Emirates, the Middle East’s largest airline, announced yesterday that it will significantly scale back flights to the United States, citing “weakened travel demand to U.S.” due to “actions taken by the U.S. government.” Analysts say that the hit to U.S. economy from lost Middle Eastern travelers could be $1 billion in 2017.
An airline spokesperson linked the lower demand to actions by President Donald Trump’s administration, citing regulations “relating to the issuance of entry visas, heightened security vetting, and restrictions on electronic devices in aircraft cabins.” All of these, the spokesperson said, “have had a direct impact on consumer interest and demand for air travel into the U.S.”
The Trump administration has issued two high profile rules since the inauguration. The first was to ban travelers from first 7 (now 6) Muslim nations from entering the U.S. This rule has been put on hold pending legal arguments. The second prohibits passengers from carrying electronics larger than a phone (such as laptops, e-readers and notebook computers) on board planes from 10 cities, including Dubai, Emirates’ hub. These devices may travel in checked luggage, but that’s not much help to, for example, business travelers needing to work on board the 14- to 16-hour fights from Emirates’ Dubai hub to its U.S. gateways.
Emirates is Middle East’s largest airline and the world’s fourth largest in passenger mileage flown, and one of the most active overseas carriers in the American market. It operates through 12 U.S. gateways: Boston, Chicago, Dallas, Ft. Lauderdale, Houston, Los Angeles, New York (JFK), Newark, Orlando, San Francisco, Seattle and Washington, DC. Between May 1 and July 1, it will gradually halve the number of flights into Boston, L.A. and Seattle (from twice daily to once) and cut back flights into Orlando and Fort Lauderdale from daily to five times per week.
“Until the start of 2017, Emirates’ operations in the U.S. have seen healthy growth and performance,” the airline spokesperson said. “However, over the past 3 months, we have seen a significant deterioration in the booking profiles on all our US routes.
“Emirates has therefore responded as any profit-oriented enterprise would,” canceling flights and repurposing planes to other routes.
How does this impact the U.S. economy? “We’re seeing a 30 percent decline in travel to the U.S. from the Middle East at the moment,” says Adam Sacks, president of industry analysts Tourism Economics. “Excluding Israel, the market was nearly 700,000 visitors to the U.S. last year.
“The average visitor from the region spends $5,000 per visit to the U.S. This means that the U.S. economy stands to lose about $1 billion from these travelers alone.”
Compounding this, Sacks says, “Emirates serves as an important transit airline for visitors from Asia as well. This loss of connectivity will affect these markets as well, increasing the related losses.
“Here we have another reason for the President to issue an overt, deliberate welcome message to the world that, while we’re closed to terror, we’re open for business,” says Jonathan Grella, executive vice president of public affairs for the U.S. Travel Association, the industry trade group. “The aftermath of 9/11 taught us that we can’t take either global understanding or U.S. market share for granted. Every limiting security message needs to be offset by a sincere welcome to legitimate, lawful travelers.”