The US Department of Government Efficiency (DOGE) is of the greatest concern to the aviation industry, especially when it starts to “muck around” with the US Federal Aviation Administration (FAA). "FAA is the standard bearer of aviation safety ... and we have to make sure they continue to be that robust and resilient force when it comes to aviation safety," director general of the Association of Asia Pacific Airlines (AAPA), Subhas Menon, tells in a 12 February interview. When asked about the impact of a Trump presidency on the aviation industry, Menon brushed aside the impact of tariffs and geopolitical tensions but instead highlights the “dangerous approach” the current administration is taking when it comes to safety. His comments came before it was revealed that the FAA had fired hundreds of employees on probation, as part of cost-cutting measures, and raising further concerns on air safety after a string of accidents in the USA. While the country’s transportation secretary Sean Duffy clarified on X that no air traffic controllers and critical safety personnel were made redundant, it comes amid the wider pressure that DOGE is applying across government agencies to seek out cost savings under the leadership of Elon Musk. The association chief also points to US president Donald Trump’s comments in the wake of a deadly crash between a MHIRJ CRJ700 and a US Army Sikorsky H-60 Black Hawk helicopter over Washington on 29 January. In a stark departure from usual protocol, the president blamed diversity programmes in the federal government for the crash without citing evidence and while the official National Transportation Safety Board investigation into the crash was underway. “They [Trump] immediately said thing which no leader should be saying without having all the facts at his disposal and casting aspersions on air traffic controllers. That's not good,” says Menon. TARIFF IMPACT LIMITED Speaking on the potential impact of tariffs, Menon says: “I don't think we need to be too worried, because whatever [Trump] does, there will be a reciprocal effect.” "If he imposes tariffs on European aircraft, Europeans will impose tariffs on American aircraft,” he quips, and in the meantime the two major airframers will still need to ensure prices remain competitive in a key region. Furthermore, regional travel remains strong in the Asia-Pacific region, Menon says, explaining that, for now, carriers are collectively trying to grow their capacity but are constrained by the lack of aircraft and spare parts as a global supply chain crunch continues. Preliminary AAPA data shows that passenger traffic among Asia-Pacific carriers rose 31% in 2024 over the previous year, while load factor increased to a record 81.6% as unit revenues outpaced capacity growth. More widely, he says the tariffs will have implications beyond aviation and businesses will have to adjust and find its own equilibrium, while Cebu Pacific chief executive Mike Szucs likewise points to the resulting impact on the wider economy. Speaking at a low-cost carrier panel at the Aviation Festival Asia in Singapore on 19 February, Szucs says: "Particularly as LCCs, we've always been looking at GDP multiples feeding through into sort of traffic demand so anything that reduces economic growth will ultimately create a problem." "If that happens for whatever region in the country, and it somehow impacts economic growth in the Philippines or in this region, then we will see an impact on travel." Speaking on the same panel, John Simeone, chief executive officer of Jetstar Asia echoes Menon’s views that traffic out of the likes of Australia, Japan, South Korea and Thailand remains strong and he “can’t see that changing too fast”. "So there is impacts in [from] cost of living and geopolitical tensions. But the reality is people do prioritise travel, people that learn that travel is very important to them, and I think it's just a case of stimulating demand where you need." Szucs adds, however, that tariffs may become a problem if they start limiting the movement of critical aircraft components, especially as the industry is already reeling from a lack of spare parts.

Abu Dhabi-based Etihad Airways made a post-tax profit of $476 million in 2024, up from $143 million the previous year. The Middle Eastern carrier says revenue increased 25% to $6.9 billion. Passenger revenue rose from $4.5 billion to $5.7 billion, while cargo revenue was up 24% at $1.13 billion. Passenger numbers grew 32% to reach 18.5 million. Capacity was lifted 28% as the airline added 12 aircraft and boosted utilization, it notes. Load factor came in at 87%, versus 86% in 2023. "These results are testament to the dedication of our people who have worked together for a purpose, delivering our strategy," states chief executive Antonoaldo Neves. "Their efforts have driven improvements in customer satisfaction measured across all cabin classes and numerous other touchpoints. "Looking ahead, I am confident we will continue to be a financially strong airline delivering extraordinary customer experiences, fulfilling our shareholder's mandate, and contributing to the long-term prosperity and success of the UAE." As of 31 December 2024, Etihad had an operating fleet of 97 aircraft, including six new Airbus A320neos.

European governments should have allowed some of the continent's airlines to collapse during the pandemic to accelerate consolidation, according to SAS chief executive Anko van der Werff. Speaking at the UK Aviation Club in London on 19 February, Werff explains that in his view, “I don’t think that all options were explored” during the pandemic, and, when it hit, “a number of airlines together just ran to governments and asked for government support, including SAS, before I arrived. I truly believe [providing bailouts] was the wrong solution.” He argues that Europe is suffering from a fragmentation in its airline market that means carriers do not have the economies of scale to invest in their products or compete globally, calling them “breakeven airlines”. As an example, whereas in the USA four large players represent 80% of the market and are “hugely profitable”, in Europe the same market share is divided between 17 carriers that struggle for financial sustainability, he highlights. Covid therefore was a chance to let the market consolidate around its main players that would have emerged larger and more profitable, as well as better able to compete globally and provide a service to their customers. “I do believe 2020 was a massive opportunity to… restructure a business that is perpetually losing money,” he continues. “Had I been in the European Commission or a prime minister somewhere… there was a golden opportunity for politicians to say: ‘No, aviation industry… Sort yourselves out. Fix it with market money.’” Commenting that this is close to what happened in Latin America and the USA, he adds that their aviation markets have come out of the pandemic “better than Europe’s has”. SAS itself received €1 billion ($1 billion) in backing from state shareholders Sweden and Denmark in 2020, comprising equity participation, a rights issue, and other support. Both countries increased their stakes as a result, but SAS went on to institute Chapter 11 bankruptcy protection and restructuring which wiped out much of the airline’s existing ownership positions. Having emerged from the process in August 2024, today private equity firm Castlelake holds a 32% stake in the airline, with Denmark holding 25.8%, Air France-KLM 19.9%, Lind Invest 8.6%, and the rest divided among creditors. Werff joined the company in 2021 having previously led Colombia’s Avianca. Core to the problem has been European government indecision over whether to treat its airlines as businesses or essential infrastructure that needs to be protected, Werff believes. Furthermore, he highlights what he describes as contradictory policy from the Commission, which acts to push up prices to consumers with environmental charges and other regulations on its airlines, while at the same time blocking consolidation on the grounds that it could increase fares. Such anti-business positions, as he sees them, “remains an issue that I have [with Europe]”, he continues, adding that the ease of operating in the USA makes it “a different world” for airlines.