Delta CEO: 'We will not pay those tariffs' on Bombardier jets

Delta CEO: 'We will not pay those tariffs' on Bombardier jets

Delta CEO: 'We will not pay those tariffs' on Bombardier jets

It's possible Delta will delay deliveries of the C Series planes, which are scheduled to begin next year, Chief Executive Officer Ed Bastian said Wednesday. "We're not going to be forced to pay tarrifs or do anything of the ilk so there should not be any concerns on our investors minds in that regard".

Delta is Bombardier's biggest C Series customer and its order was considered key in cementing the market viability for Bombardier's flagship passenger plane.

Delta in 2016 ordered as many as 125 new CS100 jets from the Canadian aerospace company, Bombardier.

The U.S. Commerce Department sided with Boeing in the dispute in which Boeing accused Bombardier of receiving subsidies for the jet-making program and selling the jets to Delta below the cost of production.

The proposed duties would not take effect unless affirmed by the U.S. International Trade Commission (ITC) early next year.

Boeing will have to prove that it was harmed by the C Series sale to Delta for the ITC to rule in its favour.

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"In our opinion it is very hard for Boeing or any USA manufacturer to claim harm with a product that we purchased that [Boeing] did not offer and they don't produce". As part of Delta's competition between manufacturers to supply it small airliners, Bombardier offered the CS100, while Boeing offered used Brazilian regional jets, not all-new airplanes.

The case has fueled trade tensions between Canada and the United States, emerging as a flashpoint as the two countries try to hammer out a new continental trade pact. Canada has threatened to kill a deal to buy Boeing F/A-18 Super Hornets, and the United Kingdom said future Royal Air Force purchases from Boeing might be in question should the tariffs be imposed.

Bombardier is the largest manufacturing employer in Northern Ireland, and the decision to impose duties on the planes has put 4,200 jobs at risk. The airplane is also half produced by USA aerospace companies, including United Technologies which supplies the jet's Pratt & Whitney engines.

The comments came just hours ahead of talks between Prime Minister Justin Trudeau and President Donald Trump expected to focus on the aerospace dispute.

The carrier said the airline is exploring alternatives but declined to give any details.

On an earnings call on Wednesday, Bastian said, "We will not pay those tariffs and that is very clear".

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