Bookings on Dubai's flagship airline Emirates plunged by 35 percent in the wake of U.S. president Donald Trump's January ban on immigrants and refugees from several Muslim-majority countries.
"The first U.S. travel order saw the booking velocity fall by 35% overnight. The effect it had was instantaneous," President of Emirates Tim Clark told journalists earlier this month. Overall, bookings to the U.S. from the Middle East have declined a steep 25 percent from the same period last year, according to The National.
While the dip is understandable in light of Trump's anti-Muslim and generally xenophobic rhetoric, some have pointed to an ongoing feud between three U.S. airlines – American Airlines, United Airlines and Delta Air Lines – and Gulf carriers – Emirates, Etihad Airways and Qatar Airways, as a possible additional motivation for Trump's travel ban.
Clark said bookings have recovered somewhat since Trump's initial executive order was blocked, and a second revised ban – which has also since been frozen by a federal court – was announced. But bookings are still lower than before and it's uncertain when they will fully recover, Clark said.
Does Trump want to cripple Arab airlines in favor of American competitors?
To follow-up the attempted travel ban, Trump's government is now planning to prohibit electronics on flights from several Middle Eastern and North African countries. Unlike the travel ban, Qatar, Saudi Arabia and the UAE will all be affected. But these countries airports and airlines were also indirectly affected by the travel ban, as many travelers from the countries in question transit through their airports.
This has lead to speculation that Trump is tacitly supporting U.S. airlines against Gulf rivals. But, while this effect may result from Trump's policies, it's not necessarily intentional.
In the past, Trump has previously praised Qatar and Dubai's airports directly. He has also praised Dubai more generally, saying he sees a "great, great future" in the emirate. His family also maintains business interests in the Gulf and has voiced plans to expand these in the future.
At the same time, it's no secret that the three American carriers are lobbying Trump's administration to take a stand against their Gulf competitors. A spokesperson for the three U.S. airlines confirmed this in a statement, according to Business Insider.
Why the controversy?
While the three big Gulf airlines have seen immense growth and soaring profits in recent years, American carriers have struggled to compete. As Qatar Airways, Emirates and Etihad Airways have all expanded their global networks, they have begun flying to many U.S. cities as well.
U.S. airlines feel threatened by the competition. Not only are these airlines entering their markets, they also offer significantly superior quality and service. Year to year, the three Gulf carriers dominate the top spots on global rankings of airlines, while their American competitors lag far behind.
As a result, the U.S. airlines have gone on the offensive, and have accused the Gulf carriers of benefiting unfairly from some $42 billion in subsidies from their respective governments. They say this violates the international Open Skies Agreement.
Etihad Airways responded in 2015, pointing out that the U.S. airlines have received more than $70 billion in subsidies from their government as well. It wasn't so much criticizing the fact, just pointing out the hypocrisy.
"We do not question the legitimacy of benefits provided to U.S. carriers by the U.S. government and the bankruptcy courts," Etihad General Counsel Jim Callaghan said in a press release at the time.
"We simply wish to highlight the fact that U.S. carriers have been benefiting and continue to benefit from a highly favorable legal regime, such as bankruptcy protection and pension guarantees, exemptions from certain taxes, and various other benefits," he said.
The U.S. competitors have also argued that Gulf airlines threaten American jobs. But the CEO of Qatar Airways Akbar Al Baker pointed out that his airline and the others have created thousands of jobs in the U.S. through their expansion.
These jobs are not only limited to aviation workers, but also extend to manufacturing.
Gulf airlines buy U.S.-made planes and Trump loves manufacturing jobs
A big talking point of Trump's campaign rhetoric was bringing back manufacturing jobs to the U.S. Whether or not he will be able to fulfill this promise, which many experts have said is unlikely, remains to be seen.
But, it would seem counter-intuitive to target companies investing a lot of money in American manufacturing, such as the three Gulf carriers. The Boeing Company is an American multinational corporation that designs, manufactures and sells airplanes, and Emirates is one of its biggest clients.
Emirates maintains the world's largest fleet of Boeing 777s, worth some $45 billion. The company has pending orders for another $86 billion worth of Boeing 777s, according to Business Insider.
And that's not all. Collectively, Emirates, Qatar Airways and Etihad Airlines have purchased 80 percent of all the new Boeing 777X aircrafts ever produced by the American company.
The manufacturing goes beyond Boeing as well. Many of Emirates' planes are powered by General Electric GE90 engines. General Electric (GE), like Boeing, is a massive American multinational organization. Even many of the non-American aircraft flown by the three Gulf carriers are powered by GE engines.
So, while American airlines definitely want Trump to take their side and while his policies may currently be negatively impacting the Gulf carriers, the economic reality of targeting these competitors is far more complicated.