The News
The U.S. aviation industry is lobbying the White House to restore tariff exemptions under the 1979 Civil Aircraft Agreement, which President Trump’s new trade policies have disrupted. With travel demand weakening and aircraft costs rising, airlines and aerospace companies warn that tariffs could cripple their recovery. Major players like American Airlines, Delta, Boeing, and GE Aerospace are urging for a carve-out to avoid further financial strain.
Why It Matters
- Impact on Money:
Rising tariffs could push up airfare prices and airplane costs, hurting airline profitability and consumer travel affordability. - Impact on Opportunities:
Investors should monitor airline stocks, aerospace manufacturing, and aftermarket services closely for volatility or strategic shifts (e.g., deferred deliveries, cost-cutting moves).
MoniTip
- Watch for price corrections in aviation stocks if no tariff relief is granted.
- Suppliers and maintenance service providers may see delayed orders if airlines continue trimming their fleets.
Quick Facts
- American Airlines warns tariffs could sharply raise their largest capital costs.
- Boeing faces $500M annual tariff impact; RTX expects $850M in extra costs.
- March airline fares saw their steepest month-on-month drop since 2021.
- Airlines like Delta, American, and United are pushing back against tariffs on planes and parts, even those assembled in the U.S.
- GE Aerospace says North American aircraft departures may decline due to flight cuts.
