Delta says it won’t pay for US tariffs on Bombardier

NEW YORK (AFP) – Delta Air Lines won’t pay more for Bombardier planes mired in a US-Canada trade dispute, but the controversy could delay delivery of the jets, the airliner’s chief said.

‘’We will not pay those tariffs,’’ said Delta chief executive Ed Bastian, who sharply criticized preliminary penalties announced by President Donald Trump’s administration on Canadian aerospace manufacturer Bombardier.

‘’We will take the aircraft,’’ Bastian told an earnings conference call. ‘’There may be a delay.’’

The comments came just hours ahead of talks between Prime Minister Justin Trudeau and President Donald Trump expected to focus on the aerospace dispute.

Ottawa has taken a tough line following the US move, with Canada suspending talks with American aerospace giant Boeing on an order of fighter jets.

The US Commerce Department has proposed heavy duties on Bombardier’s new CSeries jetliners following a Boeing complaint that the order was significantly underpriced due to more than $3 billion in subsidies from Ottawa and the Quebec government.

A final decision is expected on December 19.

Bastian noted that the tariffs at this point were preliminary and said the airline planned to make its case to US officials. He dismissed Boeing’s arguments as ‘’unrealistic and bit nonsensical.

Bastian said there were ‘’various other options’’ being considered if the US still moves ahead with the penalties, but declined to elaborate.

Delta plans to receive the first of 75 planes from Bombardier in spring 2018.

Meanwhile, Delta reported that third-quarter profit fell 6.4 percent to $1.2 billion, due in part to a $120 million hit from disruptions caused by Hurricane Irma.

Delta Air Lines third-quarter profit fell more than 6 percent to $1.18 billion, partly because Hurricane Irma robbed the company of $140 million in revenue from canceled flights.

The hurricane’s impact was already known, however, so investors are more likely to seize on Delta’s prediction Wednesday that revenue for each seat flown one mile - a closely watched measure of pricing power in the airline business - will rise by up to 4 percent over last year during the fourth quarter.

That forecast comes a day after American Airlines and United Airlines reported that the same key revenue figure would be better than expected in the third quarter, which ended Sept. 30.