Tariffs could lift Boeing, Airbus plane prices even higher

Commercial plane prices, already lifted in recent years due to pandemic supply chain shocks, are poised to climb further as Boeing and Airbus are buffeted by trade tariffs.

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“Compared with 2018, prices on commercial jets could be around 10-20 per cent,” one aviation expert told AFP on condition of anonymity.

The American and European aerospace giants have grappled with higher expenses for primary materials such as aluminum, composite parts and energy, as well as labour cost pressures.

To resolve a labour strike, Boeing late last year agreed to a new contract with its Seattlebased machinists union that lifted wages by 38 per cent over four years.

Just months earlier, Spirit AeroSystems, a major supplier to both Boeing and Airbus, reached an agreement with similar wage increases.

Richard Aboulafia, managing director at consultancy AeroDynamic Advisory, said tariffs are “inflationary, for a particularly high rate” including castings, forgings and “anything titanium... especially since all that Russian capacity has been cut off from the US and, to a lesser extent, from Europe.” Aboulafia estimates prices for materials and equipment have risen 40 per cent since 2018. That’s before Trump’s 25 per cent tariffs on steel and aluminum, which are used in planes.

“It’s kind of ironic, raw materials were not a problem, but Trump is determined to make them a problem,” Aboulafia said.