Delta Plans to Take Bombardier Jets from Alabama Plant, Avoiding Tariffs
October 18 2017 - 10:59AM
Dow Jones News
By Susan Carey
ATLANTA -- Delta Air Lines Inc. won't pay any tariffs that are
being proposed by the U.S. government on Bombardier Inc.'s new
CSeries jetliners, Delta Chief Executive Ed Bastian said
Wednesday.
Because of a new agreement between Airbus and Bombardier, Mr.
Bastian said Delta expects to take delivery of those planes from
Airbus's Mobile, Ala., assembly line, but he declined to say when
the 75 new planes will come. Bombardier plans to start a new
CSeries assembly line at the Airbus facility in Alabama. The idea
is that any tariffs wouldn't apply to U.S.-built jets.
Mr. Bastian said the trade spat between Boeing and Bombardier
won't keep Delta from buying Boeing planes in the future. "We have
a great relationship with Boeing," he said at a media briefing at
Delta headquarters. Delta is the second-largest Boeing operator in
the world, he said. But it is "hard to see how Boeing is being
harmed" by the CSeries, a new small jetliner of 100 to 150 seats,
because Boeing has no plane in that category.
Trade officials in Washington have proposed tariffs that would
potentially quadruple the price of Bombardier's CSeries planes for
U.S. buyers after upholding a complaint from Boeing that the
Canadian aircraft maker benefited from unfair government subsidies.
A U.S. trade panel is due to rule in February on whether Boeing
suffered any harm. The tariffs would kick in if harm is found.
Delta is studying both Airbus and Boeing jetliners as
replacements to its elderly fleet of more than 100 MD-80 aircraft.
The CEO expects a decision over the next six to 12 months.
He said both the A320 neo family and the 737 MAX products are
very strong. He declined to say how many planes will be
ordered.
Mr. Bastian said the CSeries jetliners will help Delta bring
more flying inhouse and build up routes from its smaller hubs,
including New York's La Guardia Airport.
He said Delta wasn't a party to the Airbus-Bombardier deal
reached earlier this week, and said he expects a full briefing by
the parties in the coming days. He said it is not clear how long it
will take for the various regulators to approve the new contract
and wouldn't say how long it would take for the new assembly line
to get rolling.
--Doug Cameron contributed to this article.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
October 18, 2017 10:44 ET (14:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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