What a year. First Brexit and now Trump. What does a Trump victory mean for aviation? The Republicans now have control of the White House, the House of Representatives and the Senate. They have the mandate to push through just about anything in the near term. This may have ramifications for the US Export-Import Bank? Republicans have expressed their desire to close the bank down and now they have their chance to do so. It remains to be seen if this is the action they will take but the future of US Ex-Im bank is far more uncertain than it was some 24 hours ago.
For domestic US airports the Trump victory is better news. Trump announced that large scale infrastructure projects will be at the top of his agenda. US infrastructure is in dire need of repair and upgrade, so finally the investment seems to be coming to bring US airports into the 21st century and connect them to city centres. For domestic airlines across the USA, this is a very good result because the Republicans are highly likely to look again at the incursion of Middle East carriers and European low cost carriers into their airspace. So should we worry for Norwegian, Emirates, Etihad and Qatar going forward? We should only worry about the possibility of increased future access, there is no reason to assume that the Republicans will look again at the access currently enjoyed. But, the US majors are lobby hard for this to happen and the next month or two is their chance to try and push this course of action forward. Expect the lobbying to be very intense indeed by the US airline groups. We could also argue that rate rises in the USA might now be off of the table which is good news for the leasing community.
So the current round of filling-in the export credit gap being undertaken by a myriad small and large financial houses looks set to continue.
Putting this Trump victory into a global context, a distinct pattern is emerging across the Western political sphere with voting against the establishment becoming the norm – or rather these results are more a protectionist movement. The Greeks two years ago, Brexit in the UK, Trump in the USA – what now for Italy, France and Germany? Will Italy throw the EU into turmoil at their next election? Will the French veer to the right? Will the Germans see no overall majority? The general pattern thus far is one that Russia can be thankful for and the world now looks to Trump to give some words of assurance that NATO is a top strategic priority in order to keep the status quo intact. Investing in defence supply companies and infrastructure supply companies looks to be the best bet at this time, aside from of course gold which was already rising fast before today.
This is an uncertain time, a worrying time, but it is without doubt an interesting time.