A220South Seas Aviation

Canadian authorities restrict A220 engine thrust after incidents

Transport Canada, the Canadian civil aviation authority, has issued an emergency airworthiness directive to reduce the engine thrust of Airbus A220 aircraft under certain conditions after several engine incidents were reported.

Issued on October 26, 2019, the directive states that pilots of both the A220-100 and A220-300 models must fly at 94% of their full thrust capacity when they are over 29,000 feet (about 9 kilometers) of altitude. The automatic throttle control must be disabled before climbing at this altitude.

The directive follows several reports of engine in-flight shutdowns affecting the aircraft. On October 15, 2019, Swiss International Air Lines grounded all of its 20 Airbus A220s for an emergency inspection after at least three engine incidents. The two-day inspection forced the Lufthansa subsidiary to cancel about a hundred flights. Operations resumed after the engines were found in “impeccable condition”.

“Preliminary investigation results indicate high altitude climbs at higher thrust settings for engines with certain thrust ratings may be a contributor”, says Transport Canada. The A220 family is powered by the Pratt & Whitney PW1500G engines.

Additionally, Transport Canada forbids the aircraft to fly above 35,000 feet (about 10 kilometers) when weather conditions are prone to icing, as activating the de-icing system at this altitude may overheat the engine, triggering the fire warnings.

Carriers have seven days to comply with the directive. Transport Canada warns that those are interim measures that could be followed by additional actions as the investigation progress.

 

Source: https://bit.ly/2q5SRos

Image: GB-Photographie

Boeing 777xSouth Seas Aviation

It’s official: Boeing pushes 777X, to lower 787 production rate

Together with its Q3 2019 financial results, Boeing has clarified the future of its wide-body planes, officially confirming what Emirates CEO Tim Clark had previously hinted. Boeing has pushed back the 777X entry into service date to 2021.

777X service entry pushed to 2021

Boeing states the 777X program is progressing through pre-flight testing and the first flight of the new Triple Seven “remains on track” in early 2020. However, what does not remain on track is its entry into service date. Previously expected in 2020, now the first delivery date has been to early 2021.

Emirates, which has ordered 150 of the newest generation Triple Sevens, previously expected to take the first delivery in June 2020 and receive a total of eight 777Xs by the end of 2020. However, since September 2019, the airline’s CEO has expressed an increasing skepticism on whether Boeing would be able to meet the deadline. In October 2019, speaking at The Aviation Show MEASA 2019, Clark said that it no longer looked like they would have any 777X jets in 2020.

The last update Boeing provided on the 777X program was back in July 2019. At the time, the manufacturer was still hopeful to make the first delivery in 2020. However, Boeing was already cautious when describing the probability to meet the deadline, by warning of a “significant” risk to that schedule due to the challenges with the GE9X engines. According to reports, General Electric is in the process of redesigning a component on the GE9X – a stator vane in the second stage of the high-pressure compressor.

Boeing to lower 787 production rate

“Given the current global trade environment, the 787 production rate will be reduced to 12 airplanes per month for approximately two years beginning in late 2020,” the manufacturer has also revealed.

 

Source: https://bit.ly/2W3QHlo

Image: Dan Nevill (Wikimedia, CC BY-SA 2.0)

737 MAX GroundingsSouth Seas Aviation

737 MAX groundings put pressure on Boeing deliveries in Q3 2019

The U.S. based manufacturer has announced its deliveries for Q3 2019. The results showcase that Boeing, which is still battling the aftermath of the two deadly 737 MAX crashes, has not yet recovered, as commercial aircraft deliveries have fallen further. In total, Boeing delivered 63 commercial aircraft to customers – compared to Q3 2018 result of 190 deliveries, the latest numbers show a drop of 66.8%.

The 787 Dreamliner generated the biggest cash flow for the company, as customers accepted 35 Dreamliners in total, making up for more than half of the total deliveries in Q3 2019. Other wide-bodies were also represented on the list, as Boeing gave the customers keys to ten 767s, 12 Triple Sevens and one Queen of the Skies, the 747.

