Emirates cuts US flights, blaming Trump administration curbs

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An Emirates plane taxis to a gate at Dubai International Airport at Dubai International Airport in Dubai on March 22, 2017. (AP Photo/Adam Schreck, File)
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In this Feb. 10, 2013, file photo, the first class section of an Emirates Airlines Airbus A380 is ready for boarding at the new Concourse A of Dubai airport in Dubai. (AP Photo/Kamran Jebreili, File)
Updated 19 April 2017
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Emirates cuts US flights, blaming Trump administration curbs

DUBAI: Emirates, the Middle East’s largest airline, slashed its flights to the United States by 20 percent Wednesday, blaming a drop in demand on tougher US security measures and Trump administration attempts to ban travelers from some Muslim-majority nations.
The Dubai government-owned carrier’s decision is the strongest sign yet that new measures imposed on US-bound travelers from the Mideast could be taking a financial toll on fast-growing Gulf carriers that have expanded rapidly in the US.
Dubai was one of 10 cities in Muslim-majority countries affected by a ban on laptops and other personal electronics in carry-on luggage aboard US-bound flights.
Emirates’ hub at Dubai International Airport, the world’s third-busiest, is also a major transit point for travelers who were affected by President Donald Trump’s executive orders temporarily halting entry to citizens of six countries.
The latest travel ban suspended new visas for people from Iran, Libya, Somalia, Sudan, Syria and Yemen, and froze the nation’s refugee program. Like an earlier ban that also included Iraqi citizens, it has been blocked from taking effect by the courts.
Emirates said the flight reductions will affect five of its 12 US destinations, with the first cutbacks starting next month.
“The recent actions taken by the US 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 US,” the carrier said in a statement.
Emirates does not provide financial data for its US operations or individual routes, but said it had seen “healthy growth and performance” there until the start of the year.
Since Trump has been in office, however, there has been what it called “a significant deterioration in the booking profiles on all our US routes, across all travel segments.”
It said it is responding as “any profit-oriented enterprise would” and will use the capacity freed up by the culled routes elsewhere on its network.
The Americas region, which also includes routes to Canada and Latin America, accounted for 14 percent of the $22.75 billion in revenue Emirates pulled in during the fiscal year through the end of March 2016.
Emirates’ half-year profit fell 75 percent to $214 million in the last period the company has disclosed, through last September — before the US election. Executives cited increased investments including aircraft purchases and the repayment of bonds, and said a “bleak” economic outlook in many parts of the world was reducing travel demand.
Robert Mann, an aviation consultant in Port Washington, New York, said business travel between the US and the Middle East has clearly been hurt by the ban on gadgets, while the attempted visa bans have put a damper on leisure travel from the countries targeted.
“Neither factor is a good thing for the Middle Eastern carriers who are primarily affected,” he said.
The cuts will reduce the number of US-bound flights from Dubai to 101, down from 126 currently.
Twice daily Emirates flights to Boston, Los Angeles and Seattle will fall to once a day. Daily flights to Fort Lauderdale and Orlando will be pared to five per week.
Andrew Lannon, a Canadian attorney based in Dubai, arrived in Fort Lauderdale for vacation on an Emirates flight Wednesday and said passengers had to check their electronics, which made the 18-hour flight difficult because he couldn’t work.
Passengers were then told upon landing they would have to wait on the plane for an hour while their bags were checked, but were then let off after 20 minutes, Lannon said, adding that it took another hour for most passengers to clear customs.
Kevin Mitchell, head of the Business Travel Coalition in the US, said all the Gulf carriers are probably losing business because of the security measures and attempted travel bans, and that will hurt consumers.
“For consumers it means higher prices, fewer choices, less connectivity,” Mitchell said.
Like its smaller Gulf rivals Qatar Airways and Abu Dhabi-based Etihad Airways, Emirates has ramped up its US presence and recently launched a new service to Newark via Athens.
Several big US carriers and their pilot unions have bristled at the Gulf airlines’ US push, accusing them of flooding the market with capacity while receiving billions of dollars of unfair government subsidies.
Emirates and its Gulf rivals deny the allegations.
Despite a vigorous lobbying and public relations campaign, the US carriers were unable to persuade the Obama administration to block further expansion by Gulf airlines. But US airline executives made a personal pitch to restrict their access during a White House meeting with Trump earlier this year.
Jill Zuckman, a spokeswoman for the “Partnership for Open & Fair Skies” campaign opposing more US routes for the Gulf carriers, was quick to seize on Emirates’ decision.
“The fact is, market demand has never played a role when the Gulf carriers decide where to fly. It is well known that the Gulf carriers, including Emirates, lose money on most of their flights to the United States and are propped up by billions of dollars in government cash,” she said.
The US travel industry, already fretting that the ban on travelers from a number of Muslim-majority nations is affecting foreign travel generally to the United States, expressed fresh concern after Emirates’ announcement, however.
“The aftermath of 9/11 taught us that we can’t take either global understanding or US market share for granted,” said Jonathan Grella, executive vice president the US Travel Association. “Every limiting security message needs to be offset by a sincere welcome to legitimate, lawful travelers.”
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Associated Press writer Joan Lowy in Washington, David Koenig in Dallas and Terry Spencer in Fort Lauderdale contributed reporting.


