Emirates is the latest airline to voice its concern over the US and EU’s tit-for-tat trade spat, which it believes will likely lead to a price hike on fares.
The festering trade war between the US and EU has seen import duties slapped on commercial jets and will lead to more expensive aircraft.
The additional costs incurred by airlines will likely have to be passed onto passengers, Emirates' president Sir Tim Clark said at the Aviation Show in Dubai on Monday.
The World Trade Organisation’s (WTO) recent ruling granting the US the go-ahead to put tariffs on European goods, including Airbus planes, will lead to retaliation by the EU in the first quarter of 2020, Sir Tim said.
“Whether sense will prevail, I have no idea. One would assume that if [Boeing and Airbus] both get their knuckles rapped then the only downside is that the airlines…and the price we pay will be affected.
“In the end, the prices we get charged as a result of tariff imposition will be passed through, as they have to, to consumers, so prices are likely to rise.”
President Donald Trump plans to introduce a 10% levy on large European commercial jets in the wake of the WTO’s ruling, which declared that Airbus unfairly benefitted from illegal state aid.
The WTO is considering a similar case against US-based Boeing that is due to be decided next year. The EU says it will introduce tariffs of its own if the US acts now.
In his address, Sir Tim also discussed how Brexit is impacting on Emirates.
He said that since the UK voted to leave the EU in the 2016 Referendum, the demand for travel on Emirates into the UK has been growing by about 6% to 8% a year.
“We’ve increased our production there, we’ve put A380s into Glasgow, we have two flights a day into Stansted. So when I’m asked by UK press: ‘how is Brexit affecting us?’ Well, if this is how it’s going, when it all settles, we’ll get even more. By the end of next year and into 2021, I think things will start moving ahead.”