US airlines get boost from ‘Trump Bump’ but protectionist rhetoric creates long term uncertainty

The mystifying rise of now-US President Donald Trump is full of paradoxes. He embarked on his presidency with one of the lowest approval ratings in recent history, yet after his election victory markets were buoyed by a significant "Trump Bump", carried by his promises of tax cuts, less regulation and an increased focus on revamping the nation's infrastructure.

US airlines benefitted from the Trump Bump with a rally in corporate travel at YE2016, which helped many of those companies deliver a better than expected unit revenue performance that will propel them into positive territory for 1H2017.

However, the Trump Bump could be tempered by his continued protectionist remarks and the pace with which he delivers on his pro-business campaign promises.The uncertainty could create a certain level of volatility for US airlines as they work toward restoring business yields. But for now they believe the momentum in corporate demand and yields should continue into the foreseeable future.