The burgeoning trade war between the US and Europe over steel and aluminium tariffs is raising concerns in the global aircraft leasing industry that tit for tat levies could spread to the booming aviation finance industry. Peter Barrett, CE of SMBC Aviation Capital, warned that the industry was entering new territory after the EU this week confirmed it planned to target E2.8b of US products in retaliation for the US decision to introduce levies on European steel and aluminium imports. “It is very hard to know what is going to happen,” said Barrett. “Aircraft are very visible and valuable traded items across world. If there is a trade war . . . will there be increased tariffs on bringing aircraft into countries? We are thinking about whether this might have an impact on the movement of aircraft around the world.” <br/>
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Jet fuel prices are at 6-year highs, and part of the reason is linked to record US shale crude production and the unique properties refiners contend with when they refine that oil. The US produced about 4.7m barrels per day of crude from shale formations in 2017. US refiners have been using more of that abundant oil to manufacture diesel, gasoline and jet fuel. Shale crude differs somewhat from oil from other formations. Refiners have found that when making diesel, their second-most common product after gasoline, they need to take measures to offset that waxiness to make the fuel usable for truck and car engines. One option is to add kerosene and other components commonly found in jet fuel. However, that reduces the available pool of jet fuel at a time when strong economic growth has boosted air travel. <br/>
Passengers whose onward connections outside Europe are delayed or cancelled can claim EU compensation, according to a landmark ruling. The European Court of Justice has ruled that a German passenger delayed on a connecting flight in Morocco should qualify for a E400 payout. In another blow to airlines, who feel the rules are unfairly slanted in favour of travellers, the ruling allows retrospective claims – in the case of England and Wales, for flights up to 6 years ago. The airline rejected the claim in the ruling, saying the change in aircraft for the connecting flight signalled a separate journey, and as it began outside the EU and was on a non-European airline no compensation was payable. The judges decided a change of aircraft has no impact on passengers’ right to claim. <br/>