U.S. airlines grapple with ‘unfair tax’ that adds to aircraft supply disruption

WASHINGTON/CHICAGO (Reuters) – U.S. airlines are scrambling to digest a new 10% tariff on European-made Airbus planes that threaten additional havoc in an aircraft supply market already reeling from frozen deliveries of Boeing Co’s 737 MAX.

In a statement late on Thursday, Delta Air Lines called the proposed levy on aircraft from Europe that are already under contract for purchase “an unfair tax on U.S. consumers and companies.”

The tariff on Airbus planes creates uncertainty for aircraft delivery terms much like the global grounding of Boeing’s 737 MAX in March after two fatal crashes and comes at a time of threats to international air travel demand in the midst of slowing global economic growth and trade disputes.

No. 2 U.S. carrier Delta is not a 737 MAX customer but with some 266 Airbus orders is the most exposed to aircraft levies due to take effect on Oct. 18 after the World Trade Organization gave Washington the right to impose tariffs on $7.5 billion worth of EU goods annually in a long-running case.