Irish aviation firm warns airline passengers will face higher fares due to US tariffs
The firm specialises in short-term leasing of aircraft and crew to airlines, which typically use Avia to boost capacity during busy seasons.
It is carrying out a 'stress test' by calculating 12% higher costs on maintenance services across its fleet, chairman Gediminas Ziemelis said in an interview.
Avia is exploring ways to access more spare parts from Europe if tariffs drive up the cost of imported products like engine components, he said.
His comments shed more light on how the aviation industry — which has mostly been shielded from tariffs in the past — is contending with uncertainty caused by US president Donald Trump's bid to rewrite the rules of global trade.
'It's a mess,' Ziemelis said. 'If you don't know the size of the disaster or problem then it's very difficult to forecast.'
Trump has placed tariffs of 10% on goods coming into America from dozens of countries including the EU, and hit other nations with higher rates.
The fee is set to rise to 20% on EU manufacturers sending products the US if a 90-day pause expires without a deal — raising the prospect of retaliatory EU tariffs on US-made goods.
Others in the industry are nervous about uncertainty around the aviation supply chain, Ziemelis said. Airlines cannot swallow additional costs if they do not increase their ticket prices, so ultimately any added fees will be borne by passengers, he said.
'If prices go above what the consumer is willing to pay, of course it can slow down traffic and number of the passengers overall,' he said.
Others are also preparing for disruption. Delta Air Lines has said it will not pay tariffs on planes from French manufacturer Airbus SE, while Ireland's Ryanair Holdings has said it may delay aircraft deliveries from Boeing should the EU retaliate.
So far, the tariff war has hit airlines hardest in China, where reciprocal levies have more than doubled the price of Boeing products, and any parts coming into the US from the Asian nation also cost more than twice as much.
Bloomberg News reported Beijing told Chinese carriers not to accept delivery of any more Boeing aircraft and asked them not to buy US-made aircraft parts.
There is also evidence the tariff talk has rattled travellers and slowed demand across the lucrative transatlantic route.
Dublin-based Avia placed an order late last year for 80 Boeing 737 Max jets to add into its fleet of 220 aircraft. The company plans to grow the fleet to 700 planes by the end of the decade.
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Tariffs fallout sees jet bound for Chinese airline sent back to Boeing
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Irish Examiner
3 hours ago
- Irish Examiner
Trump's global tariff agenda puts Ireland's pharmaceutical industry at serious risk
The whole world is in thrall to the whims of Donald Trump's tariff agenda, as it has been since the 47th president of the United States' swearing-in last January. We've learned a few uncomfortable truths along the way. Much of the early outcry from America's allies and trading partners surrounded the lack of economic logic to the imposition of tariffs – which are effectively a tax for Americans on foreign products, in theory making them less attractive to US consumers and heightening the allure of their own domestic suppliers. Critics said that the new regime would disrupt the world economy needlessly and perhaps bring about a global recession. That may well come to pass. The problem is that in this stand-off America has the greater wherewithal in terms of raw economic power. It holds the cards as Trump himself might say. And nations worldwide are beginning to fall into line, the EU just the latest after agreeing to a blanket 15% tariff on goods and services going forward. After President of the European Commission Ursula von der Leyen and US President Donald Trump agreed the trade deal, the spin is that the pain of those tariffs is worth it in order to avoid a global trade war. Also, 15% is better than 30% or worse, is the thinking. Photo:The spin is that the pain of those tariffs is worth it in order to avoid a global trade war. Also, 15% is better than 30% or worse, is the thinking. Whether that represents capitulation in the face of bullyboy tactics, given that little or nothing has been asked of the US in return, is a separate conversation. Ireland's pharmaceutical industry Here in Ireland we have a bigger problem though, and that problem is the pharmaceutical industry. That industry contributes massively to the economy here via billions of euro in corporation tax contributions, with about 90 companies employing 50,000 people in highly-paid roles. A total 30,000 of those jobs are with American firms. Should foreign pharmaceutical concerns exit Ireland the impact on the country would be catastrophic. The industry globally had pleaded with Trump for it to be exempted from any tariff regime, ostensibly for altruistic reasons – that lifesaving medicines shouldn't be subject to capricious taxation. At an EU level, the industry asked that the bloc not apply reciprocal tariffs, one wish that has at least been granted. Pfizer is one of the massive American pharmaceutical companies holding bases in Ireland, in this case Cork. File picture: Dan Linehan Oddly enough, in Trump's world of permanent grievance where everyone has been making a sucker of the United States for decades, the outsize presence the US pharmaceutical industry holds in Ireland is one situation on which he indisputably has a legitimate point. Drug prices in the US can retail for as much as five times what an EU citizen would pay. Meanwhile, American pharma firms make a pretty penny avoiding American tax by basing themselves here. Trump's protectionist