Atlanta-based Delta avoids US tariffs by sending new Airbus jets on a world tour
Yeah, they're still happening. China, Of course. Also we have put import taxes on a bunch of European goods. French wine Scotch whisky, Also Airbus airplanes. But Delta Airlines, a buyer of the aforementioned Airbus's has been reading the tariff, fine print and it has been paying off, said Philip wrote the story for Bloomberg. Welcome to the program. Thank you, Kay. So in in layman's terms here if you could. What is Delta doing with these new planes? Yes. Oh, does that's doing something really interesting with the new plans and instead of usually flying them to the U. S, as they have in the past. What they've done instead is fly these planes overseas. Essentially if the plane has any hours and flight, aside from the delivery to the U. S, and testing that would make it a use plan and no longer subject of tariffs because the tariffs only applied new planes. Very tricky. You gotta know the laws. So give me an example. They Delta plunks down. However much money. It is for a new Airbus And it takes off and flies to wear and does what Sure. So take one plane example. The A 3 21. Delta bought a plane from ever US, which was built in Hamburg. The plane flew from Hamburg to El Salvador. It stayed there for over two weeks. And then from there, it flew to the Cayman Islands and then a chance. Atlanta and, most recently, that plane's been flying between Atlanta and Montego Bay, and it has shaved the company. How much money would you guess? So based on the list prices of the aircraft it could have saved as much as 270 million, although airlines don't actually pay the list price for planes, and so the true savings could be much smaller than that, given that most airlines get massive discounts on new plane purchases, But still, Delta has decided it's worth it to go through this goat rope just to not have to pay. However many millions even single digit millions of dollars. It isn't Paris. Absolutely. I mean, the U. S. Has collected over $55 million in tariffs in the last one year or source and said Arabs came in what I hear you saying is that other airlines are not doing what Delta is doing. And they are paying that there's Yeah, that would seem like it. It would seem like those airlines are being charged with tariffs. We should be clear to. This is 100% legal, right? I mean Delta's going by the letter of the law. Absolutely. I mean, the entire strategy rests on the language that classifies the plane as you was once they've flown for any reason other than for testing and delivery. Even as clever as it might be. And as money saving, as it might be. There is some institutional inertia and some inefficiencies that Delta is dealing with here, right? Absolutely. I mean, the fact that they wouldn't really be able to import those plane directly into the US and obviously, that means you have to sort of find places for those planes. In the meantime, it does have some impact on the efficiency. But then remember that you have the covert crisis of the moment. And that sort of helps because you don't need so many plans at the moment, given the fact that there's so many plans that on the ground at the moment, and airlines are trying everything that they can to save money, so this is one sort of tool in the arsenal. Said.