Airline Profits Plunge As Laptop Ban Expands – Forbes
Quarterly profits are continuing to roll in across the airline industry and the news isn’t good. Dubai-based Emirates Airlines, one of the major carriers that operates direct flights between the United States and the Middle East, just reported a profit dip of 82% year-over-year according to NBC News, on top of an already slow year. The airline attributes the slip primarily to a laptop ban put into place this past March for flights departing from the Middle East to the U.S., directly affecting the business of several carriers in the region (no U.S. carrier flies directly from the Middle East to the United States).
To combat the drop in demand, many Middle Eastern carriers have concocted workarounds to give passengers loaner tablets or laptops, however most of those campaigns are limited to premium cabins and don’t account for applications or data that some passengers may need.
Signs of the slowdown started late last month with news that Emirates would cut capacity to the United States. With the laptop ban still in place, profits are continuing to get pummeled as passengers either travel on alternate routes or cancel plans altogether.
It is perhaps because of this looming profit specter that the ban has so far not expanded into the United States. Earlier this week, news leaked that the Trump administration was considering an extension of the ban to flights between the United States and Europe. Multiple media outlets reported that the extension is imminent, but so far the administration hasn’t acted. David Laplan, a spokesman for the Department of Homeland Security, tweeted that no decisions had been made as of midday on Friday.
Check w/ @Delta on the sign but DHS has NOT made a decision on expanding the restrictions on large electronic devices from selected airports
â David Lapan (@SpoxDHS) May 12, 2017
One factor that may be affecting whether the ban materializes is U.S. carriers and their influence on the government. American, Delta, United and their lobbying partners are well known for lobbying the government on issues such as competition and ancillary fees. With a sitting president hell-bent on helping U.S businesses, airlines may be successfully stalling the ban directly through the executive branch.
Still, if a credible threat is working through the system the Department of Homeland security may have no choice but to act. And if American, Delta and United are exposed to the same restrictions as their Middle Eastern competitors, they’ll likely suffer the same financial fate.