Ryanair says tariffs are on Boeing, could halt deliveries

Ryanair Holdings Plc said that any tariff cost would be on Boeing Co. to bear, as the Irish budget airline demanded a return to a no-duties regime that has governed the industry for close to half a century.

The discount specialist could go as far as not taking its remaining jets until things have settled down, Chief Financial Officer Neil Sorahan said on Monday in an interview after reporting earnings. Ryanair expects Boeing to deliver the B737-8200 planes, of which 29 are still outstanding, at an agreed fixed price, he added.

“If there are tariffs, it’ll be on Boeing’s account not Ryanair’s,” Sorahan said in a Bloomberg TV interview. “We remain hopeful that sense will prevail.”

With two weeks remaining until a 30% levy on European Union imports to the U.S. kick in on Aug. 1, pressure is rising to reach an agreement or for Brussels to enact countermeasures on U.S. goods. As the biggest U.S. exporter, Boeing is an obvious target, alongside products including U.S. machinery, chemicals and plastics. What’s less clear is who will pay the duties.

Some airlines have warned they won’t be prepared to absorb the cost of tariffs as part of President Donald Trump’s trade war. Delta Air Lines Inc. has even been stripping new Pratt and Whitney engines off Airbus SE aircraft and shipped them back to the U.S. to avoid import fees and to overcome a shortage of aircraft. Airbus, for its part, has also said it won’t carry the cost of any levies into the U.S.

Another way to minimize the disruption from tariffs could be for Ryanair to take aircraft deliveries through its business in the U.K., where there are no surplus fees on Boeing jets following the U.K.-U.S. trade agreement, Chief Executive Officer Michael O’Leary said on a call with analysts. Trump is likely to delay the introduction of tariffs from August until around September or October and any levies that are implemented will be “short-lived,” O’Leary said.

Sorahan said he was pleased to hear Transport Secretary Sean Duffy talk last month at the Paris Air Show about sticking with a deal similar to the 1979 civil aviation agreement, which exempts aircraft and their parts from tariffs.

Ordering from another aircraft manufacturer, such as Airbus or China’s Comac, isn’t as simple because their order books are all full until mid-2030, Sorahan said. Ryanair sources its aircraft exclusively from Boeing for now.

“The difficulty in getting aircraft in the short term is very high,” the CFO said.