737 MAX crisis is most evident in the narrow-body delivery results – in Q3 2018, Boeing transferred 138 737s. During the same period in 2019, the company delivered only five narrow-bodies. Japanese low-cost carrier, Skymark Airlines, received the last ever commercial 737NG delivery on June 27, 2019, meaning that Boeing is looking at a quarter without any 737 deliveries to a commercial airline if the groundings do not lift in Q4 2019.

However, how much damage financially Boeing has conceded will be evident when the company will reveal its Q3 2019 financial results on October 23, 2019. In the previous quarter, the executives in Chicago announced the biggest losses in the company‘s history – but in Q2 2019, the company delivered 90 jets. With further dwindling cash flows due to the decrease in completed order numbers, Boeing might be looking down towards an even bigger hole in its finances.

 

Source: https://bit.ly/2ovSOlp

Image: cpaulfel

NASASouth Seas Aviation

NASA takes delivery of its first all-electric X-plane

These days NASA is not only preoccupied with the research and development of spacecraft – the agency is set on exploring electric propulsion technology for general aviation aircraft. NASA recently received its first all-electric X-plane: known as X-57 Maxwell Mod II, it is the agency’s first all-electric experimental aircraft and the first crewed X-plane in two decades. With the X-57, NASA aims to set industry standards for the growing electric aircraft market.

The X-57 Maxwell was delivered to NASA on October 2, 2019, by its prime contractor Empirical Systems Aerospace (ESAero) at the agency’s Armstrong Flight Research Center in Edwards, California. The rolled-out X-57 comes in the first of three configurations as an all-electric aircraft, known as Modification II, or Mod II.

The X-57’s Mod II is designed to replace traditional combustion engines on a baseline Italian Tecnam P2006T light aircraft, with electric cruise motors. The propulsions system powering the Maxwell weighs approximately 3,000 pounds, including with its 860 -pound lithium-ion batteries. The aircraft can reach a cruising speed of 172 miles per hour at 8,000 feet, Popular Mechanics writes.

Referring to the delivery as a “major milestone”, NASA will now start putting the aircraft through ground tests, to be followed by taxi tests and eventually flight tests. The agency is aiming to use the X-57 to advance the design and airworthiness process for distributed electric propulsion technology for general aviation aircraft.

“The X-57 Mod II aircraft delivery to NASA is a significant event, marking the beginning of a new phase in this exciting electric X-plane project,” X-57 Project Manager Tom Rigney said in a statement. “With the aircraft in our possession, the X-57 team will soon conduct extensive ground testing of the integrated electric propulsion system to ensure the aircraft is airworthy. We plan to rapidly share valuable lessons learned along the way as we progress toward flight testing, helping to inform the growing electric aircraft market”.

With the project, that has been in development since 2016, NASA wants to jump ahead of the curve and develop certification standards for the rapidly growing flying electric vehicles market, most notably urban mobility vehicles (UAMs).

NASA’s engineers are already preparing for the project’s following phases, Mod III and IV, which will focus on energy efficiency, featuring a high-aspect ratio wing, compared to the wider, standard wing from the Mod II phase. Late in September 2019, the agency successfully completed loads testing on the new wing that will be integrated into the final configuration of the piloted experimental aircraft at NASA Armstrong’s Flight Loads Laboratory.

“ESAero is thrilled to be delivering the MOD II X-57 Maxwell to NASA AFRC,” said ESAero President and CEO Andrew Gibson in the statement. “In this revolutionary time, the experience and lessons learned, from early requirements to current standards development, has the X-57 paving the way. This milestone, along with receiving the successfully load-tested MOD III wing back, will enable NASA, ESAero and the small business team to accelerate and lead electric air vehicle distributed propulsion development on the MOD III and MOD IV configurations with integration at our facilities in San Luis Obispo”.

