US gadget ban on some Gulf flights boosts Air India ticket sales

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London Heathrow, United Kingdom - May 25, 2013: An Air India Boeing 787 Dreamliner with the registration VT-ANK on approach to London Heathrow Airport (LHR) in the United Kingdom. The Boeing 787 Dreamliner is the world's first major airliner to use composite materials in the construction of its airframe. Air India is the flag carrier airline of India with 99 planes in operation.

MUMBAI: Of all the marketing tools an airline could possibly have in its arsenal, ‘bereft laps’ wouldn’t ever have been considered to be a potential revenue spinner. But it’s the catchphrase in Air India these days as ticket sales for its flights to the US jumped 60% after that country banned laptops in cabin bags on certain direct flights from the Gulf.

All passengers on board Air India flights from India to destinations in the US, irrespective of their nationality, can carry laptops in their cabin bags and use them on the flight. However, those who board direct flights to the US from Dubai, Abu Dhabi, Doha, Kuwait, Jeddah, Amman, Cairo, Istanbul or Casablanca—that is, fly on carriers based in these airports—will have to mandatorily check in all electronic devices larger than a smartphone like laptops, tablets, etc. Moreover, after they disembark in the US, these flyers join longer security queues as their hand bags are checked. This has worked to AI’s advantage.

The US ban affects Middle Eastern carriers because of the International Civil Aviation Organisation-defined freedoms under which airlines operate flights.

Flights operated by carriers like Emirates, Etihad (Jet Airways flights that transit from Abu Dhabi), Qatar Airways, Saudia, etc have to do a transit halt in the Middle East before they fly to the US, so passengers on board these flights come under the purview of the laptop ban.

The US ban affects Middle Eastern carriers because of the International Civil Aviation Organisation-defined freedoms under which airlines operate flights. The agreement between India and Middle Eastern carriers is such that carriers from both these countries can fly directly to the US or any other foreign destination only from their homeland. So Emirates cannot operate a Delhi-Chicago flight, it can only operate a Delhi-Dubai-Chicago flight. Similarly, Air India cannot operate a Dubai-Chicago flight. But it can operate a Dubai-Delhi/Mumbai-Chicago flight. That is to say, if a Middle Eastern carrier has to fly directly to the US, it can do so only from its own airport like Dubai, Doha, Abu Dhabi, all of which are in the US laptop ban list. Since Indian airports are not on the ban list, Air India passengers can carry laptops in their cabin bags.

What’s a definite first is that passenger traffic from the Middle East, bound for the US, has begun moving eastwards towards India. “A small percentage of passengers from Dubai, Kuwait, Muscat have booked tickets into India to transit from Delhi, Mumbai and then fly to the US from here. Last week, the passenger load on flights from the Gulf to India was about 83% which is a tad high for this time of the year. Because of the laptop ban, we expect the number to go up in the coming weeks,” said an Air India official, adding ticket sales to the US have shot up 60% since the ban came into effect on March 25.

Though in 2016, one in two passengers who flew from India to the US transited through the Middle East (Centre for Asia Pacific Aviation data), the demand is on the decline. On Tuesday, return airfares (for travel in the last week of April and return in May) on the Mumbai-Chicago route with one transit halt began at Rs 72,000 (Qatar Airways, transit stop, Doha). All the cheaper fares were offered by carriers that transit through the Middle East (on board which laptops are banned in cabin bags). Then came fares on European carriers like Lufthansa (Rs 78,000), Swiss (Rs 79,000) etc. Fares on Air India started at Rs 86,000. “Passenger load factor on flights to the US are at an all-time high,” said an Air India official.

Currently, Air India offers about 8,500 seats per week on its direct flights between India and the US. About 20% of Air India’s revenue comes from operations to the US and the airline expects it to increase in the coming weeks, thanks to the laptop ban and the addition of a new route between Delhi and Washington (from July 7).

HIGHLIGHTS
* The ban on gadgets in hand baggage on direct flights to the US from Dubai, Abu Dhabi, Doha, means added security checks and longer queues on landing.
* In the past week, AI has witnessed a 60% increase in ticket sales on all its flights between India and the US.
* In 2016, 2.7 million passengers flew between India and the US.
* Of this, 1.3 million flew on Middle Eastern carriers and transited through airports like Dubai, Abu Dhabi and Doha.
* About 0.7 million flew European carriers like British Airways, Air France, Lufthansa and flew to the US after a stopover in London, Paris or Frankfurt.
* Only a small percentage flew directly between India and the US on Indian or American carriers.