Category Archives: Delta Airlines
Delta Air Lines CEO Ed Bastian said the Atlanta-based airline will not pay tariffs on the Bombardier CSeries and acknowledged the brewing trade dispute between the US and Canada over the aircraft may delay its delivery to Delta.
Delta has 75 CS100s on firm order and is scheduled to take delivery of its first in the spring of 2018. Delta’s order, which also includes options for 50 more CSeries aircraft, led Boeing to file a complaint with the US Commerce Department, alleging financial help from the Canadian federal and Quebec provincial governments on the CSeries program enabled Bombardier to sell the aircraft to Delta at an “absurdly low” price. Initial rulings issued by the Commerce Department in late September and early October called for Delta to pay as much as 300% in duties on each CSeries aircraft it receives.
Those duties would be put in place if a parallel investigation by the US International Trade Commission (ITC) finds that CSeries subsidies and price-dumping have caused material damage to Boeing. The ITC ruling is expected in the first quarter of next year, just ahead of planned first deliveries to Delta.
During an Oct. 11 conference call with analysts and reporters, Bastian was emphatic: “We will not pay those tariffs.” He said Delta does still “intend to take the aircraft,” although he acknowledged “there may be a delay as this debate gets brought to a head over the next 12 months … We believe Delta will get [the CS100s] at the agreed contractual price.
Bastian said it is still “early” in the process by which the CSeries duty issue will be resolved, noting the Commerce decision has “triggered a lot of discussions at the political level beyond aerospace.” Bastian said the Commerce decision “is not just disappointing—it doesn’t make sense.”
He added that ITC will have a hard time detailing material damage to Boeing from the Delta CSeries order.
“In our opinion, it is very difficult for Boeing to claim harm,” he said, noting that Boeing “did not offer and they do not have” an aircraft in the size range of the CS100, which Delta plans to configure with 110 seats. Boeing’s position is “a bit nonsensical,” Bastian said.
He added Delta is in talks with Bombardier about “various other plans or alternatives we’re contemplating” if the duty is imposed, declining to elaborate.