The X-57 Mod II is a “design driver” meant to spur lessons learned and best practices in the development of electric aircraft. According to NASA, this design driver includes a 500% increase in high-speed cruise efficiency, zero in-flight carbon emissions, and quieter flight for communities on the ground.

NASA’s X-planes are experimental aircraft that the agency uses to test a variety of technologies, and has been doing so for several decades. One of the experimental aircraft developed by the agency was the Bell X-1, a rocket-engine powered aircraft, which became the first plane to break the sound barrier in flight. On October 14, 1947, U.S. Air Force Captain Charles E. “Chuck” Yeager flew the X-1 reaching a speed of 700 miles (1,127 kilometers) per hour, or Mach 1.06, at an altitude of 43,000 feet (13,000 meters).

One of the most notable projects recently, is NASA’s Low-boom Flight Demonstration Mission, aimed at designing and building a large-scale supersonic X-plane with technology that reduces the loudness of a sonic boom. NASA aims to fly the X-plane over select U.S. communities to gather data on residents’ responses to the low-boom flights. The data will be delivered to U.S. and international regulators in an effort to loosen civil supersonic flight restrictions over land.

 

Source: https://bit.ly/2p4Ol9v

Image: NASA Graphic / NASA Langley/Advanced Concepts Lab, AMA, Inc.

AirbusSouth Seas Aviation

Airbus slapped with 10% tariffs, industry to lose more, it says

Washington is set to make good on its pledge to retaliate on European Union (EU) goods, including aircraft, in the long-running jet subsidy case. Following the penalty award by the World Trade Organization (WTO) arbitrator, the U.S. announced it will slap 10% tariffs on European-made aircraft as well as 25% duties on other industrial and agricultural products from the EU. Airbus together with its U.S. based customers have expressed deep concerns over the impact that trade sanctions will have on the aviation industry and airlines’ businesses.

On October 2, 2019, the WTO issued its decision on the amount of harm EU subsidies has caused the United States and the level of countermeasures the U.S. may request in the case. As anticipated, Washington was given the go ahead to impose tariffs on $7.5 billion worth of EU exports annually as punishment for the alleged illegal government subsidies to Airbus.

The U.S. President Donald Trump, on his official Twitter account, hailed the WTO ruling as a “nice victory”: “The U.S. won a $7.5 Billion award from the World Trade Organization against the European Union, who has for many years treated the USA very badly on Trade due to Tariffs, Trade Barriers, and more. This case going on for years, a nice victory!”.

The Office of the United States Trade Representative (USTR) was quick to announce on October 2, 2019, that it will be imposing tariffs of 10% on large civil aircraft and 25% on agricultural and other products from the EU “at this time”, stating that “the U.S. has the authority to increase the tariffs at any time or change the products affected”.

The USTR has drawn up a target list of $25 billion worth of EU items it could select from and states that the bulk of tariffs – set to take effect on October 18, 2019 – will be applied to large Airbus aircraft made in France, the UK, Germany and Spain – the four Airbus consortium countries and EU member states cited in the U.S. case before the WTO.

“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies,” U.S. Trade Representative Robert Lighthizer said in an official statement.

“Accordingly, the United States will begin applying WTO-approved tariffs on certain EU goods beginning October 18. We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers”.

The U.S. says that the $7.5 billion tariff figure was calculated based on WTO findings, representing the harm that illegal government aid for Airbus caused on sales of Boeing large civil aircraft, as well as, impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets.

Implications across manufacturing

Airbus has responded to the WTO decision on October 2, 2019, stating that the imposition of tariffs on EU-made aircraft and/or components will create “insecurity and disruption” to the aerospace industry as well as the broader global economy.

“Airbus will continue working with its US partners, customers and suppliers, to address all potential consequences of such tariffs that would be a barrier against free trade and would have a negative impact on not only the US airlines but also US jobs, suppliers, and air travelers,” said Airbus CEO Guillaume Faury in an official statement. Airbus is urging the U.S. Administration and the EU to find a negotiated settlement to the dispute to avoid what it says will be a “serious damage to the aviation industry”.

