By Dominick Andoh | Trump’s re-election troubles aviation analysts Industry watchers have identified Donald Trump’s re-election and the Russia-Ukraine conflict as prominent global risks that threaten the growth of the global aviation industry.
Analysts anticipate that the global economy will likely undergo accelerated regionalisation due to the former US president’s economic and foreign policies. Furthermore, the transatlantic alliance, which governs the relationship between North America and Europe, may experience fragmentation under a Trump Presidency.
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 in June, 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 panelist, 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 US fuel and his policy regarding fuel from major producers such as Venezuela and Iran are pertinent to the aviation industry.
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.
Emirates Airlines hosted the 80th IATA Annual General Meeting and World Air Transport Summit, which was held from June 2 to 4, 2024, in Dubai, UAE.
The event, hosted by Emirates Airlines in the UAE for the first time, attracted over 1,500 participants, including industry leaders, government officials, and the media. Trump’s re-election troubles aviation analysts
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