The major global airline companies fear as Trump administration is imposing stricter tariffs in many goods from China.
Most of the tourism and aviation executives at some of the world’s largest airlines say that they fear the US President Donald Trump’s decision which could encourage a trade war and depress demand for travel between the U.S. and China. This will give a huge impact in MICE tourism business.
President Trump announced that he had directed the U.S. trade representative to evaluate the stricter tariffs on up to $60 billion of Chinese goods.
The administration officials of USA have said they search for the stricter tariffs both to punish Chinese companies to for stealing American intellectual property, and to protect American interests.
The Trump Administration has not yet said exactly what goods will be affected, but details should come within a couple of weeks.
There are many experts, investors and business people fear the tariffs may not have the effect Trump envisions, suggesting they could lead to a trade war, with companies on both sides suffering.
Most of the airlines could be one of the many industries that lose, as fewer customers many want to travel between the U.S. and China.
Boeing may also find the situation problematic, as it sells a significant number of jets to Chinese airlines.
While on the contrary, the U.S. airline stocks took a hit Thursday, most did not fall as much as the broader Dow Jones Industrial Average, which dropped more than 700 points, or nearly 3 percent.
United Airlines shares were off 2.13 percent, American’s fell 1.78 percent, and Delta’s decreased 2.29 percent. Boeing’s stock, meanwhile, lost 5.25 percent.
China also introduced the nonstop routes to protect its domination in the aviation market — both governments settle on how many flights carriers from each country can fly – but even with restrictions, there’s often more capacity in the market than demand.
The aviation fares can be low, especially in the off-season, as airlines discount to fill seats.
