Delta skirts tariffs on Airbus A350 delivery to Japan
- Delta Air Lines will avoid import tariffs by delivering a new Airbus A350 to Japan instead of the U.S.
- The airline's CEO Ed Bastian highlighted the importance of minimizing costs associated with tariffs during their recent earnings call.
- This strategy underscores the ongoing challenges the aviation industry faces due to trade tensions and tariffs.
In France, Delta Air Lines took delivery of a new Airbus A350 aircraft, tail number N528DN, on May 1, 2025. To evade potential tariffs, the flight will travel directly from the factory in Toulouse to Tokyo, Japan. This strategic move allows Delta to keep the aircraft classified as new and avoid the associated import tariffs by not landing in the United States. Delta has previously used this tactic during the Trump administration to bypass similar tariffs on aircraft deliveries, highlighting the ongoing trade tensions affecting the airline industry. The president of Delta Airlines, Ed Bastian, emphasized the importance of minimizing tariff costs during a recent earnings call. He stated that the airline is exclusively working with Airbus for the remainder of the year and has been coordinating closely to avoid financial burdens caused by tariffs, particularly in the wake of the impact from the COVID-19 pandemic. Bastian articulated concerns regarding the added costs of potentially 20% on aircraft, indicating that this could complicate the airline's financial planning. The aviation industry, still recovering from the pandemic, has faced challenges due to U.S. tariffs affecting international travel and airline profitability. Delta’s President, Glenn William Haustein, noted a significant drop in bookings from Canada, indicating that the ongoing trade war has negatively impacted the competitive landscape for airlines. He suggested a possible reduction in capacity for routes to Canada and Mexico as the airline navigates changing demand. As a response to the tariffs, U.S. airlines have been lobbying for a return to the tariff-free conditions previously enjoyed under the 1979 Civil Aircraft Agreement. Leaders from various airlines are working with government affairs teams to advocate for policies that would level the playing field, emphasizing that tariff costs create economic challenges for the aviation sector. American Airlines' CFO, Devon May, reiterated this point, arguing that maintaining a competitive environment is vital for sustainable growth in the airline industry.