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U.S. laptop ban could cost economy $500,000,000 a year

Ethan Wolff-Mann
Senior Writer

The US is considering a ban on laptops on flights from Europe, an expansion of the previous ban, announced in March, that restricted electronics in cabins on certain airlines from eight Middle Eastern and African countries.

The move by the Department of Homeland Security would have major consequences. James Stamp, global head of aviation at KPMG, told CNNMoney that business and luxury travel would take a hit.

Realistically, not being able to use a laptop in-flight may not be a deal breaker for business and luxury travelers, inconvenient as it may be. For many businesses, an in-person meeting is still essential, and the lack of a laptop may not be enough to make a video conference an attractive substitute. (The same goes for luxury travel—there is only one Europe, and if you really want to, or need to get there, you’ll go.)

The travel will likely continue, with irritation, but this, however, does not mean that money won’t be lost. And industry groups aren’t particularly happy.

“Everyone supports greater security in the face of the complex, persistent threat of terrorism,” said Greeley Koch, executive director of the Association of Corporate Travel Executives in a statement to Yahoo Finance. “But this ban disrupts business travelers’ ability to travel and remain productive—adding it to the list of disastrous, cumbersome airline security policies we’ve seen over the years.”

Besides productivity, another issue is data security. In a statement to Yahoo Finance, Global Business Trade Association Executive Director (GBTA) and COO Michael W. McCormick noted the ban could be a huge issue for risk management. “Business travelers are taught to keep their devices on hand and in sight at all times for security purposes as they may contain sensitive company data,” he said. “Now business travelers will need to be equipped with new information and ways to keep their company data safe.”

But let’s look at the potential financial toll of lost productivity.

According to the National Trade and Tourism Office—part of the Department of Commerce—4.9 million business passengers flew overseas in 2015, and 39% were traveling to Europe. That’s 1.9 million business passengers. Assuming every passenger has a 7-hour flight home to the US, that’s 13.3 million hours of potential productivity lost. Unlike the flights to Europe, flights from Europe to the US are usually during the day.

The National Trade and Tourism Office also has income statistics of people traveling on business. In 2015, their average income was $152,868. That equates to around $76 an hour. Multiplying that wage by 13.3 million hours comes out to one big number. $1 billion. The GBTA says half of all business travelers “prefer to stay connected and get work done while flying.” So that number may be $500 million per year.

While that’s a big number, it’s important to note passengers intent on working could use their phones and a travel keyboard to get things done, though this may not be feasible for everyone. On the other side, there may also be trickling effects including the airline’s ability to sell its business class seats, as passengers could switch to coach if they’re not working on the plane but need to travel.

Still, as a back-of-the-envelope calculation, it’s clear that a laptop ban would have an effect far greater than simple annoyance. You can’t tamper with one of the busiest business corridors on the planet and not expect it to cost someone something.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann. Got a tip? Send it to tips@yahoo-inc.com.

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