Delta Makes Major Announcement After Tariff Concerns
Delta Airlines is taking a big step amid tariff concerns.
"We will not pay tariffs on any deliveries we take," Delta Chief Executive Ed Bastian told The Wall Street Journal. "We will defer any deliveries that have a tariff on it."
He told financial analysts a similar thing, according to Reuters.
"The one thing that you need to know we're very clear on is that we will not be paying tariffs on any aircraft deliveries," Bastian said. "We've been clear with Airbus on that, and we'll work through and see what happens."
According to Reuters, Delta is expecting a new passenger jet in June from a Canadian company, but it's not clear whether it will be subjected to tariffs. However, despite a 25% tariff threat on Canada, so far Canada has been exempted from tariffs.
It was also believed the new jet complied with a 2020 agreement making it exempt from tariffs, but the recent tariff wars have caused uncertainty and confusion for the airline, Reuters reported, noting that the cost is not insubstantial as the jet's pricetag is $40.5 million.
According to CNBC, Delta also announced that it won't expand flying "in the second half of the year because of disappointing bookings."
“In the last six weeks, we’ve seen a corresponding reduction in broad consumer confidence and corporate confidence,” Bastian told CNBC.
He also told CNBC that "main cabin bookings are weaker than previously expected."
According to CNBC, Delta is the most profitable airline in the United States.
“With broad economic uncertainty around global trade, growth has largely stalled,” Bastian said in an earning release, according to CNBC. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.”