Trade tensions could be spilling into the travel industry.
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00:00I think there are some potential factors that are very hard to anticipate today.
00:06But on a basic level, individuals might be reluctant to plan discretionary spending.
00:12Companies and investors might have poor visibility in terms of their own investment plans for the year.
00:23So the latter factors, for example, could delay business travel
00:28or reduce the demand altogether.
00:30The tariffs themselves, it's still a little bit unknown what impact we're going to have
00:35on airline seat mile cost with respect to the procurement of equipment and maintenance.
00:42So on that level, we could see higher costs start to seep through into earnings results,
00:50at least over the short term.
00:52Certainly those are the ones I would call out and maybe other subtle effects
00:57that are harder to call out, including the extent to which U.S.
01:02consumers might be reluctant to do overseas trips.
01:05Regarding whether consumers should think about tariffs making travel more expensive,
01:10that is absolutely a risk.
01:12So, for example, if the tariffs do put additional pressure on aerospace supply chains,
01:20that will increase equipment costs.
01:22That could also worsen the scarcity of new equipment per capita.
01:28So with less capacity coming through, that indeed could get rolled into price point,
01:34especially for the network airlines.
01:37And that's something at this juncture, I would say, is a key watch item.