Growing tension over international trade will damage airline industry

Vastavam web: Growing tension over international trade could damage the airline industry and the world economy, global airlines and aviation executives warned on Sunday.The U.S. government has renewed tariff threats against China and imposed duties on steel and aluminium on U.S. allies Canada, Mexico and the European Union.

“We always get concerned when you start to see tensions elevate around global trade and free trade,” American Airlines Group Chief Executive Doug Parker said. American has not seen any effect yet on revenues, he said.The uncertainty could curb demand for the business travel, a key driver of profits for the airline industry, Gloria Guevara Manzo, chief executive of the World Travel and Tourism Council (WTTC).Planemakers Boeing and Airbus echoed that the uncertainty was bad for business and said free trade helped to drive economic growth, creating jobs. Airbus said the aviation industry existed because people could travel freely and markets were open.

“We are in a worldwide industry here,” Airbus Chief Commercial Officer Eric Schulz told reporters. “We see it in a negative way because it is putting borders and putting constraints for everybody, including our customers.”Tariffs would not have a material impact on Boeing’s results, Randy Tinseth, the company’s marketing vice president for commercial airplanes told.Guevara Manzo also said the WTTC was concerned about tariffs because they meant less money to invest in infrastructure, such as ports, airports and hotels. “Steel for hotels is like flour for bakeries,” she said.

The annual IATA meeting brings together about 130 CEOs and 1,000 delegates.This year in Sydney, concerns that a three-year run of unusually high returns might end as fuel, labour and infrastructure costs rise are in the spotlight.