How Trump could change CX and corporate America

The chief executive officers of some of the biggest airlines in the United States have stated their support for the incoming Trump administration following the US election earlier in November.

The CEOs of Delta, American, United and Southwest airlines have all publicly commented on their hopes for the aviation industry under the new government. Their comments follow a series of new measures from President Biden’s administration, intended to enhance consumer protections and infrastructure investment.

Some airline bosses explicitly stated their hopes that Biden’s regulatory measures and consumer protections will be rolled back, while others struck a congratulatory tone as they reinforced the need for further investment in infrastructure.

However, while the CEOs believe the new administration will be good for business, the evidence suggests it might not be so good for customer experience.

How president Biden changed aviation for passengers and airlines

Under the outgoing Biden-Harris administration, several major regulatory and customer-focused changes were introduced, from Biden’s 2021 infrastructure investment package to the 2024 extension of airline safety standards and passenger rights.

Some of the biggest changes signed into law in May 2024 included:

• Funding for airport improvements: New, unprecedented funding of US$25 billion over five years was committed to improve, repair and expand airports across America.
• Automatic customer refunds: New rules were introduced to automatically refund passengers in the original form of payment when their flight is canceled or significantly changed and they either no longer wish to travel, or have changed plans as a result. Refunds are also now required when extra services such as Wifi are not provided.
• Higher penalties for consumer violations: Biden raised the maximum civil penalty for airline consumer violations from $25,000 per violation to $75,000.

However, new rules around the transparency of flight change and baggage fees are on hold after airlines challenged it in court. Originally, these rules stated airlines must be transparent to allow customers to understand the true cost of their travel, including whether seat selection costs are included. The US Department of Transportation (DOT) is currently pursuing additional rules that would ban family seating fees and guarantee parents can sit with their children for no extra charge when they fly.

What airline bosses in the US have said about Trump

Ed Bastian CEO of Delta Airlines has said the change of government will be a “breath of fresh air” following the “overreach” of President Biden’s administration. During an investor day in Atlanta, Georgia, Bastian said Trump has promised “to take a fresh look at the regulatory environment, the bureaucracy that exists in government, the level of overreach that we have seen over the last four years within our industry. I think that will be a breath of fresh air.”

Meanwhile, Robert Jordan, CEO of Southwest Airlines, said: “I think there is a general thought that the new administration could be a little more business-friendly. We are hopeful for a Department of Transportation that is maybe a little less aggressive in terms of regulating or rule making.”

The CEO of United Airlines, Scott Kirby, congratulated Trump via open letter, but reinforced the need to deliver on the infrastructure investments promised under the Biden administration.
Kirby wrote: “As your focus turns to policies and personnel, I ask you to consider the role the federal government plays in realizing this vision for economic growth.

For example, urgent improvements to the nation’s air traffic control infrastructure (including investments in people, facilities and technology) are central to enabling, instead of hindering, economic growth and customer service delivery. We at United stand ready to help you and your team achieve this success.”

Speaking at the Skift Aviation Forum in Dallas, American Airlines CEO Robert Isom, expressed hope that Trump’s second administration would be as supportive of the airline industry as the first.

Consumer rights under Biden

The outgoing US government introduced a raft of pro-consumer measures intended to protect consumer rights and ensure businesses are operating fairly.

This included the Federal Trade Commission’s “click to cancel” rule, which requires all companies selling products and services on a subscription basis to make it “as easy to cancel as it was to sign up”.

As CX Network reported, the final rule banned sellers from:

• Misrepresenting any material fact made while marketing goods or services with a negative option feature;
• Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
• Failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer; and
• Failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.

How Trump could impact CX in retail

Neil Saunders, MD for the retail analysis division at GlobalData, said a second Trump presidency brings “a mixed bag of positives and negatives” for retail.

“The main positive for retail is that President Trump will almost certainly renew the tax cut package he introduced during his first term in 2017, which was due to expire at the end of 2025,” he elaborated. “This will be broadly helpful to consumer incomes, although retailers should not expect to see a surge in spending as it is about rolling over an existing policy that is already baked into consumer behavior.”

Retail spending could also be boosted by general tax cuts, which will put more money into consumers’ pockets. Corporation tax could also be reduced to 15 percent, which could “facilitate retail investment,” Saunders projected. However, Trump’s proposed tariffs – as much as 60 percent on goods from China and 10-20 percent on other countries – could wipe out these potential savings for retailers, with Chinese retailers such as Temu and Shein significantly worse off. Amazon would also be hit as much of its stock is manufactured in China.

However, this is one area where Trump and Biden’s policies could align: Biden has worked to close the tax loophole that allows Chinese ecommerce retailers to sell goods to US consumers tax-free and Trump is likely to continue this work. Saunders said the proposed tariffs still mark a “huge downside for retail” and that although they would take time to implement, they would “create an enormous headache and add significant additional cost”.

He continued: “Despite Trump’s assertions to the contrary, tariffs are paid by the companies or entities importing goods and not by the countries themselves. This means the cost of buying products from overseas, whether directly or as an input for manufacturing, would rise sharply.”

The bottom line is that retailers would have to choose between “taking a massive hit on profits or being forced to put up prices”, Saunders said. The latter option, obviously, would potentially impact inflation.

The merger and acquisition (M&A) landscape could see changes. The Federal Trade Commission (FTC) blocked the proposed Tapestry-Capri merger in late October 2024 and said the Kroger-Albertsons merger would “eliminate competition and raise grocery prices for millions of Americans, while harming tens of thousands of workers”. Saunders said the FTC’s “hostile approach” to mergers and acquisitions will “almost certainly be reset and replaced with a worldview that is more favorable to corporate dealmaking”.

Saunders concluded: “Despite the shock change, it should be noted that changes happen at the margins and occur over time. A second Trump administration will not collapse retail, nor will it propel it to dizzy heights. It will simply change the gradient of the growth trajectory, and the tonality of the policies retailers need to deal with.”

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