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Wider Laptops Ban Would Cost Airlines $1 Billion, IATA Head Says

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  • Wider Laptops Ban Would Cost Airlines $1 Billion, IATA Head Says

The widening of a U.S. ban on carrying electronic devices aboard aircraft to include flights from Europe would cost travelers more than $1 billion, the head of the airline industry’s global lobby group said.

Extending the curbs, which currently apply only to some U.S.-bound services from the Middle East and North Africa, would obstruct travel and might not be the best way of countering the threat, International Air Transport Association Chief Executive Officer Alexandre de Juniac said in an interview Wednesday.

“Traveling with your laptop is part of everyday life,” De Juniac told Bloomberg, predicting that further measures will cause “significant” disruption in the trans-Atlantic business market. “We are not sure that this ban is adapted to the threat. We don’t know what is the basis or intelligence that justifies this measure.”

While the Mideast moratorium affects 350 U.S.-bound flights per week, extending it to the 28 European Union states plus Switzerland, Norway and Iceland would impact 390 a day, or more than 2,500 a week, IATA reckons. The measure would cost passengers $655 million in terms of lost productivity, $216 million from longer travel times, and $195 million for the rental of loaner devices on board, it calculates.

Some businesses will also choose to cancel trips rather than hand over laptops loaded with confidential information, according to the industry group, which represents 265 airlines around the world. Carriers themselves would incur costs from departure delays, additional handling of hold luggage and liability for damaged or stolen devices, while traveler numbers, fares and ultimately frequencies could all decline, it says. At the same time, flights may become less safe as more lithium battery-powered are stowed in holds.

U.S. Considers Expanding Airline Laptop Ban Beyond Europe

IATA needs to be told more about U.S. concerns in order to contribute to developing a solution, De Juniac said, adding: “We can provide appropriate advice when it comes to security and protection measures for passengers. What we have said to the U.S. and U.K. authorities and to the Europeans is, please, if you want to take this measure, work very closely with the industry.”

IATA wrote to U.S. Homeland Security Secretary John Kelly and European Transport Commissioner Violeta Bulc on Tuesday expressing “serious concern” regarding an expanded ban and detailing the estimated passenger costs, according to a copy of the letter seen by Bloomberg.

If governments agree that wider curbs are necessary they should consider applying measures to enhance security while avoiding the concentration of devices in holds, the communication says. That could include the increased use of explosives detectors and sniffer dogs, closer visual scrutiny of devices, the deployment of behavioral detection officers, and the implementation of trusted-traveler programs to help identify lower-risk passengers, it says.

While there has been some U.S. consultation with airlines that has allowed the industry to at least express its concerns — in contrast to the “badly implemented” Mideast ban — more detail needs to be provided, De Juniac said.

The comments from the IATA chief, who was previously CEO of Air France-KLM Group, come as U.S. and European Union officials prepare to meet in Brussels today to discuss the widening of the ban, which also covers tablets and games consoles while excluding smaller devices such as phones. The EU has no information on the reasons for the move, officials have said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Oil Prices Decline on Rising India COVID-19 Cases, U.S Inflation Concerns

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Global oil prices extended a decline on Friday following a 3 percent drop on Thursday as coronavirus cases rose in India, one of the world’s largest oil consumers.

Brent crude oil, against which Nigerian oil is priced, declined by 35 cents or 0.5 percent to $66.70 a barrel at 5 am Nigerian time on Tuesday while the U.S West Texas Intermediate (WTI) fell by 28 cents or 0.4 percent to $63.54 per barrel.

The commodity super cycle rally just hit a hard stop and the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India,” said Edward Moya, senior market analyst at OANDA.

The crude demand story is still upbeat for the second half of the year and that should prevent any significant dips in oil prices,” he added.

Prices dropped over a series of key economic data that stoke inflation concerns and forced experts to start thinking the Federal Reserve could raise interest rates to curb the surge in inflation.

An increase in interest rates typically boosts the U.S. dollar, which in turn pressures oil prices because it makes crude oil more expensive for holders of other currencies.

This coupled with the fact that India, the world’s third-largest oil consumer, recorded more than 4,000 COVID-19 deaths for a second straight day on Thursday, dragged on the oil outlook in the near term.

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Brent Crude Rises to $69 on IEA Report

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Oil prices rose after the release of the International Energy Agency’s (IEA)  closely-watched Oil Market Report, with WTI Crude trading at above $66 a barrel and Brent Crude surpassing the $69 per barrel mark.

