Gulf airlines stand to take a financial hit from the US and UK ban on electronics in aircraft cabins as they roll out measures to deal with the controversial policy, experts have warned.
The costs could stretch into the millions of dollars if airlines are forced to lay on new staff, add additional screening systems for checked-in devices and offer in-flight laptops, as Emirates proposed this week.
The Dubai-based airline had already announced plans to provide a free packing-and-handling service for passengers on flights hit by the ban on electronic devices larger than a standard smartphone.
Emirates president Tim Clark has since said the airline is considering loaning government-approved laptops to passengers during flights – “to help people do what they need to do in the absence of devices that are in the hold,” he told Bloomberg TV.
Meanwhile Etihad Airways said on Wednesday it would offer free wi-fi and iPads to first and business class passengers on all of its US-bound flights from Abu Dhabi from April 2.
No details were revealed as to the cost of such services, and the three main Gulf carriers – Emirates, Etihad and Qatar Airways – have declined to comment on the financial impact on their operations.
But aviation industry experts told Arabian Business there are certain to be costs involved in coping with the ban.
Dubai-based analyst Mark Martin, founder and CEO of Martin Consulting, claimed Gulf airlines would require at least 10 extra “resources” (ground handling staff) per affected flight, one more screening machine at an average cost of $20,000 and one or two ‘sweetener’ measures to enhance in-flight entertainment, such as laptops for hire.
Additional ground handling staff are unlikely to be transferred from other divisions because Gulf airlines, like other non-unionised airlines around the world, already face higher than average workforce attrition rates – of around 30 percent per year compared to 15-18 percent for unionised airlines, Martin said.
“Making a few new hires would be the right course of action. You could stretch the existing shifts but that would be risky in terms of workplace fatigue. Most airlines view recruitment as an investment, particularly given the higher attrition rates at non-unionised airlines.”
Airport delays and disruptions as a result of increased paperwork and lengthier check-in times could further increase costs, while the US policy could bring about the domino effect of other airlines attempting to monetise it, according to Saj Ahmad, chief analyst at StrategicAero Research.
He said: “Airlines will go to any length to extract money from passengers if they can get away with it. In terms of exact cost, it’s hard to pin down, but given the relatively small number of GCC airlines that service the US direct, the cost could feasibly be in the low (single digit) millions per annum.
“The real pacing item of such costs will be how long the US wants to keep this rule in place – or whether it chooses to expand it.
“Beyond that, it is likely that US airfares may get more expensive, to offset the logistical inconvenience of this rather odd ‘security’ policy.”
Dubai Airports said last week there had been “no discernable impact on our operations since the implementation of the ban”. However, Emirates’ Tim Clark said the rate of bookings growth to the US had dropped in the days after the initial announcement by US President Donald trump, and that the policy could affect Emirates’ 18 flights a day to the US.
Aviation industry body the International Air Transport Association (IATA) told Arabian Business the ban would impact more than 700 flights per week between the UK and US and countries in the Middle East, Turkey and North Africa. IATA CEO Alexandre de Juniac added that the ban would have "significant impact" on airline revenues.
US officials last week banned electronic devices bigger than mobile phones on direct flights to the US from 10 airports in eight majority-Muslim countries including the UAE, Qatar and Egypt. Britain followed with a similar ban from six countries from the Middle East, North Africa and Turkey.
The move was in response to a “substantiated” terror threat to the West several weeks ago, according to US authorities.For all the latest GCC news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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