US air­lines get break as Emi­rates cuts flights af­ter Trump travel re­stric­tions

Business World - - WORLD BUSINESS -

US AIR­LINES stand to ben­e­fit from flight cut­backs by Dubaibased Emi­rates, which blamed Pres­i­dent Don­ald Trump’s travel re­stric­tions for hurt­ing de­mand from Mid­dle Eastern pas­sen­gers.

Emi­rates will pare ser­vice to five US cities af­ter the coun­try banned on-board elec­tron­ics on flights from some Mid­dle Eastern air­ports and at­tempted to block travel from six pre­dom­i­nantly Mus­lim na­tions. That trims com­pe­ti­tion from the big­gest Per­sian Gulf car­rier — a per­sis­tent ir­ri­tant to long- haul US op­er­a­tors that see it as an un­fair ri­val.

With fewer flights, some Emi­rates pas­sen­gers may switch to big Euro­pean air­lines and their US part­ners for travel from the Mid­dle East and Asia. Amer­i­can Air­lines Group, Inc., Delta Air Lines, Inc. and United Con­ti­nen­tal Hold­ings, Inc. have prod­ded US of­fi­cials for two years to act on their com­plaints that $50 bil­lion in gov­ern­ment sup­port has en­abled Emi­rates, Eti­had Air­ways PJSC and Qatar Air­ways Ltd. to com­pete un­fairly.

“Any re­duc­tion in ca­pac­ity from them is only a good thing for US air­lines,” said Joe DeNardi, an an­a­lyst at Stifel Fi­nan­cial Corp.

Eti­had said de­mand re­mained strong for flights to the US and pledged to up­grade New York ser­vice by us­ing Air­bus SE A380 su­per jumbo jets. Qatar Air­ways, which also serves air­ports af­fected by the lap­top ban, didn’t im­me­di­ately com­ment on its own ca­pac­ity in the US.

EUROPE BOOK­INGS

“I un­der­stand the prob­lem and I agree as a busi­ness trav­eler, that’s my most pro­duc­tive travel and now I’m look­ing to book through Europe,” said Michael Weiss, an At­lanta busi­ness­man who fre­quently trav­els to the Mid­dle East and has pre­ferred the cus­tomer ser­vice on Qatar Air­ways. “Fel­low peers are do­ing the same thing be­cause we need to be able to work.”

A Bloomberg in­dex of US air­lines ad­vanced 1.4% at the close in New York, the big­gest gain in three weeks.

Amer­i­can de­clined to com­ment. United and Delta re­ferred ques­tions to the Part­ner­ship for Open & Fair Skies, which rep­re­sents the car­ri­ers and sev­eral air­line unions. In a state­ment Wed­nes­day, that group said the Per­sian Gulf car­ri­ers were “propped up by bil­lions of dol­lars in gov­ern­ment cash” and as a re­sult have never con­sid­ered mar­ket de­mand in de­cid­ing where to fly.

Emi­rates’ ser­vice to Seattle, Bos­ton and Los Angeles will drop to one a day from two, while Fort Laud­erdale and Or­lando will get five flights a week, com­pared with daily ser­vices now. The changes will be phased in start­ing on May 1, the air­line said in a state­ment Wed­nes­day.

“The re­cent ac­tions taken by the US gov­ern­ment re­lat­ing to the is­suance of en­try visas, height­ened se­cu­rity vet­ting and re­stric­tions on elec­tronic de­vices in air­craft cab­ins, have had a di­rect im­pact on con­sumer in­ter­est and de­mand for air travel into the US,” Emi­rates said. “Over the past three months, we have seen a sig­nif­i­cant de­te­ri­o­ra­tion in the book­ing pro­files on all our US routes, across all travel seg­ments.”

Emi­rates will re­de­ploy some US ca­pac­ity to serve routes across its global net­work. The car­rier’s Dubai hub was one of the 10 air­ports af­fected by a ban on elec­tron­ics in carry- on lug­gage on US- bound flights. Trump’s or­der re­strict­ing vis­i­tors from six coun­tries — Iran, Libya, So­ma­lia, Su­dan, Syria and Ye­men — has been blocked in court.

Emi­rates, which serves 12 US cities as part of its net­work of more than 150 des­ti­na­tions world­wide, will “closely mon­i­tor” the sit­u­a­tion with the “view to re­in­state and grow” its US op­er­a­tions as soon as vi­able, it said.

Emi­rates, Eti­had and Qatar Air­ways have grabbed a sub­stan­tial por­tion of the lu­cra­tive mar­ket for travel from the Amer­i­cas and Europe to the Mid­dle East, Asia, Africa and Aus­tralia by de­vel­op­ing their home bases into huge trans­fer hubs. If trav­el­ers look to Euro­pean car­ri­ers to get to the Mid­dle East or In­dia, US car­ri­ers could ben­e­fit through rev­enue­shar­ing agree­ments with part­ner air­lines. — Bloomberg

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