Prices jumped even though the agency revised down its full-year 2021 oil demand growth forecast by 270,000 barrels per day (bpd) from last month’s assessment, expecting now demand to rise by 5.4 million bpd. The downward revision was due to weaker consumption in Europe and North America in the first quarter and expectations of 630,000 bpd lower demand in the second quarter due to India’s COVID crisis.

The excess oil inventories of the past year have been all but depleted, and a strong demand rebound in the second half this year could lead to even steeper stock draws, the IEA said yesterday, keeping an upbeat forecast of global oil demand despite the weaker-than-expected first half of 2021.

However, the upbeat outlook for the second half of the year remains unchanged, as vaccination campaigns expand and the pandemic largely comes under control, the IEA said.

Moreover, the global oil glut that was hanging over the market for more than a year is now gone, the agency said.

“After nearly a year of robust supply restraint from OPEC+, bloated world oil inventories that built up during last year’s COVID-19 demand shock have returned to more normal levels,” the IEA said in its report.

In March, industry stocks in the developed economies fell by 25 million barrels to 2.951 billion barrels, reducing the overhang versus the five-year average to only 1.7 million barrels, and stocks continued to fall in April.

“Draws had been almost inevitable as easing mobility restrictions in the United States and Europe, robust industrial activity and coronavirus vaccinations set the stage for a steady rebound in fuel demand while OPEC+ pumped far below the call on its crude,” the IEA said.

The market looks oversupplied in May, but stock draws are set to resume as early as June and accelerate later this year. Under the current OPEC+ policy, oil supply will not catch up fast enough, with a jump in demand expected in the second half, according to the IEA. As vaccination rates rise and mobility restrictions ease, global oil demand is set to soar from 93.1 million bpd in the first quarter of 2021 to 99.6 million bpd by the end of the year.

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OPEC Expects Increase In Global Oil Demand Raises Members’ Forecast on Crude Supply

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The Organisation of Petroleum Exporting Countries (OPEC) yesterday lifted its forecast on its members’ crude this year by over 200,000 bpd and now expects demand for its own crude to average 27.65mn bpd in 2021.

This is almost 5.2mn bpd higher than last year and around 2.7mn b/d higher than an earlier estimate of the group’s April production.

According to the highlights of the organisation’s latest Monthly Oil Market Report (MOMR), OPEC crude is projected to rise from 26.48 million bpd in the second quarter to 28.7 million bpd in the third and 29.54 million bpd in the fourth quarter of the year.

The report also indicated a fall in Nigeria’s crude production from 1.477 bpd in February to 1.473, a difference of just about 4,000 bpd before rising again in April to 1.548 million bpd, to add 75,000 bpd last month.

OPEC stated that its upward revision of members’ crude was underpinned by a downgrade in the group’s forecast for non-OPEC supply, which it now expects to grow by 700,000 bpd to 63.6mn b/d against last month’s report’s projection of a 930,000 bpd rise to 63.83mn bpd.

The oil cartel projected that US crude output would drop by 280,000 bpd this year, compared with its previous forecast for a 70,000 bpd decline.

On the demand side, OPEC kept its overall forecast unchanged from last month’s MOMR, stressing that it expects global oil demand to grow by 5.95 million bpd to 96.46 million bpd this year, partly reversing last year’s 9.48mn bpd drop.

Spot crude prices fell in April for the first time in six months, with North Sea Dated and WTI easing month-on-month by 1.7 percent and 1 percent, respectively.

On the global economic projections, the cartel said stimulus measures in the US and accelerating recovery in Asian economies might continue supporting the global economic growth forecast for 2021, now revised up by 0.1 percent to reach 5.5 percent year-on-year.

This comes after a 3.5 percent year-on-year contraction estimated for the global economy in 2020.

However, global economic growth for 2021 remains clouded by uncertainties including, but not limited to the spread of COVID-19 variants and the speed of the global vaccine rollout, OPEC stated.

“World oil demand is assumed to have dropped by 9.5 mb/d in 2020, unchanged from last month’s assessment, now estimated to have reached 90.5 mb/d for the year. For 2021, world oil demand is expected to increase by 6.0 mb/d, unchanged from last month’s estimate, to average 96.5 mb/d,” it said.

The report listed the main drivers for supply growth in 2021 to be Canada, Brazil, China, and Norway, while US liquid supply is expected to decline by 0.1 mb/d year-on-year.

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