The recent imposition of tariffs on imports has significant implications for the purchase of aircraft and aircraft components for both the commercial and private aviation market sectors. Unless exemptions are issued, the imposition of substantial tariffs on imported aircraft and related components is poised to affect scheduled airlines, on-demand air carriers, fractional ownership and leasing companies, as well as private buyers in potentially consequential ways.
Increased acquisition costs
Aircraft, engine and parts manufacturing is one of the largest export industries in the US. Trade with Canada, Mexico and China represents 40% of all US international trade. The primary consequence of the new tariffs is the escalation in the cost of acquiring new aircraft, components and parts. The Trump administration’s decision to revoke the 45-year duty-free status of aerospace giants like Boeing and Airbus means that imported aircraft are now subject to significant duties. These import duties will also affect products from Dassault, Pilatus, Bombardier, Embraer, Dornier and Honda, as well as US based manufacturers Gulfstream, Textron and Sikorsky for all components manufactured outside the US. This policy shift has led to anticipated price increases. For example, a 25% tariff on Airbus planes delivered from Europe will add millions to the cost of each aircraft. Delta Air Lines has already indicated plans to defer deliveries of Airbus aircraft that would incur these tariffs, stating that absorbing such additional costs is not economically viable.
Market uncertainty
The imposition of tariffs introduces a layer of uncertainty into the aviation market, prompting buyers to reconsider or delay their purchasing decisions. Canada and the European Union have already imposed retaliatory duties against the US. Delta Air Lines retracted its 2025 financial guidance and halted planned new-plane purchases in response to the tariff-induced uncertainty. This cautious approach reflects broader industry apprehension, as airlines and private buyers are increasingly prioritizing cost management and cash flow preservation in the face of unpredictable trade policies.
Aircraft leasing companies are also navigating the complexities introduced by tariffs. The potential for increased acquisition costs and market volatility affects lease pricing and demand. Lessees may face higher lease rates as lessors pass on the additional costs incurred from tariffs. Furthermore, the uncertainty surrounding trade policies can complicate long-term planning and financing arrangements within the aviation industry.
Legal and contractual considerations
Broadly speaking, the evolving tariff situation may persuade some aircraft purchasers to conduct a thorough review of their existing and forward-looking plans for aircraft purchases and leases. Buyers and lessors can benefit from assessing the allocation of tariff-related costs and liabilities within their agreements. Some buyers of non-US made aircraft are including special contract provisions to protect themselves from the increase in expense. Others are either accelerating their dates of closing or refocusing their attention on US-made aircraft.
Thoughtful, proactive strategies, including contract drafting and financial planning, can help to mitigate the adverse effects of these trade policies. Seeking experienced legal and financial guidance and support is the best way to start that process.