Delta Air Lines’ upcoming aircraft deliveries are going to get interesting. The airline has a massive order book with Airbus, but insists that it won’t be paying tariffs on these aircraft.
Delta will defer delivery of planes with tariffs
Yesterday, Delta revealed its Q1 2025 financial results, which always sets the tone for the industry, since the carrier is the first to report results, which gives us a good sense of industry trends.
Obviously it has been quite a 24 hours. Yesterday morning, Delta CEO Ed Bastian indicated that President Trump was taking the “wrong approach” with tariffs. A few hours later, Trump reversed course on tariffs, but only partially. That brings us to some interesting comments that Bastian made during the earnings call.
Delta has quite a few aircraft on order, and Delta is a huge Airbus customer, with A220s, A321neos, A330neos, and A350s, on order (in fairness, some aircraft, like the A220s, have assembly plants in the US). Bastian was asked about what impact tariffs will have on new aircraft deliveries, and whether tariffs would cause Delta to defer delivery of new aircraft. Here’s Bastian’s answer:
“Obviously in this environment, we are going to work very closely with Airbus, which is the only airline we’ve got deliveries coming from for the balance of this year. And they’ve been a great partner. We’ll do our very best to see what we have to do to minimize tariffs. But the one thing that you need to know we are very clear on is that we will not be paying tariffs on any aircraft deliveries we take. 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. So we’ve been clear with Airbus on that and we’ll work through and see what happens from that.”
As a follow-up, Bastian was asked specifically if the airline was looking at deferring aircraft deliveries because of the tariffs, or because of the slowdown in demand. Bastian answered that in a pretty straightforward way:
“We will defer any deliveries that have a tariff on it.”
Let’s see how Delta’s Airbus aircraft deliveries play out…
Let’s keep in mind that under Trump’s tariff plan, the United States was going to impose a blanket 20% tariff on imports from the European Union. While Trump yesterday reversed course and put a 90-day pause on new tariffs being implemented (aside from China), there’s still a blanket 10% tariff that applies in the interim.
So it’ll be interesting to see how Delta’s situation plays out with new airplanes. I suppose on the one hand, the airline might be happy to be able to defer new planes, due to the general slowdown in growth. Furthermore, there is high demand for new Airbus aircraft, so it might not even be that hard to move around delivery slots.
It’s funny to consider that when Trump was elected, Bastian said that he thinks a Trump presidency will be “positive” for airlines, and that “we worked with President Trump well in his first term,” and he was “very helpful,” and that “he was a strong supporter of the U.S. airlines and U.S. jobs,” and “he knows our industry well, very, very well.”
Of course executives of major companies say whatever they have to in order to get on his good side, though there’s a certain irony to that, since Trump was campaigning on the concept of tariffs, saying how “tariff” is his favorite word. That doesn’t exactly seem positive for an airline that prefers to buy foreign aircraft, no?
Look, if you think high tariffs on imports are good for the economy, then I by all means understand why you’d support Trump. I just don’t get the people who are like “oh, I didn’t think he’d do this.” It’s one of the campaign promises he actually followed through on (well, before yesterday’s reversal).
Bottom line
Delta has revealed that it won’t be taking delivery of any new Airbus aircraft as long as there are tariffs on them, and that the Atlanta-based carrier will defer deliveries, if necessary. That’s going to get quite interesting, given that Delta has a massive order book with Airbus.
How do you see this Delta tariff situation playing out?
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