agenda demands that those jobs and companies should return home. The Government has been worrying about and planning for a worst-case scenario in terms of tariffs on pharmaceuticals for months. Reaction from the pharma companies But what of the pharma industry itself? The official line from the Irish Pharmaceutical Healthcare Association (IPHA), the industry's lobby group here, is that it is reviewing the announcements coming out of Washington as and when they happen 'as key implications for the pharmaceutical sector remain uncertain'. A stance it's hard to argue with given the whole world has grown used to the haphazard nature of the Trump administration's demands. The European Federation of Pharmaceutical Industries and Associations (EFPIA) notes that tariffs are 'a blunt instrument that will disrupt supply chains, impact on investment in research and development, and ultimately harm patient access to medicines on both sides of the Atlantic'. It added that if the goal is to rebalance trade and ensure a 'fairer distribution' of how pharmaceutical innovation is financed, then 'there are more effective means than tariffs that would help'. Impact on pharma in Ireland The IDA, the body with prime responsibility for attracting foreign investment to Irish shores, says of the pharma implications that it 'welcomes' the deal made between Europe and the US, arguing it provides 'much-needed certainty for Irish, European and American businesses who together represent the most integrated trading relationship in the world'. 'We are very much reliant (on the US market), there's no arguing with that,' says one industry insider. Last year a massive €44bn in pharmaceutical products were exported directly from Ireland to the US. 'But when you stand back €100bn was exported globally. So half went to America, but it's not like all business went there, though it is certainly the biggest partner,' says the source. That doesn't mean that those massive American companies holding bases here – MSD, Pfizer, ELI Lilly, Johnson and Johnson etc – are about to up sticks on the back of the new tariff regime. 'They are not going to leave today or tomorrow, no. But it could definitely impact future investment decisions,' the source says. One of the problems is that a great deal of uncertainty still surrounds the 15% tariff agreement, particularly with regard to pharma. One of the Eli Lilly production buildings at its state-of-the-art facility in Dunderrow, Kinsale, Co Cork. For starters, most people concerned thought that the pharmaceutical industry wasn't to be included in the deal. Then about two hours after the deal was agreed European Commission president Ursula von der Leyen said it would be included, a point Trump appeared to back up. The following day the White House produced a 'fact sheet' describing how the new regime would work, and affirming the 15% rate for pharma. Except that the same sheet stated that the European Union would pay the tariff – which isn't how tariffs work. Then there is the Section 232 investigation which the US Department of Commerce initiated into the pharma industry in April – aiming to establish if how the pharmaceutical system worldwide currently functions impacts negatively on the US from a national security standpoint. Should the answer arrived at be a 'yes', then additional tariffs on pharma may well follow (such investigations typically take a minimum of six months to conclude, so we'll probably get an answer sometime towards the end of the year). 'Pharma plans in the long-term,' says Aidan Meagher, tax partner specialising in life sciences with consultants EY, noting that most pharma manufacturers will have been planning for this scenario for months and will have frontloaded stock into the American market, thus negating immediate impacts in the near term. He says that companies will be likely looking at 'dual sourcing' initiatives, supplying the American market from within the US itself and using Irish operations for its trade around the rest of the globe. 'Ireland needs to up its game' But Meagher says that it would be 'remiss' of Ireland, and the pharma industry here, to take a 'wait and see' approach, perhaps with the supposition that Trump's policies will last for the remaining three-and-a-half years of his term, and no longer. 'It is all about the next investment. A lot of these drugs only have patent protection for a certain life or longevity. Ireland needs to maintain investment and to incentivise the right kind of activity in terms of attracting that innovation,' he says. That means thinking outside the box in terms of tax credits for research and development, and improvements to infrastructure, particularly housing, Meagher says, areas in which we are notably lagging behind in terms of international competition. But he argues that the situation is far from a doomsday scenario. 'It's not as simple as that, it's a whole range of business factors that need to be considered – it's all about impacts for specific companies,' he says. 'It's not all necessarily doom and gloom. Companies have had plenty of time to consider this. And pharma companies are long-term thinkers. Ireland has had just two issues with the FDA (the US food and drug administration, responsible for approving new drugs) in its history. "The country has a strong reputation. These countries have invested significantly and Ireland is the owner of a lot of valuable intellectual property.' But it's certainly not a time to be complacent, Meagher argues. 'We have dropped down the competitiveness radar, and our competitors now aren't in the EU – they're in Switzerland, Singapore and the US itself. We need to be a top competitor for inward investment, and R&D and infrastructure will be critical. That is where Ireland needs to up its game.'
