Analysts warn travellers

Airline passengers could soon face higher ticket prices following new tariffs introduced by former President Donald Trump. Analysts warn that the added cost of imports, now in effect as of April 9, may be passed on to consumers. JPMorgan Chase’s chief US economist, Michael Feroli, suggests these tariffs could reduce disposable income and slow consumer spending. The U.S. stock market responded with mixed results, especially after China announced a retaliatory 50% tariff on American goods, deepening trade tensions. Airlines are already feeling the pressure, with Delta and United Airlines seeing share prices drop over 30%, and American Airlines falling 44% since the start of the year.

While flight prices had recently dropped due to reduced demand, analysts predict this trend will reverse. Tariff-related costs are expected to shift onto passengers, which could impact demand and profits. Boeing CEO Kelly Ortberg emphasized the importance of free trade, noting that most of their planes are sold internationally. Despite some experts believing aerospace firms might weather the impact, others, like Vertical Research Partners, expect rising costs to hurt airline margins and raise fares. The long-term effects remain uncertain, but as budget airlines struggle, travelers may bear the brunt of the economic fallout.