Japan's ANA to Stick With Mexico Flight Plan Despite Trump Tariff Concerns


JANUARY 28, 2017

Tokyo. Japan's ANA Holdings  stuck with a plan on Friday (27/01) to begin daily flights to Mexico next month, but expressed concern that US tariffs on Mexican exports, as suggested by President Donald Trump, could dampen demand from business travelers.

"We will need to keep watch on what impact the new administration will have on the flow of people and goods," Yuji Hirako, the chief financial officer of Japan's biggest airline, said at a briefing after ANA released third-quarter earnings.

"If there is a serious policy shift to protectionism that will hurt the global economy, including us," he said.

Since Mexico, the United States and Canada implemented the North American Free Trade Agreement (Nafta) 23 years ago, Japanese automotive manufacturers, including Toyota Motor and Nissan Motor, along with their US and European rivals, have expanded production in Mexico, shipping much of the output to the US market.

The White House floated the idea on Thursday of a 20 percent tax on goods from Mexico to pay for a wall along the southern US border to prevent illegal crossings, after Mexican President Enrique Pena Nieto scrapped a planned trip to meet with Trump.

Tariffs could force carmakers to shift production to other sites and in doing so cut demand for business travel to Mexico.

ANA, which announced the start of direct flights to Mexico in May, has been considering starting the service since at least 2014, when business executives accompanied Japanese Prime Minister Shinzo Abe to Mexico to deepen economic ties.

ANA will begin flying a Boeing Co 787 Dreamliner between Tokyo and Mexico City from Feb. 15.