Iraq’s move to rush oil bidding could deter some major companies

Updated 2 min 4 sec ago
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Iraq’s move to rush oil bidding could deter some major companies

  • Last month, Oil Minister Jabar Ali Al-Luaibi unexpectedly moved the date to receive bids from late June to April
  • Fourteen companies are qualified to bid for exploration and development rights for 11 underdeveloped blocks
BAGHDAD: Iraq is opening more of its untapped oil and gas resources to foreign developers, hoping to boost revenues after its costly war with the Daesh group, but analysts say the rushed bidding process — now timed to precede national elections — could draw a lukewarm response.
Last month, Oil Minister Jabar Ali Al-Luaibi unexpectedly moved the date to receive bids from late June to April, meaning the bidding would be held before May 12 national elections. Some believe Al-Luaibi, who is campaigning for a seat in parliament, moved up the date for political reasons.
Al-Luaibi hopes to represent the oil-rich southern province of Basra as a member of the Victory Alliance, which is led by Prime Minister Haider Al-Abadi, who is running for re-election.
“Personal and partisan interests are taking priority over national interests,” said Ruba Husari, managing director of the consulting firm Iraq Insight. “The objective of the exercise is aimed doubtlessly at portraying the ministry — and the minister — as aggressive in developing the nation’s resources ahead of the (elections).”
The Associated Press placed multiple calls to Al-Luaibi’s spokesman, who did not pick up. An aide to the spokesman said Al-Luaibi’s office was too busy with the election campaign to comment on the allegations.
In one of his campaign videos, Al-Luaibi tries to reassure a group of weary Iraqis who are worried about their future.
“Past years have wreaked havoc on everything,” a man in traditional Arab clothing says in the video, referring to the devastation caused by war. “Iraq’s wealth is your responsibility,” says a woman dressed in a conservative abaya — a loose black cloak that covers the body from shoulders to feet.
“I’m confident that with your determination I can protect the wealth of the generations,” Al-Luaibi says at the end of the video.
Thursday’s auction will be the fifth since Iraq opened its vast oil and gas reserves to international energy companies in 2009 for the first time in decades.
In previous bidding rounds, officials spent months hosting conferences, road shows and discussions with companies before issuing final contracts. Last month, the minister changed the date to April 15, but when companies asked for more time it was extended to Wednesday, and then to Thursday.
Ian Thom, principal analyst at energy consultancy Wood Mackenzie, said the tighter deadline could work against Iraq.
“Companies may be more cautious if they have not fully evaluated the bid terms,” he said. “This may result in bids being less competitive as companies seek a greater margin of safety.”
Fourteen companies are qualified to bid for exploration and development rights for 11 underdeveloped blocks.
Seven are located near the border with Iran, and three others are located near the Kuwaiti border, while the 11th is in the Arabian Gulf, in Iraqi territorial waters.
Encouraged by an improved security situation, Iraq in 2009 began to attract international oil companies to develop its vast untapped oil and gas reserves. Top among major oil companies are the US’s Exxon Mobil, Royal Dutch Shell, the UK’s BP, China’s CNPC and Russia’s Lukoil.
Since then, Iraq has awarded a handful of oil deals to develop major fields that hold more than half of its 153.1 billion barrels of proven oil reserves. Deals to tap natural gas resources were also awarded. As a result, Iraq’s daily production and exports have jumped to levels not seen since the late 1970s and early 1980s.
The country is now producing around 4.36 million barrels a day from Baghdad-controlled oil fields, up from nearly 2.4 million a day in 2009, and its daily exports averaged 3.450 million barrels a day last month, making it OPEC’s second-largest producer behind Saudi Arabia. Oil revenues make up nearly 95 percent of the country’s budget.
An economic crisis set in over the course of 2014, when the Daesh group swept across much of northern and western Iraq and oil prices plummeted. Iraqi forces concluded major military operations against the extremists last year, but large parts of the country were reduced to rubble.
In February, Iraq secured $30 billion from international donors to help rebuild devastated areas, far from the $88.2 billion Baghdad estimates it needs.
Earlier this month, the Iraqi Cabinet approved a five-year development plan with a target of 6.5 million barrels a day by 2022.
Iraq’s 2018 budget of nearly $88 billion comes with a deficit of more than $10 billion. It is based on a projected oil price of $46 per barrel and a daily export capacity of 3.8 million barrels.