's largest long-haul carrier, questioned why his airline's hub was on the list.

"To suggest that Dubai doesn't have the equal capabilities or better than the Europeans, the Americans and the Asians in terms of search, interdiction and surveillance, I find amazing," he told broadcaster CNN.

In an e-mail to Reuters, he played down the impact on the company's business: "Yes, this new security measure is disruptive and operationally challenging in several regards but I am optimistic we'll get through this."

He said the airline was looking at whether passengers could hand in their devices just before boarding, so that they could use them until the last possible moment and minimize disruption.

Business Travelers

Business travelers paying top prices for flat beds and other perks may balk at stowing their laptops on long trips.

According to the Washington DC-based Global Business Travel Association, around 49 percent of business travelers prefer to stay connected and get work done while flying. GBTA added that many companies advise staff traveling on business to keep their devices close because they may contain sensitive information.

"The corporate segment is the one that brings more revenue. It's sending the message that we can't travel on these airlines because we can't do the work, so we might choose another airline," said travel project manager Nadejda Popova at Euromonitor.

Liberum analyst Gerald Khoo said the restrictions could potentially benefit European carriers such as British Airways and Iberia parent IAG, Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE), which offer alternative routes between the United States and Asia, Africa or the Middle East.

"However, it is not clear the route networks are there to maximize the benefits of traffic switching, and the ban is another aviation security scare which could have a wider dampening effect on air travel demand," he said.

A day after the new restrictions, some rival airlines were already trying to poach business by boasting that they are not affected by the new rules.

Pakistan International Airlines (PIAa.KA) tweeted: "Did you know? You can carry your laptop/tablets onboard US bound #PIA flights. Don't let your work get interrupted onboard."

Reporting by Victoria Bryan; additional reporting by Alexander Cornwell and Stanley Carvalho; editing by Peter Graff

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