Delta Bypasses US Tariffs by Registering Airbus Jets Abroad

Delta Air Lines has adopted an unconventional strategy to avoid US tariffs on European-built Airbus aircraft: stripping engines and routing deliveries through third countries. Under Section 232 of the Trade Expansion Act, new European aircraft entering the United States face a 10% tariff. By registering aircraft first in countries like Japan, Delta reclassifies them as “used” upon entry, thereby circumventing the duty. For example, the Airbus A350-900 (N528DN) was initially registered in Tokyo before joining Delta’s US fleet.

“We will not be paying tariffs on any aircraft deliveries we take,” said CEO Ed Bastian during 1Q25 earnings. The approach saves Delta millions on jets worth between US$200 million and US$300 million and ensures continued access to critical components like LEAP-1A engines from CFM International, while minimizing exposure to trade restrictions and supply shortages.

The airline has also been shipping US-built Pratt & Whitney engines separately from newly assembled Airbus A321neos in Europe. The aircraft are delivered “green”—without engines—and completed after arrival in the United States, another tactic to avoid triggering tariffs.

However, this workaround may soon face regulatory pressure. The US Department of Commerce is considering broadening its Section 232 probe to include engines and components, which could close this loophole. Additionally, rerouting aircraft increases logistics complexity and could delay Delta’s 2025 delivery schedule of 43 Airbus jets, potentially limiting fleet growth to under 1%.

Delta’s strategy is enabled by strong financial footing, with US$9 billion in liquidity as of 1Q25 and long-term orders for 69 A220s, 82 A321neos, and 28 A350s through 2030.

Trade dynamics remain fluid. US-EU negotiations may eliminate the need for such workarounds—or escalate tensions. In the meantime, Delta’s tactics offer a glimpse into how carriers are navigating geopolitical uncertainty.

Despite these efforts, Delta reported Q2 2025 revenue of US$15.51 billion, falling short of analyst expectations (US$16.21 billion), though earnings per share slightly beat projections at US$2.10 versus US$2.06. The airline expects 3Q25 adjusted EPS between US$1.25 and US$1.75. Shares are down 3% this week and nearly 9% year-to-date but remain up 23% over the past 12 months.