Delta Plans to Take Bombardier Jets from Alabama Plant, Avoiding Tariffs

Delta Air Lines Inc. won't pay any tariffs that are being proposed by the U.S. government on Bombardier Inc.'s new CSeries jetliners, Delta Chief Executive Ed Bastian said Wednesday.

Because of a new agreement between Airbus and Bombardier, Mr. Bastian said Delta expects to take delivery of those planes from Airbus's Mobile, Ala., assembly line, but he declined to say when the 75 new planes will come. Bombardier plans to start a new CSeries assembly line at the Airbus facility in Alabama. The idea is that any tariffs wouldn't apply to U.S.-built jets.

Mr. Bastian said the trade spat between Boeing and Bombardier won't keep Delta from buying Boeing planes in the future. "We have a great relationship with Boeing," he said at a media briefing at Delta headquarters. Delta is the second-largest Boeing operator in the world, he said. But it is "hard to see how Boeing is being harmed" by the CSeries, a new small jetliner of 100 to 150 seats, because Boeing has no plane in that category.

Trade officials in Washington have proposed tariffs that would potentially quadruple the price of Bombardier's CSeries planes for U.S. buyers after upholding a complaint from Boeing that the Canadian aircraft maker benefited from unfair government subsidies. A U.S. trade panel is due to rule in February on whether Boeing suffered any harm. The tariffs would kick in if harm is found.

Delta is studying both Airbus and Boeing jetliners as replacements to its elderly fleet of more than 100 MD-80 aircraft. The CEO expects a decision over the next six to 12 months.

He said both the A320 neo family and the 737 MAX products are very strong. He declined to say how many planes will be ordered.

Mr. Bastian said the CSeries jetliners will help Delta bring more flying inhouse and build up routes from its smaller hubs, including New York's La Guardia Airport.

He said Delta wasn't a party to the Airbus-Bombardier deal reached earlier this week, and said he expects a full briefing by the parties in the coming days. He said it is not clear how long it will take for the various regulators to approve the new contract and wouldn't say how long it would take for the new assembly line to get rolling.

--Doug Cameron contributed to this article.

Write to Susan Carey at susan.carey@wsj.com

(END) Dow Jones Newswires

October 18, 2017 10:44 ET (14:44 GMT)