Tariffs could lift Boeing and Airbus plane prices even higher

AFP | New York

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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.

"Compared with 2018, prices for commercial jets have risen by around 30 percent," an aviation expert told AFP on condition of anonymity.

The American and European aerospace giants have grappled with higher expenses for primary materials such as titanium, components and energy, as well as overall labor cost pressures.

To resolve a labor strike, Boeing late last year agreed to a new contract with its Seattle-based machinist union that lifted wages by 38 percent 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 items that have inflated "at a particularly high rate" include 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 percent since 2021. That's before Trump's 25 percent tariffs on steel and aluminum, which are used in planes.

"It's kind of ironic, raw materials were not a problem, but Donald Trump is determined to make them a problem," Aboulafia said.

Inflation in aviation has been accelerating, and "that's only going to get worse with these tariffs that are being imposed," agreed John Persinos, editor-in-chief at Aircraft Value News. "These tariffs are disastrous."