Trump’s bid to impose tariffs on the United States’ trading partners have upended commercial flows, with legal challenges against his plan adding to uncertainties.
“The airline sector is always sensitive to the economic and political climate,“ Paul Chiambaretto, professor of strategy and marketing at France’s Montpellier Business School, told AFP.
The influential International Air Transport Association (IATA) is due to update its traffic and profitability projections as the delegates from the group gathering 350 airlines hold their talks.
However, the US president’s “Liberation Day” tariff blitz and his administration’s stance on issues from immigration to education could throw a spanner in the works.
As early as March, the North American air transport market, which represents 23 percent of global traffic, began to decline and several US-based airlines warned they would not meet their financial targets.
The group, made up of leading travel firms, said this “represents a direct blow to the US economy overall, impacting communities, jobs, and businesses from coast to coast”.
Didier Brechemier, an airline industry expert at Roland Berger, said: “Today, bookings for the North Atlantic are lower than they were at the same time last year.”
Air transport has for decades benefited from the removal of import taxes, rising living standards -- particularly in Asia -- and open borders, with the number of air trips tripling since 2000.
Lower energy costs
That could help firms reduce their fuel bills -- representing between a quarter and a third of their operational costs -- by hundreds of millions of dollars.
Sustainable development “has largely disappeared from the airline industry’s immediate priorities”, says Jerome Bouchard, a partner at consultants Oliver Wyman.
India is experiencing explosive growth, with the number of airports and passengers in the world’s most populous nation doubling over the past decade, while major airlines IndiGo and Air India have hundreds of aircraft on order.
The row poses an additional complication for connections to Asia, as Russia has banned US and EU aircraft overflights in retaliation for sanctions linked to its invasion of Ukraine.
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