Trump’s tariff policy (including retaliatory measures by other countries) is obviously causing a massive amount of uncertainty across the global economy. Aircraft manufacturers and airlines are trying to come to terms with what this means for new aircraft deliveries, whether it’s US airlines importing Airbus aircraft, or foreign airlines importing Boeing aircraft. For that matter, aircraft parts are manufactured all over the world.
That brings us to a situation that Lufthansa is currently in, and a potentially creative solution that the carrier has (thanks to Toilet Paper Man for flagging this).
In this post:
Lufthansa could get creative to avoid 787 tariffs
Lufthansa has dozens of new long haul aircraft it hopes to take delivery of in the coming years. Among those are a large number of Boeing 787 Dreamliners, which are ready to be delivered, except for the fact that the new Allegris business class seats can’t seem to be certified.
Lufthansa was hoping to take delivery of these planes in the coming months (even if business class seats can’t be occupied), but the airline is now dealing with the reality of a trade war between the United States and European Union, including retaliatory tariffs from the European Union. Airlines obviously don’t want to pay additional tariffs on new planes, so it seems that Lufthansa Group has a creative solution, as reported by the Süddeutsche Zeitung.
Lufthansa Group is of course a large, multinational corporation, with subsidiaries in various countries. SWISS is one of Lufthansa’s biggest brands, and Switzerland isn’t part of the European Union, and hasn’t imposed retaliatory tariffs against the United States.
So Lufthansa Group is considering using this to its advantage. According to reports, the company is looking at the possibility of importing these Dreamliners to Switzerland, and initially registering them there, before eventually transferring them to a German registration, in order to avoid tariffs.
It remains to be seen what this could look like
While Lufthansa Group is reportedly considering registering these new Dreamliners in Switzerland, the exact details of such an arrangement remain to be seen.
Would the planes be in the Lufthansa livery, but technically operated by SWISS, as part of a wet lease agreement with Lufthansa? Would Lufthansa crews still be able to operate the planes with such an arrangement, or would SWISS crews need to staff the flights?
This also gets at the bigger point of all the new loopholes that these kinds of tariffs will create for multinational corporations. For example, will the European Union allow such an arrangement, or add new restrictions when Lufthansa Group tries to pull something like this?
I’ve gotta say, it just seems like Lufthansa Group can’t catch a break. First there was the whole Allegris rollout mess, then Lufthansa has faced endless delays with new aircraft deliveries, and now the airline is being caught in a tariff war with its new aircraft deliveries.
Bottom line
Lufthansa has over a dozen Boeing 787s that are expected to be delivered in the near future, and the timing couldn’t possibly be worse, given the current tariff situation. Lufthansa is reportedly exploring its options for dealing with this, including the possibility of initially registering the 787s in Switzerland. I’m curious to see how this all plays out. I almost feel bad for the folks at Lufthansa Group…
Trump will get wind of this and simply impose increased tarrifs on Switzerland. Swiss govt won’t let LH do it.
Huh? We're talking about import to Switzerland, not the other way around. Are you suggesting Trump would introduce export tariffs or what, lol?
I guess you don’t know that tariffs are imposed by the IMPORTING country…..LH isn’t getting around US Tariffs it’s getting around EU tariffs by this loophole!
What makes you think that Swiss (the airline) would be involved? I assume the planes would be owned and operated by Lufthansa, but registered in Switzerland. There's no point involving Swiss.
That being said, I highly doubt this loophole won't be closed. Ultimately, whenever Switzerland had to decide between following European rules vs losing free trade with Europe, they chose the former.
I have to tell the Donald about this!!!
We need to thank Toilet Paper Man for many things, methinks...
All European Carriers should stick to Airbus! We don't need american stuff to fly!
Sure it was a while ago, but if I recall the Berlin Airlift used Douglas Corporation planes (now Boeing) DC-3’s to keep a few million Berliners from starving….after the USA saved all of Europe from Nazi Germany, using a large number of Boeing planes. Thank you Great Britain for NOT capitulating and thank you to what we in the USA call “the Greatest Generation” for doing all you did. There are more than 100,000 American...
Sure it was a while ago, but if I recall the Berlin Airlift used Douglas Corporation planes (now Boeing) DC-3’s to keep a few million Berliners from starving….after the USA saved all of Europe from Nazi Germany, using a large number of Boeing planes. Thank you Great Britain for NOT capitulating and thank you to what we in the USA call “the Greatest Generation” for doing all you did. There are more than 100,000 American servicemen buried in cemeteries in France alone.
