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ANALYSIS: Will airlines bear brunt of a global trade war?


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#1 flee

flee
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Posted 14 August 2018 - 10:32 AM

Fears that a global trade war could upset the strong growth of the global airline industry appear to be misplaced, but the devil will be in the detail.
 
Broadly, airlines have been seeing risk increasing from the tariff actions taken by the USA against China, Europe and Canada on certain goods, but few are running for the hills just yet.
 
In Cathay Pacific's recent first-half results letter, chairman John Slosar pointed to the "economic uncertainty arising from global trade concerns" as one of two main challenges for the remainder of the year – the other being the relative strength of the US dollar.
 
In a recently released research paper, IATA Economics also noted that the trade situation was a risk but seemed to indicate that it was unlikely to cause major disruption to the industry.
 
On the passenger side, protectionist measures such as the tariffs imposed by the Trump administration on China and the associated retaliatory actions, are unlikely to have a direct impact. Rather, any change in passenger demand will be induced by how the measures may impact global GDP growth.
 
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