MIAMI – Emirates announced a series of sweeping cuts to its U.S. operation earlier this Spring, reducing frequency to five of its 12 U.S. destinations.

The Dubai-based airline giant cited recent actions by the U.S. government, including two separate blanket bans affecting travelers to the United States from seven and six countries respectively, as well as a ban on carrying large electronics such as laptops in the cabin on flights to the United States departing from Dubai and other airports in the region.

As Maria Roldan reported for Airways:

From May 1 and May 23 respectively, the Fort Lauderdale and Orlando operations will move from daily service to five flights per week. From June 1, June 2, and July 11 respectively, the Seattle, Boston, and Los Angeles operations will move from twice-daily services to a single daily flight.

Emirates serves 12 U.S airports in all: New York JFK, Newark, Boston, Washington DC, Chicago, Seattle, Los Angeles, San Francisco, Houston, Dallas, Fort Lauderdale, and Orlando.

The Trump Effect

The Trump administration has been less aggressive about changing U.S. foreign policy than was initially theorized in the aftermath of the election, largely avoiding massive trade scuffles with China and Mexico as some of the administration’s critics had predicted.

The one region where the Trump administration has taken decisive action is the Middle East in the form of the bans mentioned above or the bombings in Afghanistan and Syria in the last couple of weeks.

But even there, the administration’s policies have been more bark than bite – both travel bans were struck down virtually immediately, and other than the H-1B policy (which could admittedly have a major impact on travel demand to and from India), for the most part, the Trump administration hasn’t majorly cracked down on trade and immigration.

In fact, it’s arguable that the fear of potential action by the Trump administration has had a more powerful impact than the actual actions themselves. Much of the drop in forwarding bookings has been from countries that were not directly affected by either ban (such as India).

And yes said fear has a very real impact on U.S. businesses and citizens, increasing flight costs for all passengers traveling to the Middle East and Asia and hampering inbound tourism and business travel from those countries.

U.S. consumers, businesses, and workers (particularly in the hospitality industry) are undoubtedly worse off as a result of this action by Emirates (and future cuts to U.S. service by Middle Eastern airlines).

But the U.S. consumers, businesses, and workers that are harmed by Emirates’ cuts are not the same as Trump’s constituency (narrowly defined for a moment as Trump supporters and voters).

For the most part, the consumer beneficiaries of low-cost Emirates service to Asia, the Middle East, and Africa are wealthy or affluent people on the coasts (mostly Democrats and beneficiaries of globalization).

Meanwhile, the businesses that do work overseas tend to be clustered on the coasts or in major metropolitan areas (both areas that lean heavily Democratic), and tourists for the most part flock to Blue states like California and New York.

There are no Emirati tourists making a pilgrimage to Cleveland to marvel at the sight of the Cuyahoga River (if they are there, it’s probably to marvel at the sight of Lebron James). And U.S. airline workers (a major organized constituency), who are spread more evenly across Red and Blue states, are likely to have voted for President Trump and to be hurt by competition with foreign carriers.

Thus it’s no shock that even if the Trump administration wasn’t actively trying to harm the Middle Eastern giants, it is shedding no tears at these signs of business hardship.

Listen to Episode 25 of the Airways Podcast, which covers the many challenges facing the Middle Eastern airline giants:

Support the Airways Podcast

These cuts are mostly driven by the electronics ban

There has been a lot of noise around the travel bans to Muslim-majority countries, including headline-grabbing statistics thrown around, such as a 35% drop in U.S. bookings velocity for Emirates.

The 35% drop in bookings velocity was read by most as a 35% drop in bookings, but in reality, it was a 35% drop in the rate of growth of bookings (e.g. bookings might have only been up 6.5% year over year [YOY] instead of 10%).

The ban never really affected large travel markets to and from the U.S., as the big demand drivers to the U.S. like Saudi Arabia, Turkey, and the UAE were unaffected.

The real killer has been the laptop and electronics ban, as this affects much bigger markets like the UAE, Turkey, and Qatar, but more importantly, affects Indians and Indian-Americans traveling via those countries to and from the U.S.

The India-U.S. origin and destination (O&D) market is many times the size of any Middle East – U.S. market, and Emirates, Etihad, and Qatar Airways (the MEB3) built their businesses on the back of connecting traffic from India.

India is a market where access to computers matters for a variety of reasons (most notably due to the large market of traveling IT professionals) and the laptop ban has redistributed that traffic to Air India, Jet Airways, and European carriers like Lufthansa and KLM.

That affects the viability of nearly every U.S. route operated by the MEB3. Emirates and Qatar Airways have done their best to offset the impact of the ban by offering laptops and tablets on loan in premium cabins and collecting laptops at the gate to store them securely at the last possible minute. But it may not be enough.

Etihad and Qatar Airways are next

Emirates is the first carrier to cut back service, but cuts from Etihad and Qatar Airways are undoubtedly coming down the pike.

For Qatar Airways, their ongoing diplomatic crises with neighboring Saudi Arabia and the UAE will certainly hurt passenger numbers. Already, there are reports of severely low load-factor flights and empty corridors at Doha’s Hamad International Airport. Look for frequency cuts at destinations like Atlanta, Las Vegas, Miami, and Philadelphia that are smaller O&D markets. Dallas-Fort Worth and Houston are also probably both over-served given current market demand, and Washington Dulles has incoming competition from Air India that will depress yields.

Etihad Airways has already begun cutting service to the United States. This week, Etihad announced they will end their struggling 3X weekly route to San Francisco. For Etihad, additional cities that are likely to be on the chopping block (for frequencies at least) are Dallas-Fort Worth and Washington Dulles (Etihad has a smaller U.S. network than either Qatar Airways and Emirates). And last but not least, Turkish Airlines could see cuts in Boston, Houston, Miami, and Washington Dulles.

At least until the laptop ban is lifted, expect to see further and deeper cuts from the Middle Eastern giants.