Aviation Industry Warns of Boeing 787 Price Surge Due to Trump’s Steel Tariffs
They warned that airlines will not be willing to pass this cost on to consumers.
A new warning has emerged in the aviation industry, this time concerning the tariffs imposed by Donald Trump this week on steel imports, which could drive up the cost of a Boeing 787 by $40 million.
The concern was highlighted in an interview with Aengus Kelly, CEO of AerCap, the world’s largest aircraft leasing company, which manages a portfolio of 1,700 aircraft, 1,000 engines, and 300 helicopters leased to various airlines, including those in Brazil.
Speaking with CNBC, Kelly stated: "If we see the worst-case scenario, with a widespread 25% tariff increase and retaliatory measures on both sides, the price of a Boeing 787 would rise by $40 million. No one is going to pay for that. It’s just not going to happen. They won’t be able to buy it, period," according to Aeroin, our affiliated media outlet.
Kelly warned that airlines would not be willing to pass this cost on to consumers, as a near-25% price hike would be unfeasible, especially given the availability of competing aircraft in the market.
"What will happen is that airlines unable to afford the Boeing aircraft will turn to Airbus. In the worst-case scenario, over time, Boeing would end up with around 20% to 25% of the global market, mainly concentrated in the U.S., while Airbus would control the rest of the world with about 75% to 80% of the market—because no one could afford those prices," the CEO concluded.
In January, just days before Donald Trump’s inauguration, Kelly had already warned about this tariff. He still believes the measure will be reversed or reduced, but he notes that, regardless, rising costs could benefit Airbus and Embraer in the medium term.
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