“We are concerned about the detrimental impact aircraft tariffs will have on the ability for low-cost carriers like JetBlue to grow and compete, which will harm customers who rely on us to offer competitive, low fares, – spokesman for JetBlue

The European Union has drawn up its own list of $20 billion worth of U.S. goods, including imported Boeing aircraft, it seeks to tariff in a subsequent case before the WTO. The trade watchdog is due to determine the amount of these countermeasures the EU can impose on U.S. products in the coming months. Airbus maintains that the sanctions on both sides “will severely impact US and EU industries, putting high costs on the acquisition of new aircraft for both US and EU airlines”.

Airbus states it sources about 40% of components and materials from U.S. suppliers, totaling $50 billion in spending in the last three years since 2019. In addition, the European plane maker’s U.S.-based operations support 275,000 American jobs. If tariffs were to be imposed on aircraft parts, it would hurt Airbus’ production at its Mobile, Alabama, site, resulting in higher costs and the loss of U.S manufacturing jobs, since Boeing also uses European-made plane parts in its U.S. production.

However, according to a report by Reuters, the new 10% tariffs will not hit Airbus’ Alabama plant, as semi-finished fuselages and wings are exempted from the USTR’s target list. “Earlier today [October 2, 2019], we received confirmation from Airbus of very positive news that parts and components used at the final assembly plant in Mobile will not be subject to tariffs,” George Talbot, spokesman for the city of Mobile, was quoted as saying by the news agency. Airbus produces its wide-body planes in Europe, while its single-aisle jets are built both in Europe and at the Mobile plant (namely, the A320s and the A220s).

“While we are pleased that aircraft production and deliveries from Airbus’ Mobile, Alabama plant will not be affected, the proposed 10 percent tariff on aircraft from the EU that are already under contract for purchase is just an unfair tax on U.S. consumers and companies, – Delta spokesperson

Implications across the airline business

U.S. airlines operating Airbus aircraft have spoken out in tandem against the tariffs, suggesting the sanctions would eventually result in higher cost of travel as well as cut into profits. Airlines order planes years in advance, which means that switching contracts to another supplier would be very difficult. To compensate for the costs, carriers could increase fares. Airlines may also urge the plane makers to pay the tariffs, contrary to the norm, as Boeing and Airbus are directly involved in the subsidy dispute, as CNBC writes.

All three largest U.S. carriers have Airbus planes in their massive fleets. According to the latest figures by the European manufacturer (as of August 31, 2019), American Airlines operates 168 Airbus aircraft in both single-aisle and wide-body categories, with another 114 A321neo jets on order. United has 177 Airbus planes in its fleet, all single-aisles (the A319ceo and A320ceo), and has ordered 45 A350XWBs (the A350-900).

By far the most important U.S. customer for Airbus is Delta: the airline operates 292 Airbus jets and has around 200 planes on the way, including a total of 137 A321s in both ceo and neo versions, as well as, 32 A330-900s and 12 A350-900s ordered for its long-haul wide-body fleet.

“While we are pleased that aircraft production and deliveries from Airbus’ Mobile, Alabama plant will not be affected, the proposed 10 percent tariff on aircraft from the EU that are already under contract for purchase is just an unfair tax on U.S. consumers and companies,” a Delta spokesperson said in a statement to AeroTime. “We hope that the Administration and the EU are able to resolve this 15-year trade dispute in a manner that respects existing contractual rights.”

Delta has provided a lifeline for the A220 program both in the U.S. and worldwide. In October 2018, the airline became the first in the U.S. to take delivery of the A220. The first A220 built in the U.S., an A220-300, is also destined for Delta, scheduled for delivery in the third quarter of 2020. Currently, the Atlanta, Georgia-based carrier has an order for 23 A220-100s and 50 A220-300s.

