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).
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…
Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.