Irish Times
4 hours ago
- Irish Times
Data credibility fears fuelled after Trump orders firing of labour official
Sharp downward revisions to jobs data on Friday, followed by Donald Trump 's sudden order to fire the head of the Bureau of Labor Statistics , stoked investor fears about the integrity of economic data and the Fed's ability to read the true state of the US economy. News of a surprise weakening in the US labour market last month jolted investors, while revisions to job figures for the past two months raised worries the US central bank may have been flying blind in recent months and may need to play catch-up with interest rate cuts, investors said. Fed governor Adriana Kugler's early resignation from her term on Friday also potentially shakes up what was already a fractious succession process for Fed leadership amid difficult relations with Mr Trump. The US president on Friday renewed his call for Federal Reserve chair Jerome Powell to resign. 'Powell should resign, just like Adriana Kugler, a Biden Appointee, resigned,' Mr Trump said in a post on Truth Social. READ MORE 'Kugler's resignation allows the president to further shape the FOMC [Federal Open Market Committee] in his own image,' said Jamie Cox, managing partner at Harris Financial Group. Nonfarm payrolls increased by 73,000 jobs in July after rising by a downwardly revised 14,000 in June, the Labor Department's Bureau of Labor Statistics said in its employment report on Friday. Economists polled by Reuters had forecast payrolls increasing by 110,000 jobs after rising by a previously reported 147,000 in June. The report comes two days after the US central bank left unchanged its benchmark interest rate and avoided signalling imminent rate cuts, dialling back market expectations for an easing at the next policy meeting in September. That changed dramatically on Friday, with odds for a 25 basis point cut in September jumping to about 81 per cent after the data from 38 per cent on Thursday, according to CME Group data. 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'Firing the head of BLS is not going to improve data collection and dissemination ... it's going to undermine confidence in the data going forward,' he said. Revisions for May and June came in well above the norm, the Bureau of Labor Statistics said. It gave no reason for the revised data but noted that 'monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.' May's nonfarm payroll gain was slashed by 125,000, from 144,000 to just 19,000, while June's downward revision was by 133,000. In total, employment over the two months is now 258,000 lower than initially reported. 'It is painfully obvious that the US government has an improper model for payroll calculations,' said Michael Green, portfolio manager at Simplify Asset Management. 'If you don't have reliable data, you make bad policy.' Spencer Hakimian, founder of macro hedge fund Tolou Capital Management, said lay-offs across several government departments, part of Mr Trump's plans to reduce wasteful government spending, have prompted him to rely more heavily on alternative measures of economic strength than just government data, such as credit card data, and data from Truflation, an independent inflation index alternative to official government inflation measures. Mr Powell said in a press conference on Wednesday the labour market remained strong, and that the central bank was still in the early stages of grasping how Mr Trump's overhaul of import taxes and other policy shifts would play out for inflation, employment and economic growth. 'Had those figures been the initial prints a month or two ago it would have significantly changed the labour market narrative over the entire summer,' said Adam Hetts, global head of multi-asset and portfolio manager at Janus Henderson Investors, in a note. Treasury yields, which move inversely to bond prices, dropped on Friday, with benchmark 10-year yields down by a whopping 15 basis points to 4.22 per cent – their biggest daily drop since April. Two-year yields were down by about 25 basis points to 3.69 per cent, registering their biggest daily decline since August last year. Stocks declined too, also weighed on by Mr Trump's latest tariffs salvo. The benchmark S&P 500 index lost 1.6 per cent, bringing stocks to their lowest since early July. The deterioration in the labour picture comes amid steep US tariffs on large trade partners that – while not as high as feared earlier this year – are still largely expected to worsen inflation and slow economic activity. (c) Copyright Thomson Reuters 2025
The 42
5 hours ago
- The 42
Thurles racecourse announces closure with immediate effect
THURLES RACECOURSE HAS closed with immediate effect and fixtures which had been scheduled for later in the year will not go ahead. The first ever recorded race-meeting at Thurles took place in 1732 and it has been in the hands of the Molony family since the early 1900s. Riona Molony announced the closure in a statement this morning. She thanked the 'extended racecourse family', such as staff, sponsors, the racing community, local businesses, and racegoers for their support. 'It has been an honour and a privilege for our family to have run Thurles Racecourse, and I am officially announcing our retirement today,' said Riona Molony. She said she is 'very proud of the immense contribution our family has made to racing' and remarked that 'horse-racing is part of the fabric of our family'. Advertisement 'My family and I look forward to going racing with you again, as spectators,' she added. The parade ring at Thurles Racecourse Alamy Stock Photo Alamy Stock Photo Her late husband Pierce Molony, who died in 2015, took over the running of the Co Tipperary racecourse from his father Dr Paddy Molony in 1974. 'Since my beloved husband Pierce passed away, with the help of our four daughters Patricia, Helen, Ann Marie and Kate and our wonderful staff, we've managed to keep the show on the road and I know he would be very proud of us for that,' said Riona. She added: 'The girls all have their own families, careers and lives to live. 'Ever increasing industry demands and the cost of doing business has also been a major factor.' Thurles Racecourse is fully licenced to race until 31 December and has 11 prominent fixtures scheduled for the 2025/26 racing calendar. However, these meetings will not go ahead. Riona added: 'We're going to enjoy this time together and relax now the decision is made and the news is out before we consider our options.' 'Surprise to everyone in the industry' The CEO of Horse Racing Ireland, Suzanne Eade, described Thurles Racecourse as a 'cornerstone of the National Hunt programme in Ireland during the winter months'. She said today's announcement 'was a surprise to everyone in the industry'. However, she added that the announcement must have been a 'hugely difficult one' and that she 'respects their decision to take a step back from running racing at Thurles'. Eade remarked that Pierce Molony 'contributed significantly to the Irish racing industry for many years and the Molony family, led by Riona, certainly stepped up following his untimely passing' The Horse Racing Ireland CEO added that she will be seeking a meeting with the Molony family in the near future to discuss their position.