Say what you want. Europe needs the USA more than the USA needs Europe.
Steve, there are many, many British and other European people who could easily take exception to your analogy.
Regardless of what you might think, the U.S. did NOT win the war single handily sunshine.
I’m very regretful to say that I have become an anti-American American. I never in the world thought I would say that
You are far from alone.
Didn't say single handily, I said saved. You can’t argue that. US Blood and Treasure turned the tables on the war. Britain never gave up. They just needed help.
Perhaps very European should have to visit the cemeteries in France where over 100,000 of our troops are buried. Another 150,000 are buried in the US or other places in Europe.
And during the Cold War, who kept the Russians in check?
And don't call...
Didn't say single handily, I said saved. You can’t argue that. US Blood and Treasure turned the tables on the war. Britain never gave up. They just needed help.
Perhaps very European should have to visit the cemeteries in France where over 100,000 of our troops are buried. Another 150,000 are buried in the US or other places in Europe.
And during the Cold War, who kept the Russians in check?
And don't call me sunshine. I wore the cloth of my Nation for almost three decades.
Steve, without a doubt you have swallowed over three decade's of U.S. military propaganda.
The reality is that WWll made the U.S. into both an economic and military superpower. Great Britain paid very dearly for every single round of ammunition, every bomb and every piece of military materiel supplied to us by the U.S.
That bill and the interest on the war loan, was only fully paid a few years ago.
Furthermore...
Steve, without a doubt you have swallowed over three decade's of U.S. military propaganda.
The reality is that WWll made the U.S. into both an economic and military superpower. Great Britain paid very dearly for every single round of ammunition, every bomb and every piece of military materiel supplied to us by the U.S.
That bill and the interest on the war loan, was only fully paid a few years ago.
Furthermore Steve, you would needed to put a lot more years in before I would accept a rebuttal from you sunshine …. regardless of your Arm or Rank.
You wore the cloth of your nation? What did you do, run round in a stars and stripe loincloth?
Who kept the Soviets in check? Well Germany had 12 divisions of troops compared to the USA's 4, so it wasn't America alone.
Sunshine.
Europeans do visit and tend to the graves. And far more Europeans died than Americans.
Sunshine.
Europe needs America just as much as America needs it.
The US was in an isolationist period, much as it is now, until Germany's ally Japan attacked our territory and Germany declared war on us. German submarines were prowling off New Jersey, and German diplomats were trying to turn Mexico and South American countries against us. We did not enter World War II to save Europe. We entered it when we finally realized we needed to save ourselves.
Let’s poll OMAAT readership. Is there one person here who supports the tariffs?
Let's poll all reputable economists -- conservative and liberal. Is there one who supports the tariffs?
No reputable economist supports these tariffs to their realized extent. Some express some support for some (milder) tariffs.
Remember, in any case, economists are not experts. Economists are failed mathematicians. They usually start with undergrad math degrees but couldn't hack pure math at the doctoral level. (And, just so you know, PhD mathematicians laugh at undergrad math degree holders as know-nothings.) Despite their failure, economists have egos, so they prognosticate on all sorts of things...
No reputable economist supports these tariffs to their realized extent. Some express some support for some (milder) tariffs.
Remember, in any case, economists are not experts. Economists are failed mathematicians. They usually start with undergrad math degrees but couldn't hack pure math at the doctoral level. (And, just so you know, PhD mathematicians laugh at undergrad math degree holders as know-nothings.) Despite their failure, economists have egos, so they prognosticate on all sorts of things but their track record is unambiguously poor. Nobel laureate economist Krugman predicting an early demise of the Internet was an exemplar of the predictive value of economists.
Very much agreed, @Arps. Rather than trust economists, I'd prefer to heed the wisdom of internet fantasists who weave elaborate contes about their prodigious positions in international law and society.
Lmfao, a fake laywer is again overgeneralizing everything in a way he likes it to be, not how it is.
You sure do know what is normative and what is positive, no?
Act accordingly.
Going by the kinds of comments we see here, I’m going to say there are lots of OMAAT readers who do support them.
I don't think any OMAAT reader supports the tariffs directly, but there are definitely a bunch who will support whatever Dear Leader says without a further thought.
Probably some MAGA cousinf*cker