U.S. airlines stand to benefit from flight cutbacks by Dubai-based Emirates, which blamed President Donald Trump’s travel restrictions for weakening demand from Middle Eastern passengers, reports Bloomberg.
Emirates will pare service to five U.S. cities after the U.S. 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 U.S. operators that see it as an unfair rival.
“Any reduction in capacity from them is only a good thing for U.S. airlines,” said Joe DeNardi, an analyst at Stifel Financial Corp. “To some extent it was an unintended byproduct of Trump’s plans.”
American Airlines Group Inc., Delta Air Lines Inc. and United Continental Holdings Inc.have prodded U.S. officials for two years to act on their complaints that $50 billion in government support has enabled three Persian Gulf carriers to compete unfairly. Etihad Airways PJSC said demand remained strong for flights to the U.S. and pledged to upgrade New York service by using Airbus SE A380 super jumbo jets.
A Bloomberg index of U.S. airlines advanced 1.8 percent at 12:25 p.m. in New York after climbing as much as 2 percent, the biggest gain in a week.
American declined to comment. United didn’t immediately respond to a request for comment. Delta referred questions to the 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 capacity will be re-deployed to serve other routes across the airline’s global network, according to the statement. The carrier’s Dubai hub was one of the 10 airports impacted by a ban on electronics in carry-on luggage on U.S.-bound flights. Trump’s order restricting visitors from six countries — Iran, Libya, Somalia, Sudan, Syria and Yemen — has been blocked in court.
“The recent actions taken by the U.S. 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 U.S.,” Emirates said in a statement Wednesday. “Over the past three months, we have seen a significant deterioration in the booking profiles on all our U.S. routes, across all travel segments.”
Emirates, which serves 12 U.S. 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 U.S. operations as soon as viable, it said.
Qatar Airways Ltd., the third major Persian Gulf carrier, didn’t immediately comment on its own capacity in the U.S.