The head of Delta Air Lines says his company does not expect to pay any tariffs related to its purchase of CSeries jets from Montreal-based Bombardier, but expects to complete the order as planned.
Speaking with analysts and reporters on a conference call to discuss the airline's quarterly results on Wednesday, Ed Bastian was asked about two recent U.S. rulings that slapped punitive tariffs adding up to more than 300 per cent on the company's recent purchase of up to 125 CSeries jets.
The Department of Commerce recently slapped a 220 per cent countervaling duty on the jets and an 80 per cent anti-dumping duty after American plane maker Boeing Co. complained about being unfairly disadvantaged by the deal.
Bombardier is appealing both rulings and the governments of Canada and the United Kingdom are both threatening retaliation in the matter, and the airline's CEO expressed confidence that the tariffs won't come to pass, one way or the other.
'We are not going to pay any tariff, and we do expect to take the airplanes," Bastian said.
Bastian said he thinks Boeing's argument is without merit, because both tariffs are based on the notion that Boeing suffered financial harm because of Bombardier's actions.
"In our opinion it is very difficult for Boeing or any U.S. manufacturer to claim harm with a product we purchased that they don't offer," Bastian said of the CSeries jets, the smallest of which is a 108-seater. Boeing currently doesn't make any planes that small. The closest they had to it, the 717, ceased production a decade ago.
"To us it's unrealistic, a bit nonsensical," he said. "But we are working closely with our partners at Bombardier."
"We will not pay the tariffs that are being discussed or debated," which Bastian stressed were "preliminary."
According to a report from Reuters, a Bombardier spokesman said the manufacturer was confident that the U.S. International Trade Commission (ITC), which must affirm the duties for them to take effect, will "reach the right conclusion given that Boeing did not compete for the Delta order."
"Delta has been supporting Bombardier throughout the process and its CEO, Ed Bastian, reaffirmed the airline's intention to take possession of its CSeries aircraft. This is the message that we should get out of this," spokesman Simon Letendre said.