Delta’s creative tariff dodge: Leave the fancy new jet, bring home the guts
While tariffs threaten to whittle away profits for many businesses, those costs aren’t subtle when they’re tacked onto the price tag of an airplane.
In an effort to preserve its bottom line, Delta Air Lines is getting creative. The Atlanta-based company has been pulling engines off new Airbus jets in Europe and bringing them stateside to get grounded U.S. planes up and flying—without paying costs associated with importing new planes and parts.
Bloomberg reports that the company has a new practice of removing some U.S.-made Pratt & Whitney engines from new Airbus A321neo jets that were constructed in Europe and sending them to the U.S. in order to avoid import tariffs. Delta is then installing the engines on some of its older A320neo jets that aren’t currently flying due to engine problems.
Because Delta is reportedly waiting for regulators to give its new set of jets the green light, the engine swapping doesn’t mean grounding Europe-based planes that would otherwise be flying.
Along with Boeing, Airbus is one of the two largest manufacturers of commercial aircraft in the world. Unlike U.S.-based Boeing, Airbus was founded in Europe and is co-owned by the governments of France, Germany, and Spain, among other investors.
Under President Trump’s current tariff rules, European-built aircraft incur a 10% tariff when imported into the U.S. Because airlines regularly pay Airbus and Boeing billions to bolster their fleets with modern jets, even a small percentage of additional cost stands to zap the airline industry’s already notoriously thin margins.
For Delta, one of the largest airlines in the U.S., coming to peace with trade chaos and paying Trump’s tariffs isn’t on the flight plan. “We will not be paying tariffs on any aircraft deliveries,” Delta CEO Ed Bastian said in an April earnings call. “These times are pretty uncertain, and if you start to put a 20% incremental cost on top of an aircraft, it gets very difficult to make that math work.”