Devices ban to help US airlines beat Gulf carriers

Hyderabad: A US and UK ban on carrying electronic gadgets in aircraft cabins of flights originating from 10 airports appears to have influenced by business considerations than terrorism concerns. The lure of Indian aviation market also, it appears, played a key role in this decision.

The US ban applies to nonstop US-bound flights from 10 international airports in Amman in Jordan, Kuwait City in Kuwait, Cairo in Egypt, Istanbul in Turkey, Jeddah and Riyadh in Saudi Arabia; Casablanca in Morocco; Doha in Qatar; and Dubai and Abu Dhabi in the United Arab Emirates.

The British rules apply to flights from Turkey, Lebanon, Jordan, Egypt, Tunisia and Saudi Arabia. According to experts, about 50 flights a day, all on foreign airlines, would be affected by the US ban.

While the US ban applies to 10 airports, the impact would be severe on three or four airlines — Emirates, Eithad, Qatar Airlines and Turkish Airlines. Though the US Transportation Security Administration, which issued the order, claims that the ban was imposed due to security concerns, aviation experts doubt the claim.

“Carrying of lithium batteries either in the aircraft cabin baggage or in the plane’s cargo would be pose the same security threat. In fact, UPS 747 freighter crashed in Dubai after lithium batteries cargo caught fire in 2010.”

“All this boils down to protecting business interests,” said an analyst, who works with one of three big consultancy firms. At the heart of this issue is the growing marketshare of three Gulf airlines in the US-bound traffic.

Emirates, Eithad Airways and Qatar Airways managed this feat by offering cheaper airtickets, but the big three of US aviation — American Airlines Inc, United Airlines and Delta Air Lines — accuse them of using government subsidies to capture the market.

“Dubai, Abu Dhabi and Qatar have provided $42 billion worth subsidies to their airlines — Emirates, Etihad Airways PJSC and Qatar Airways,” the US airlines claimed in their representation to the Obama administration, adding that these Gulf-based airlines must be reined in. US President Barack Obama, however, did nothing on this issue.

The fight for the Indian market also played a key role in this ban. Being the fastest growing major economy in the world, the sixth largest in the world, and having one of big expat population in the US, India is a key market for the United States.

Of the entire in-bound foreign airline traffic, the Indian traffic makes up nearly one-fourth of it. Most Indians flying to the US east coast prefer the Gulf route as they could change over to the cheaper but yet most modern aircraft operated by the Big 3 Gulf airlines.

In fact, one of reasons that made Eithad Airways acquire Jet Airways was its plan to capture a bigger pie of the lucrative Indian US-bound traffic. According to the American airlines, the market share of Gulf carriers in the US-Indian traffic has more than tripled whereas US carriers lost their share drastically.

Put together the Gulf airlines operate more international flights out of India than national carrier Air India Ltd. They further plan to increase their capacity to serve the India-US route.

The ban, however, appears to changed the dynamics of the aviation market. With electronic devices have become inalienable part of air traveller, they could be hesitant to carry their devices, which may carry important data, as checked luggage due to the fears of damage or theft.

The ban will hit business class travellers the most as they wouldn’t like to make use of their travel time also productively. According to Amber Dubey, partner and head of aerospace, KPMG, “Some long haul corporate travellers from India may to Indian, US and European carriers. There may be a rise in fares, especially of business class.”

However, he feels the Gulf airlines may fight back. “They may try to woo passengers back with discounts and goodies. They may also try to provide airline-owned and US-approved laptops to passengers for the duration of the flight,” he said.