Delta Airlines exploited a loophole in President Donald Trump’s import tariffs on new Airbus planes to save hundreds of millions of dollars over the past year, Bloomberg reported Tuesday.
Trump released import tariffs in 2019 jacking up the price for U.S. airlines to import Airbus planes that are manufactured overseas. Delta, however, honed in on the phrasing of Trump’s tariff order to avoid paying the tariff on Airbus planes that were for all intents and purposes new. The scheme is estimated to have saved Delta roughly $270 million throughout the last year, during which the air travel giant has been devastated by COVID-19.
Delta is sidestepping millions of dollars in U.S. tariffs on European planes by initially routing them far outside the country to such places as Amsterdam, Tokyo and El Salvador. https://t.co/F9JmIFWQTA via @sidyoutwit @Schlangenstein @sdonnan pic.twitter.com/zZPNUnFt6t
— Stuart Wallace (@StuartLWallace) November 17, 2020
The Trump administration tariff stipulates that a “new” Airbus is any such plane with “no time in service or hours in flight other than for production testing or for delivery to the US.” The highly narrow definition allowed Delta to send planes that were manufactured in Europe on “tours” to places like Amsterdam, Tokyo and El Salvador. Then, once the plane has hours in flight for a purpose other than “testing or for delivery to the US,” it could be brought to America without paying the tariff, Bloomberg reported. (RELATED: Airline Group Signs Letter Calling For Europe-US COVID Test-Sharing To Save Industry)
Delta has used this scheme on seven new Airbus planes over the past year. The move comes as coronavirus has ravaged not only Delta but the entire airline industry with low demand. Despite its savings on the Trump tariffs, Delta reported $5.4 billion in losses in the third quarter of 2020 alone, bringing its total losses during the pandemic to $11 billion.
Delta is currently losing roughly $10-12 million per day, which is down from its rate of loss of of $43 million per day this spring during the height of lockdown measures.