By Dominick Andoh | Harris vs. Trump: What the U.S. elections mean for the aviation sector. The 2024 United States presidential election is taking place today, Tuesday, November 5, 2024. Voters in each state and the District of Columbia will select electors for the Electoral College. These electors will then choose the president and vice president, who will serve a four-year term.
US Vice President Kamala Harris, representing the Democratic Party, is competing against Donald Trump of the Republican Party. The outcome of this election will significantly influence the country’s future direction and shape policies that affect the aviation and travel industry.
The policies proposed by both candidates will impact the cost of flights and the availability of numerous flight options to and from the US, as well as the global aviation market as a whole.
Aviation sector analysts view the potential re-election of former President Donald Trump as a risk that could hinder the growth of the global aviation sector. His economic and foreign policies are expected to accelerate the regionalization of the global economy. Additionally, if Trump is elected, the transatlantic alliance, which governs the relationship between North America and Europe, may face fragmentation.
Dr. Simon Evenett, Professor of Trade and Economic Development at the University of St. Gallen, speaking as part of a panel at the 80th IATA World Air Transport Summit held in Dubai said: “I think we’re quite likely to see an acceleration of regionalisation of the global economy, especially if Donald Trump gets elected. Europe will abandon North America.”
The North American Free Trade Agreement (NAFTA) established a free trade zone among Canada, the USA, and Mexico. Dr. Evenett believes the three-decade-old trade alliance will likely fragment under a Trump Presidency.
“For the simple reason that I think the transatlantic alliance fragments if he is re-elected. Europe will turn its back on North America; North America will turn inward. If you’re running an airline in North America, then the NAFTA agreement will be renegotiated to the benefit of the United States and to marginalise those Mexican factories which are all being built now,” he predicted.
Nick Allan, the Chief Executive Officer (CEO) of Control Risks, who was also a panellist, believed that Trump’s previous presidency was not that bad for business.
“I’m not an American citizen, but Trump’s previous presidency, if you’re objective about it, lots of the things he did were not bad for business. The biggest input for airlines is fuel. You will see a huge increase in U.S. drilling; from an environmental perspective, you might not like that. So, from a fuel price perspective, it probably increases fragmentation. Except we have been forewarned of what might happen [under Trump] in terms of protectionism. Yes. So we can’t say we weren’t told,” Mr. Allan said.
If elected, President Trump’s approach to the availability of U.S. fuel and his policies regarding oil imports from major producers such as Venezuela and Iran will significantly impact the aviation industry. A potential halt in supplies from these two countries could lead to a decrease in fuel availability in the short term, resulting in higher fuel prices that would ultimately affect how much you pay for your next vacation ticket.
On the other hand, Democratic candidate Kamala Harris is expected to largely continue the policies of her predecessor, Joe Biden. This approach would involve maintaining oil production levels while overlooking oil supplies from Venezuela and Iran to ensure adequate fuel availability for the aviation industry and its allies. As a result, since fuel accounts for approximately 60 percent of airlines’ operating costs, it is likely to remain available and relatively affordable, helping to prevent sharp increases in ticket prices in the short to medium term.
Dr Amrita Sen, Founder and Director of Research, Energy Aspects, noted: “I think it’s a very political point to say that Trump is going to come and actually raise production. It [production] has been growing under Biden. If anything, yes, Biden has made permitting harder, but that has not had any impact whatsoever on near-term production.
“It’s at 13.3 million barrels per day; we expect it to go to 13.7. I don’t disagree that Trump is going to make it easier on a permitting basis. But the bigger challenge with U.S. production is we are running out of what we would call sweet spot supplies. The risk, if Trump comes to power, is going to be Iran, Venezuela, what is he doing to international supplies. The Biden administration has completely turned a blind eye, and we’re getting about 800,000 barrels per day more from Iran,” she said. The election outcome will determine the future of the aviation industry in the US and globally.
AviationGhana | Harris vs. Trump: What the U.S. elections mean for the aviation sector.
