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Airlines queue up to buy Made-in-USA Airbus jets to avoid US tariffs

AMERICAN airlines that fly Airbus planes have been asking that their planes come from Airbus's sole US plant, in Mobile, Alabama, to avoid tariffs that would apply had they had been imported from Europe

Airlines queue up to buy Made-in-USA Airbus jets to avoid US tariffs

AMERICAN airlines that fly Airbus planes have been asking that their planes come from Airbus's sole US plant, in Mobile, Alabama, to avoid tariffs that would apply had they had been imported from Europe

23 December 2019 - 19:06

AMERICAN airlines that fly Airbus planes have been asking that their planes come from Airbus's sole US plant, in Mobile, Alabama, to avoid tariffs that would apply had they had been imported from Europe.

But the Mobile plant can only make six A320s a month next year and that's not enough to satisfy the robust demand, which includes pending orders from a half dozen US carriers, reports Bloomberg.



Carriers including Delta, Airbus's biggest customer, are trying to find a way around this expensive hurdle, negotiating with Airbus to mitigate the tariff burden for any planes built outside the US.



'We do not believe any responsibility for the tariffs belong to Delta,' said the airline's CEO, Ed Bastia. 'We're working collaboratively with Airbus to make that happen.'



Mr Bastia said Delta will need to get some of its new planes from Europe - which includes A330neo and A350 widebodies next year - but Delta 'is not expecting to pay those costs'.



Airbus may absorb the cost, say Bank of America analysts in an October note. A 10 per cent duty, paid by an Airbus buyer, is US$4.5 million to $5.5 million per aircraft, the analysts estimated. Airbus charged $110.6 million for an A320neo and $129.5 million for an A321neo in 2018, according to its 2018 price sheet, the latest data Airbus published.



'US tariffs don't stand to benefit Boeing because of the European Union threat of large tariffs on Boeing's exports to Europe. Boeing is far more dependent on jet exports to Europe than Airbus is on exports to the US,' Teal Group analyst Richard Aboulafia wrote in a blog post.


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