Low-cost airlines, such as JetBlue and Spirit, which both fly Airbus single-aisle aircraft, may face even bigger hardships as a result of the sanctions, in efforts to remain competitive and continue to offer low fares. JetBlue has operated exclusively the A320 and A321 jets (as well as Embraer 190s), but is ready to introduce 70 A220s (A220-300s) and 84 A321neo into its fleet. Meanwhile, Spirit flies the A319, A320, A321 (all in the “ceo” versions), and has placed an order for 30 A320neos.

“We are concerned about the detrimental impact aircraft tariffs will have on the ability for low-cost carriers like JetBlue to grow and compete, which will harm customers who rely on us to offer competitive, low fares,” a spokesman for Jetblue told AeroTime. “As we wait for more information on these tariffs, JetBlue will continue to work with U.S. carriers and manufacturers to advocate for a resolution that would help avoid the negative consequences tariffs could have on customers and commercial aviation in the U.S.”

 

Source: https://bit.ly/2ASEypm

Image: Leonard Zhukovsky / Shutterstock.com

EmiratesSouth Seas Aviation

How will Emirates fleet change in the next 10 years?

The Airbus A380 (ex-)lifeline supplier and flagship operator as well as the largest Boeing 777 operator in the world, Emirates keeps it simple when it comes to their fleet: they pick large planes and stick to them. But how the Gulf carrier’s fleet will look like in a decade once the superjumbos begin going out of service?

In Emirates World Interview podcast, Tim Clark, the CEO of the airline, has revealed how the Emirates fleet might look like at the end of the next decade. Currently flying only two types of aircraft – Boeing 777 and Airbus A380 – the fleet will likely be more diverse and far bigger by the end of 20s and early 30s.

According to Clark, at one end of the scale it will still have 500+ seating superjumbos, while on another there will be the “smaller twins”. “Smaller”, of course, in Emirates standards as the “twins” are A330neo, A350XWB and Boeing 787-9, -10 pairs, all of which seat 280+ passengers.

In particular, the 787-9 seats 280, while the 787-10 seats 290 to 310 passengers. In turn, A330-900 seats 310 passengers, while A350-900 accommodates between 300 and 350 passengers.

Emirates and the Boeing 777(X)

Of the 268 aircraft that Emirates currently flies, according to planespotters.net data, the majority of them ‒ 155 ‒ are Boeing 777s. In 10-15 years, the aircraft will likely still hold a considerable place in the fleet.

Emirates will be one of the first airlines to take the brand new “folding wing” Boeing 777X. The airline firmed up its order for the type back in 2014 and now expects to welcome the first of its 150 777Xs in 2020. At least, it hopes to. Tim Clark, Emirates CEO, said in the podcast that the aircraft are “contracted to come to us in June 2020”.

Knowing Emirates’ disappointment with reliability of aircraft and engines manufacturers and Boeing’s troubles with 777X development, Clark’s given timeline of 777X service entry does not sound too confident.

In September 2019, the CEO told reporters that the airline would not take delivery of new Airbus and Boeing jets unless the plane makers and engine manufacturers – Rolls-Royce, General Electric – got their act together.

The engine manufacturer’s problems are indeed threatening the 777X entry into service. The wide-body is to be powered by GE9X engine, which is currently under development. In June 2019, GE Aviation revealed that an issue with its component was detected during testing. Consequently, that meant that engine certification was unlikely to take place until autumn 2019, meaning that the maiden flight of the 777X was delayed by “several months”.

Delayed or not, in ten years 777Xs will be part of Emirates fleet. “You’ll see the fleet of 777Xs” Clark said, also adding that the airline plans to operate both two types of the new triple seven: the -8 and -9.

The airline has been a faithful customer of the Boeing triple seven since 1992, Boeing order book indicates, when it placed its first, shy order for six 777-200ERs. Since then, Emirates’ 777 fleet has grown to be the biggest in the world, and planes in its orders are now counted in the hundreds.

