Corporate America braces for impact

When US President Donald Trump signed an executive order preventing people from seven Muslim-majority countries from crossing US borders, the global airline industry was caught by surprise. 

Peter Morris, chief economist at aviation consultancy Flightglobal, forecasts what other aviation shocks could be in store under the new US administration.

“Anything that pushes up costs or raises the level of inconvenience, or reduces the level of travel, and you get two effects then. One of which is the effect that you end up suppressing a certain level of travel and the other element is diversion. For example, for Iranian students thinking of studying in the US, they may consider that Germany may be a better bet now, so all that money they would’ve spent on education and on travel will be diverted from one market to another and other parts of the market will disappear because people can’t travel. And the net impact on the airlines is they end up with fewer people travelling, thus their profitability will decline,” says Morris.

Also on this episode of Counting the Cost:

Ultra long-haul travel: Could 2017 be the year of jet lag like you’ve never experienced before? On Tuesday, Qatar Airways will fly non-stop to New Zealand’s largest city. At 14,539km, the new Doha to Auckland link will take the prize for world’s longest flight. “I think there’s a challenge just in terms of the actual product that’s delivered, because if you end up at the other end of the world after 17 hours and you’re not fit for anything for 2-3 days. It’s perhaps questionable as to how successful of a business model that is. Technically, it’s a big achievement, but the actual either economics or the product experience of it is really rather challenging,” says Morris.

Tech’s Trump play: President Trump’s order banning immigrants from seven predominantly Muslim countries from entering the US began hitting the tech industry this week, with Google’s CEO leading a growing list of tech executives condemning the ban. The CEOs of Microsoft, Apple, Netflix, Uber, Airbnb and Tesla Motors denounced the policy, which would affect their own employees working in the US legally, as well as their competitive quest for talent.

Mike Grandinetti, corporate strategy officer for Reduxio, talks about the anxiety surrounding the ban. “There’s still a tremendous amount of uncertainty over what might happen with the H1 visa, they’ve hinted at changes but haven’t laid out specifics. The tech industry has to move forward at internet speed, we’ve gotta move forward with a sense of conviction and purpose and the uncertainty alone causes a lot of anxiety and it really begins to slow down the system. So, whether you’re a non-US passport carrying engineer or scientist or computer programmer, and you’re now thinking about your future, you’re not quite sure what’s gonna happen, and as a result of that, you may be more inclined to go back to your home region where you feel at least you’ll have a sense of certainty about what you may be able to do professionally in the long term … so there’s such a level of anxiety amongst those who want to stay in the states, want to work in the valley or other tech clusters, but aren’t quite sure of whether they’ll be able to and are starting to plan an alternative future for themselves. That just slows down everything and our ability to hire,” says Grandinetti.

France and Frexit: The world has seen a shake-up in the French presidential race. Philippe Waechter, head of economic research with Paris-based Natixis Asset Management, discusses where the candidates stand on the economy and whether a Frexit is in the cards. Natacha Butler reports from Paris.

Citrus Squeeze: President Trump has been putting a squeeze on the citrus industry. Teresa Bo reports on how he’s souring relations with Argentina’s lemon growers.