March 23, 2017 / 9:59 AM / 4 months ago

Dubai Duty Free expects $2 mln sales hit from electronics ban

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DUBAI, March 23 (Reuters) - Dubai International Airport's duty free operator estimates that it will lose about $2 million in sales this year from the ban on carrying most electronic devices on United States-bound flights, a senior executive said on Thursday.

Under new security measures announced this week, electronics larger than a mobile phone will be banned from passenger cabins on direct flights to the United States from airports in eight Muslim-majority nations, including the United Arab Emirates, starting Saturday.

"We estimate that the ban will cost us around $2 million in revenue for the year," Dubai Duty Free's Chief Operating Officer Ramesh Cidambi told Reuters in an emailed statement.

The estimate is based on sales of electronics to U.S.-bound passengers, excluding mobile phones and accessories, for 2016 and if the ban runs until the end of the year. U.S. officials have said the ban is indefinite.

Dubai Duty Free made $1.85 billion in total sales last year, Cidambi said.

The chief executive of Dubai Airports, Paul Griffiths, had earlier told DubaiEye radio that the ban on electronics covers goods sold in the airport, including duty free stores.

The regulations, prompted by reports that militant groups want to smuggle explosive devices in electronic gadgets, state that electronics larger than a mobile phone -- including laptops and tablets -- must be stowed with checked baggage on U.S.-bound passenger flights.

Emirates, the only airline operating direct flights to the United States from Dubai, will allow passengers to hand over electronic devices at boarding to minimise disruption, President Tim Clark told Reuters on Wednesday.

However, analysts warn that travellers, especially those who want to use laptops to work during flights, could switch to airlines and airports not affected by the new regulations.

Griffiths said he does not expect a significant impact to Dubai airport's passenger numbers, while Clark said that Emirates will monitor the commercial impact.

Britain followed the United States by introducing a similar ban on Tuesday, though the UK restrictions do not include the UAE.

Reporting by Alexander Cornwell; Editing by David Goodman

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