Prepare Yourselves… 2025 AEs
#971
I'm no international trade lawyer, I just just repeating what Ed said about not paying any tariffs. I was just throwing out what I think are ways around tariffs.
We got around some tariffs last time (I believe the A330s were flown to Japan first, then the US, getting around Trump(v1) tariffs that were imposed back then, but I could be wrong). In the end, Delta isn't going to pay a fairly large percent extra for airplanes. It would raise the capital cost of new airplanes and skewer their international cost structure. You can't just walk into the Boeing store and buy some B-787s or 777 instead. I would suspect that when Delta goes to the administration and says "we'd love to grow and hire more people but we can't when the airplanes cost 10% more. Sure would be unfortunate if we announced we're furloughing people because airplanes are too expensive...." that some carve-out or something will be figured out.
We got around some tariffs last time (I believe the A330s were flown to Japan first, then the US, getting around Trump(v1) tariffs that were imposed back then, but I could be wrong). In the end, Delta isn't going to pay a fairly large percent extra for airplanes. It would raise the capital cost of new airplanes and skewer their international cost structure. You can't just walk into the Boeing store and buy some B-787s or 777 instead. I would suspect that when Delta goes to the administration and says "we'd love to grow and hire more people but we can't when the airplanes cost 10% more. Sure would be unfortunate if we announced we're furloughing people because airplanes are too expensive...." that some carve-out or something will be figured out.
Here’s how Delta Air Lines is avoiding the Trump administration’s tariffs on new Airbus jets manufactured in Europe: they aren’t importing them.
The planes fly from Toulouse, France to somewhere other than the United States, like Tokyo, so that when they come here to the States they aren’t ‘new’.
And what they’ve done in the past is have the aircraft fly only internationally, landing in the U.S. and then leaving, so that they aren’t ‘imported’.
There is currently a 10% tariff in place on imports, including Airbus jets manufactured in Europe. There is an announced 90-day pause on so-called reciprocal tariffs (that are calculated based on trade deficits) that would impose a 20% levy on products from the European Union.
One Mile at a Time writes that Delta used the same strategy during the first Trump administration when similar tariffs were put in place.Aviation watchdog JonNYC flagged that Delta is taking delivery of a new Airbus A350-900 widebody (registration N528DN) that was manufactured in Toulouse, France. The plane will fly to Tokyo Narita prior to entering service.
https://www.flightaware.com/live/flight/N528DN
They are also taking delivery of an Airbus A220 manufactured at the Mirabel facility in Quebec, Canada, about 45 minutes outside of Montreal.
It’s not hard to keep a widebody aircraft flying only internationally, though airlines will often reposition planes between U.S. hubs by operating a domestic flight. That may not be possible at this time for Delta. It is tougher to do it with a narrowbody like an A220, but flying between destinations in Canada, Mexico and the Caribbean into and back out of Delta hubs is doable. The more planes that have to be handled this way, the tougher it gets.
Tracking restrictions on aircraft poses all sorts of challenges. Several years ago, American Airlines improperly flew a non-ETOPS certified Airbus A321 to Hawaii. Legacy US Airways hadn’t invested in a required raft, so while the aircraft’s range was fine it wasn’t permitted to fly overwater for significant lengths of time. At scale, it becomes increasingly complex to keep fleets segregated as required by this strategy.
Earlier this month Delta CEO Ed Bastian was asked about tariffs on new aircraft and he was unequivocal that they wouldn’t be paying the tariffs. This was interpreted to mean either that Airbus would pick up the cost, or that deliveries would be deferred.
Obviously in this environment, we are going to work very closely with Airbus, which is the only airline we’ve got deliveries coming from for the balance of this year. And they’ve been a great partner. We’ll do our very best to see what we have to do to minimize tariffs. But the one thing that you need to know we are very clear on is that we will not be paying tariffs on any aircraft deliveries we take.
https://viewfromthewing.com/delta-be...ing-duty-free/
#972
Line Holder
Joined: Jul 2023
Posts: 851
Likes: 176
Why would the administration make an exemption for a foreign company to sell their products in the US when there is already a domestic alternative (Boeing). That makes no sense. The tech exemption was meant for US companies (Apple, Google) where there is currently no domestic produced alternative.
#975
Gets Weekends Off
Joined: Jan 2014
Posts: 2,286
Likes: 18
#976
It's the cliche "if it benefits others it is bad, but once it hits close to home I'm all for it" mindset of lotta these folks.
#977
Line Holder
Joined: Aug 2007
Posts: 241
Likes: 14
or worse, gives delta the justification to set up a flag of convenience in whatever poor country and start putting aircraft on it. Management tells APLA “we can just do this to accept the aircraft then move them over when crazy is done. If not no growth and we start up the meat grinder!” “Hey this isn’t our fault! We are just trying to do anything to get these birds flying for big D!”
#978
or worse, gives delta the justification to set up a flag of convenience in whatever poor country and start putting aircraft on it. Management tells APLA “we can just do this to accept the aircraft then move them over when crazy is done. If not no growth and we start up the meat grinder!” “Hey this isn’t our fault! We are just trying to do anything to get these birds flying for big D!”
#979
Line Holder
Joined: Aug 2007
Posts: 241
Likes: 14
Fly now grieve later…it’s just a document. They have and will violate any part of the PWA if it cost less to do so. 10+% on everything we have on order, including Boeing, most of those planes parts come from everywhere but here. I’m guessing it’s worth managements time and energy to become exceptionally creative and laser focused on a goal of saving money today and letting the courts decide who’s at fault seven years later. And even if we win the grievance, how much would the company have to pay….not even close to the 10% increase in cost of our order book I would bet.
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