Airlines are increasing capacity on Asia Pacific-North America routes as the disruptions from China’s Golden Week eases and preparations for the Christmas rush begin. The U.S. National Retail Federation (NRF) expects holiday spending to rise between 2.5% and 3.5% compared to last year, with e-commerce projected to grow between 8% and 9%, reaching $297.9 billion.

NRF President Matthew Shay said a strong job market and wage growth will support consumer spending, though recent hurricanes and five fewer shopping days this year could pose challenges and have an economic impact. NRF’s Chief economist, Jack Kleinhenz, remained optimistic. He said strong household finances was boosting consumer confidence for holiday spending.

Airlines are responding to demand, with Asia Pacific-North America capacity up 6% last week and Europe-bound capacity up 4%. Shanghai to North America saw a 17.5% capacity boost, while Hong Kong’s capacity increased by 11.7%. Cathay Pacific reported an 11% year-on-year rise in September volumes, driven by e-commerce, electronics, and perishables. Meanwhile, rates remain stable despite the added capacity. The TAC Index reported a 1.6% week-on-week rise in Hong Kong export rates and a 3.6% rise in Shanghai export rates.

The NRF cautions that new U.S. tariffs could raise household costs by over $4,000 under future policies. “Tariffs are paid by the importer and not the producing country, and that is passed on to the consumer. It’s a tax paid by the consumer,” Shay said.

Source: The Loadstar