Airbus SE announced that it will not cover the cost of tariffs on its planes imported by US airlines. According to Bloomberg, the move will clash with carriers unwilling to shoulder charges imposed by US President Donald Trump.
Airbus Chief Executive Officer Guillaume Faury said on a conference call after reporting first-quarter results that the European planemaker is responsible for added duties on supplies it imports to its aircraft assembly plant in Mobile, Alabama, and then sells to customers. “However, when we are exporting from Europe to the US, that’s an import for the customers,” Faury said.
“They’re also unwilling to pay tariffs, but it’s on them.” The remarks show how the aviation industry is scrambling to adjust to new fees filtering through an aerospace supply chain shielded from tariffs for decades. Faury said Airbus is working to mitigate the surcharges, though the process has strained a fragile system that already relies on the free flow of thousands of components across borders.
Airbus refuses to cover tariff costs; here’s why
“I can tell you that the Airbus perspective is that they are not good for us and for the European industry, but they are not good as well for the US industry,” Faury said of the tariffs, advocating for a return to a duty-free status.
“We’re looking at opportunities to export to somewhere other than the US, especially for airlines with international operations,” Faury said. “We are finding arrangements with several customers, their network, and their partners to deal with the situation.” Airbus shares have declined 4.9 per cent this year.
Airlines, including Delta Air Lines and American Airlines Group, have said they’re unwilling to pay extra costs for planes. However, there are workarounds in some cases—Delta, for example, is routing a new Airbus A350-900 built in Toulouse, France, through Tokyo, Bloomberg reported this week. This strategy echoes one the airline took in 2019 when a trade dispute led to short-lived US tariffs.
Airbus Q1 Results
With its first-quarter results, Toulouse, France-based Airbus cautioned that tariffs have injected further uncertainty into an aviation industry supply chain that has not fully recovered from Covid-19. The company reiterated that it aims to deliver about 820 commercial aircraft this year. However, the target doesn’t include the fallout from tariffs and assumes “no additional disruptions to global trade or the world economy,” according to a statement Wednesday.
Deliveries this year will be backloaded, “reflecting the specific supply chain challenges we are facing,” Airbus said. Airbus has struggled to get engines for narrowbody planes, which constitute the bulk of deliveries. It expects output to be soft in the first half of 2025 as it builds planes that don’t yet have engines, so it can’t be handed over to airlines.
In the first quarter, Airbus reported adjusted earnings before interest and tax of €624 million ($709 million) on revenue of €13.54 billion. Net income came in at €793 million, beating the estimate of €532.6 million in a Bloomberg survey, after the company revalued certain equity investments.
With inputs from Bloomberg
About The Author
