By Robert Wall
A swell of anti-global trade sentiment is worrying airline executives who are fearful it could lead to slower traffic growth and limit market access.
Retrenching on so-called open skies policies that have made it easier for airlines to connect cities across borders would be "a hugely retrograde step," Tim Clark, president of Emirates Airline said this week. The Dubai-based carrier has grown to become the biggest airline by international traffic.
Concern about increased levels of protectionism has been spurred by the U.S. presidential campaign, where both leading candidates have criticized trade pacts with other countries. These worries have been amplified by Britain's decision in June to leave the European Union and a move by Belgium's Wallonia region to torpedo a trade deal between the EU and Canada. Belgium last month reached a political agreement with the French-speaking region to salvage the Comprehensive Economic and Trade Agreement.
Brian Pearce, chief economist for the International Air Transport Association, said "aviation flourishes where there is free trade. That's a concern for us when we see that potentially threatened."
The industry group that represents more than 200 carriers could be forced to lower its 20-year passenger growth estimate should greater protectionism creep into global trade, he said.
IATA projects airline passenger figures will double over the period with a 3.7% annual growth rate. Under a protectionist scenario, growth could slow to 2.5%. Instead of flying 7.2 passengers in 2035, the industry may transport only 5.8 billion under such a scenario.
Aengus Kelly, chief executive of AerCap Holdings NV, one of the world's largest plane lessors, said "we feel that free trade is vital for continuing growth of the global economy. It would directly impact our business if barriers came up."
The concern comes as some U.S. and European network carriers push their governments to curb growth of rivals. Airlines such as Delta Air Lines Inc. have urged the U.S. to limit rapidly expanding Middle East carriers, including Emirates Airline and Qatar Airways, they accuse of being heavily subsidized. The Persian Gulf carriers deny the charge.
The U.S. also hasn't decided on an application by Norwegian Air Shuttle for easier market access using an Irish operating license. Some U.S. carriers and labor groups have opposed the move.
The EU has backed the application which it argues the U.S. needs to approve under a bilateral open skies accord. Matthew Baldwin, deputy director for transport at the European Commission last month expressed hope the application that has been stalled for years could occur once U.S. presidential elections are over.
Write to Robert Wall at firstname.lastname@example.org
(END) Dow Jones Newswires
November 08, 2016 09:10 ET (14:10 GMT)
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