Delta is protesting new tariffs the U.S. will levy against Airbus. I’m not a fan of them either…but Delta’s opposition represents another example of blatant hypocrisy.
This week, the World Trade Organization (WTO) authorized the U.S. to levy $7.5BN in punitive measures against Airbus, finding that illegal state aid caused damage to Boeing’s commercial airline division.
The U.S. plans to impose a 10% duty on Airbus aircraft delivered into the USA starting later this month. That hits Delta particularly hard, which has large orders for A330neo and A350 aircraft on the books.
A Delta spokeswoman told Reuters:
Aircraft are significant purchases requiring long-lead times for production — often years in advance. Imposing tariffs on aircraft that U.S. companies have already committed to will inflict serious harm on U.S. airlines, the millions of Americans they employ and the traveling public.
Delta also added the “unexpected tax hike will also reduce Delta’s profits.”
Subsidies For Me, Not For Thee
Delta loves to talk about protecting U.S. jobs and how subsidized aid from foreign nations props up business that cannot compete on a level playing field.
But once again, we see a “subsidies for me, not for thee” approach from Delta. Here, the Airbus subsidies European states have provided have been beneficial to Delta. Thus, trying to “level the playing field” (another favorite term of Delta’s) would “inflict serious harm on U.S. airlines, the millions of Americans they employ and the traveling public.” Oh yes, and hurt profit.
Do you see the hypocrisy? If the subsidy hurts Delta or increases competition, Delta is against it “because it hurts U.S. jobs”. If the subsidy helps Delta or decreases competition, Delta is against eliminating it “because it hurts U.S. jobs”.
As an aside, Boeing should be careful of premature celebration, because the WTO may soon rule against it and in favor of Airbus. Boeing is also the recipient of generous state aid in the form of tax breaks and lucrative military contracts. With both sides guilty, I’m against these sorts of punitive tariffs as unnecessary barriers to trade.
I write a lot of positive things about Delta (view the archive here). I’m impressed at its operations, profitability, and the way it treats its employees. From all I hear and read about, the onboard product is also very nice.
But I will continue to maintain a laser focus on Delta’s hypocrisy. Hypocrisy is the fastest way to undermine your credibility and Delta has proven skillfully adept at its self-serving, inconsistent approach to supporting state aid. I’m not amused when it tries to torpedo competition through spurious arguments while trying to cling onto state aid for itself. Until that behavior changes, I’ll keep calling Delta on it.