What will step into A380 shoes?

While Boeing 777s are here to stay, the same cannot be said about Emirates’ beloved Airbus A380. With 110 superjumbos in its fleet, the carrier is still awaiting 13 more to be delivered before Airbus ceases its production in 2021. Which means that in the next ten years Emirates will no longer be receiving new A380s and will be retiring some instead.

“As far as Emirates is concerned, these aircraft will be flying until mid-30s, so there is a long time to go before the aircraft disappears from Emirates fleet,” Clark said. He, however, admitted that by the turn of the third decade (2030s) Emirates will be flying a “residual A380 fleet” of some 80-90 aircraft.

Since no other aircraft currently can compete with the superjumbo in capacity (in terms of passenger seats), this means that Emirates will turn to smaller aircraft. In February 2019, Emirates announced an order for 40 A330-900s (deliveries to start from 2021) and 30 A350-900s (deliveries to start from 2024). The order appears to be not finalized yet, as Airbus does not list in it is official order book.

Besides the A330neo and A350XWB, Emirates “continue to be looking” at the Boeing 787, Clark said. Of the three Dreamliner versions currently flying, the Gulf airline is considering two options: the -9 and -10.

 

Source: https://bit.ly/30JsO39

Image: Sorbis / Shutterstock.com

NorwegianSouth Seas Aviation

Norwegian connects the Arctic with gateway to Antarctica

Norwegian became the only airline to operate flights to both the world’s northernmost and southernmost commercial airports, virtually connecting the Arctic to Antarctica in four flights on a 25-hour long mega-journey. The new service should help Norwegian to promote itself as a global low-cost long-haul airline and its transatlantic operations as the company continues to ramp up its domestic flights within Argentina.

Norwegian launched flights to and from the world’s northernmost airport in Svalbard, Norway, and the world’s southernmost airport in Ushuaia, Argentina, on September 21, 2019. Svalbard is located in the Arctic Circle, about 650 miles from the North Pole, while Ushuaia is known as one of the world’s southernmost cities and the primary cruise gateway to Antarctica. The entire journey from north to south covers 9,800 miles (15,770 kilometers) and takes approximately 25 hours on four flights.

The services include Norwegian’s short-haul flights across Europe and a domestic network in Argentina operated by the airline’s off-shoot Norwegian Air Argentina, which launched operations in October 2018. The key connection point on the trip – London Gatwick (LGW). Norwegian launched the UK’s first low-fare route to South America with a non-stop 14-hour long service from Gatwick to the capital of Argentina in February 2019 as part of its transatlantic flights between the UK, the U.S. and South America (Brazil and Argentina). The airline has been operating long-haul flights at Gatwick since 2014 and has placed the hub at the heart of its transatlantic operations.

Those seeking to travel from pole to pole on this new service would start in Svalbard and travel to Norway’s capital Oslo where they would connect onward to London Gatwick and meet the overnight flight from Gatwick to Buenos Aires. However, there is a long layover in the Argentinian capital as passengers would have to spend an entire day and an overnight stay, if they wished to continue on the final leg of the journey to Ushuaia, which takes off from a different, domestic airport in Buenos Aires (Aeroparque). Three flights on the journey are operated on Boeing 737-800 with the London Gatwick – Buenos Aires leg flown on 787-9 Dreamliner.

Although Norwegian is promoting the potential to book the entire itinerary (for under £400 or €450 one way), it is not actually bookable as one ticket, but rather as three separate itineraries: from Svalbard (LYR) to Oslo (OSL) and then onwards to London Gatwick (LGW); from London to Buenos Aires (EZE); and from Buenos Aires (AEP) to Ushuaia (USH). It would take three days to make the whole journey from the north to south hemispheres and most travelers are probably not likely to reach both of the spots in one trip, which is why Norwegian acknowledges the journey is for the thrill-seeking travelers and aviation enthusiasts.

