By Layan Odeh
A faceoff between the US and EU over jetliner tariffs risks making travel more expensive for passengers, the world’s biggest long-haul airline has warned. Tit-for-tat import duties on Boeing and Airbus planes would ultimately increase the cost of the aircraft and hence also fares, Emirates president Tim Clark said in Dubai.
“In the end, the prices of what we get charged as a result of tariff imposition will be passed through as they have to, to consumers, so prices are likely to rise,” Mr Clark said in a speech at the 2019 Aviation Show.
The US has said it will introduce a 10% levy on European jetliners following a World Trade Organisation (WTO) ruling that Airbus benefited from illegal state aid. The WTO is considering a similar case against Boeing that is due to be decided next year and the EU says it will introduce tariffs of its own if the US acts now.
French finance minister Bruno Le Maire told reporters last week he doesn’t want aviation to become the latest front in global trade wars, but that the bloc will hit the US with sanctions if a settlement isn’t reached in the long-running dispute over aircraft aid.
Airbus has said it favours a negotiated settlement to the spat after the WTO authorised $7.5 (€6.8bn) in tariffs against the EU. The US plans to target duties at goods including aircraft, though not jetliner parts, leaving the door open for Airbus to minimise the impact of the levies by supplying as much of the US market as it can through its assembly line in Mobile, Alabama.
Mr Clark is no stranger to speaking out over thorny issues affecting airlines. The industry veteran last month hit out at Airbus, Boeing and their engine suppliers over under-performing aircraft, saying he’s no longer prepared to take delivery of planes that don’t meet specifications.
He returned to that theme in Dubai, urging Boeing to test the re-engined and re-winged 777X for up to 16 months before starting deliveries following delays, and casting doubt on if Emirates will receive any of the 777-9 variants it has ordered in 2020 as planned.
“By the end of next year, we were to have eight of them. Now it doesn’t look like we will have any,” Clark said. Emirates has a 150-jet order for the 777X.
Mr Clark said Emirates earnings have considerably improved from a year ago, though the collapse of Thomas Cook weighed on the ground-handling division, which counted the UK tour operator as a client.