One of Boeing's biggest European clients warn that tariffs on imported aircraft, managed by Donald Trump, could be counterproductive for both the US economy and the capacity-hungry aviation industry.
During the A4E Airlines Summit in Brussels on March 27, Ryanair Group CEO Michael O'Leary said the net profits of increasing the fate of US manufacturers via tariffs on aircraft and parts imports were questionable, “given the amount of American parts on Airbus aircraft.”
The impact on the costs and sales volume of European manufacturer Airbus is felt by US suppliers and helps create the risk of “mutually guaranteed destruction,” he suggests.
Importantly, European companies play a key role in Boeing's supply chain. This means that it could increase its costs as a result of tariffs imposed by the US government on parts imported from Europe.
Furthermore, retaliation measures, including European tariffs on aircraft components, could further collide with US companies supplying Airbus, but the levy on completed aircraft could have a significant impact on sales of US airlines reverberating through US and non-US supply chains.
Ryanair's chief argues that it's not wise for the US government to disrupt the aerospace supply chain when all US-based airlines are already working that Airbus and Boeing are “lagging behind in delivery.”
O'Leary's comments came after meeting Stephanie Pope, CEO of Dublin's Boeing Commercial Airplane in the past few days. His understanding from the Pope is that Boeing does not expect the US government to impose such tariffs.
Still, O'Leary, who has over 330 aircraft ordered from Boeing, points out that everyone is careful about making predictions.
“None of us knows,” he said. “I don't think people in the White House know what they're going to do next week or next month.”
Speaking on the same panel, Ben Smith, CEO of Air France-KLM Group, agrees that today's global economy describes an “unknown era” as a “worrisome era.”
Airbus CEO Guillaume Faury told news channel CNBC in February that Airframer could prioritize delivery to non-US customers if the opportunity is applied to its products. He also said that the final assembly line for Airbus in the United States may provide some flexibility if mandated by the US government.
Boeing doesn't have the same production flexibility. All of its commercial aircraft are completed in the US.