 

Source: https://bit.ly/2mZXWxC

Image: Franco Lucato / Shutterstock.com

Airbus-BoeingSouth Seas Aviation

US could be granted $8B tariffs on EU goods in Airbus-Boeing row

The United States is expected to be granted approval by the World Trade Organization (WTO) to impose tariffs on European Union (EU) goods, including aircraft and parts, worth up to $8 billion annually, media reports suggest. The decision would open the next chapter in what has been a 15-year-old aircraft subsidy dispute concerning rival plane makers Boeing and Airbus, in which both the U.S. and the EU have their own separate cases before the WTO.

Arbitrators from the Dispute Settlement Body (DSB) of the global trade watchdog held a meeting in Geneva, Switzerland, on September 30, 2019, to consider measures affecting the dispute over trade of large civil aircraft. The WTO decision concerns the case filed by the United States against the EU and certain EU member States addressing the alleged EU subsidies on large civil aircraft. It is expected the WTO will back the U.S. complaint, granting it the right to impose tariffs on billions of dollars of European goods, as several media reports suggest.

The Office of the United States Trade Representative (USTR) brought forward a proposal on July 1, 2019, specifying new tariffs on EU goods worth approximately $4 billion in commercial value. The wide-ranging list of 89 products could be added to the preliminary proposal that the USRT published on April 12, 2019, concerning EU exports to the U.S. – from food, drink and other items to European-built aircraft and aerospace parts – that would be subject to tariffs worth around $21 billion in annual trade value.

The Trump administration has, in fact, requested to impose tariffs of up to 100% on European exports to the U.S. with a trade value of around $11.2 billion a year, according to a recent report by CNBC. If the favorable ruling were to be confirmed, the WTO would set the amount of European products that the U.S. can target, once it selects the items from the published USTR list.

Most likely not reaching the desired tariff figure, according to sources cited by Reuters, the U.S. could be, however, awarded the right to slap tariffs worth around $7.5 billion annually, a record sum in the history of the WTO, as the news agency points out. Other news media, including Bloomberg, put that figure at $8 billion.

The Impact on Airbus

The proposed list threatens the sustainability of Airbus’ U.S.-based operations, such as the A320 manufacturing facility in Mobile, Alabama, which depends on imported components to build the aircraft. Airbus is also constructing a second assembly line at its Mobile plant, where the first few A220s are already being produced.

The European plane maker states it has purchased $48 billion of components and materials from U.S. suppliers in the last three years since 2019 and sources about 40% of parts from the U.S. across its model range. However, aircraft produced at Mobile are also constructed from sub-assemblies shipped from Europe, particularly, France, Germany, Spain and the UK, the four EU member States being cited in the WTO case.

Airbus CEO Guillaume Faury states the escalating dispute is threatening to damage both parties. “A trade war on aviation would be a lose-lose game because the supply chains are very integrated,” he was quoted as saying in a report by Bloomberg. “We buy a lot in the U.S., we sell in the U.S. and we are a U.S. player as well.”

The rift that keeps on giving

While there are suggestions that the U.S. is poised to win its case before the WTO, likely imposing the duties on EU goods as soon as October 2019, the EU is certainly expected to retaliate, as it pursues its own similar case at the WTO over illegal subsidies allegedly provided to Boeing by the U.S. On April 17, 2019, the European Commission published a preliminary list of U.S. goods (including aircraft, chemicals and food products) it would seek to hit with tariffs. The list would amount to $20 billion of U.S. exports to the EU. A decision by WTO arbitrators on the appropriate level of countermeasures tariffs in that case is expected in 2020.

The WTO has ruled that both Airbus and Boeing received illegal subsidies: the EU was found to have unfairly supported the development of two Airbus programs, the late A380 and the A350, while Boeing is said to have received unjustified tax breaks from the U.S. authorities. Both manufacturers estimate that the subsidies harmed their business by more than $10 billion per year.

 

Source: https://bit.ly/2oa2fXh

Image: Martin Good / Shutterstock.com