Internatinal travel is lucrative for airlines, but a potential expansion of the Trump Administration’s electronics ban could put a big monkey wrench in demand for international and luxury travel markets, which fall into our Affordable Luxury and Rise & Fall of the Middle Class investment themes. If the Trump ban is extended, it would mean Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL), and British Airways (BAIRY) – combined, those four airlines account for nearly 60 percent of all nonstop flights from Europe to the U.S.
The U.S. introduced rules in March that require any electronic device larger than a smartphone to be carried in checked baggage on flights from 10 airports in the Middle East and Africa. (It cited intelligence suggesting terrorists could hide explosives in bigger devices.)
The details of a potential expansion of the Trump administration’s electronics ban are not yet clear. But the aviation and tourism industries are preparing for the worst.
James Stamp, global head of aviation at KPMG, said that business and luxury travel is likely to take a significant hit from a laptop ban, unless airlines can figure out a workaround. “The North Atlantic market is highly competitive, but also highly profitable because of the links between the key financial centers of Europe and New York,” he said.
That means no laptops in the cabin — a major sticking point for business travelers. Stamp noted that many businesses won’t even allow employees to check a laptop.
The worry for airlines is that bookings could slump.