The Office of the US Trade Representative (USTR) has placed new tariffs on aircraft manufacturing parts as well as some alcohol products from the European Union in an ongoing transatlantic spat about aerospace subsidies. The USTR accuses Europe of unfair calculation when it imposed a round of tariffs that resulted from World Trade Organisation (WTO) litigation earlier this year. In October, EU authorities secured the right to impose almost $4 billion in tariffs on US imports, including aircraft, in retaliation for harm arising from US government subsidies to Chicago-based airframer Boeing. That’s just over half of the $7.5 billion awarded to the US side following a similar subsidies case a year earlier. The USTR says the time period that Europe used to calculate its levies varied from that used to calculate its own earlier tariffs on European products, hence the adjustment. “In implementing its tariffs… the EU used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the Covid-19 crisis,” USTR writes. The result was that Europe placed tariffs on far more products than if it had “utilised a normal period” to calculate them, it adds. “However, in order to not escalate the situation, the United States is adjusting the product coverage by less than the full amount that would be justified utilising the EU’s chosen time period,” USTR says. Aircraft parts, non-sparkling wines, cognacs and brandies from France and Germany will be the target of the new levies. It is not clear when these are to begin. It is the latest move in a long-running trade dispute between US and European regulators on subsidies for large civil aircraft that has been broiling since 1994. Boeing started the transatlantic duel with Airbus over subsidies, but following the WTO’s rulings of one another’s cases the conflict has descended from legal sniping into a tiresome war of attrition. Each side has imposed tariffs on a range of products – of which aircraft are the most high-profile – while underlining reciprocal claims of unfair government support. In February, the USTR raised its tariffs on large European aircraft to 15%, up from the 10% levy it had implemented in October 2019, when it had been given the right to impose up to 100% tariffs on $7.5 billion of goods, including Airbus jets of more than 30t. At that time, the US also introduced 25% levies on other specialty products such as Irish and Scotch whiskey, German machinery, and cheese. Earlier this month, the UK’s Department for International Trade said that it had opted for an “independent approach” to the aerospace conflict, as well as other trade issues with the USA, and unilaterally suspended the tariffs on US aircraft imports. The UK’s departure from the EU this year – and the impending end of the transition period on 1 January 2021 – means it will be able to act separately from the EU in the future.

Mexican low-cost carrier Interjet has extended its grounding until at least 11 January, after cancelling all flight operations during the Christmas period. Although other local carriers such as Aeromexico, Volaris and Aeromar have recovered many of their suspended frequencies to serve the increased holiday demand for travel, Interjet says it "is not operating some of its routes due to the situation created by the Covid-19 pandemic". Currently, no flight can be booked with a travel date on or before 10 January. Some domestic routes show availability from 11 January. Previously, ticket agents had indicated that flights would resume on 1 January. According to an airline source, almost 60 Airbus A320-family jets have been repossessed by their owners, while "those few still stored at Interjet's Toluca facilities" are not in airworthy condition. These leaves the airline with a small fleet of Superjet 100s, of which only five remain in operation, says the source. Mexico's federal customer-protection court Profeco has established a special procedure to collect claims from passengers with valid tickets that were neither honoured for transport nor refunded after the airline was suspended from IATA's BSP settlement programme.

South Africa’s political opposition is urging the country’s finance minister, Tito Mboweni, to abandon the R10 billion ($680 million) funding plan to restructure South African Airways and plough the capital into a vaccination programme. The Democratic Alliance has written to Mboweni claiming that the government should “divert” the SAA allocation to procuring vaccines against the coronavirus outbreak. According to the Democratic Alliance the R10 billion funding package could acquire some 23 million doses of the vaccine, enough for 40% of the country’s population. It has accused the main governing party, the ANC, of “skewed” fiscal priorities, claiming that the vaccine funding has come from the Solidarity Fund – a rapid-response organisation established to combat the pandemic, funded by donations which have amounted to some R3.2 billion. “Why is the ANC choosing an airline for the elite over a vaccine for the many?” the opposition queries, adding that it has also written to parliament’s appropriations committee asking for public hearings on whether South African citizens want the SAA budget reallocated. South African health minister Zweli Mkhize stated on 28 December, in reference to the effort to combat the pandemic, that “the problem in [South Africa] is that we have constraints in terms of financial resources” – a comment upon which the Democratic Alliance has seized to underline its point about SAA funding. While the government is still intending to press ahead with a restructuring of SAA in 2021, it has been attempting to resolve conflict among unions over unpaid salaries as well as a dispute with cockpit-crew representatives over conditions of employment in the new carrier. The South African department of public enterprises has stated that it cannot accept the “financial burden” of the pilot association’s three-decade-old regulating agreement, because there is a need to reduce cost structures in order to launch a reshaped SAA. It says the regulating agreement served to “preserve undeserved privileges accrued through unjust laws” which restricted aviation careers to a “small minority”, adding that it is “unconstitutional and unlawful and should be terminated”. Discussions over the situation failed to result in an agreement during December, prompting a lockout of the pilots. Pilots union SAAPA – along with the cabin-crew union SACCA and metalworkers’ union NUMSA – declined to accept a recent offer to pay three months’ worth of deferred salaries to SAA workers, which was taken up by a number of other unions at the company.