Delta's CEO calls U.S. tariff ruling on Bombardier jets 'absurd'

Key Points
  • The U.S. Commerce Department called for duties of close to 220 percent on the jets.
  • Rival Boeing said Canada's Bombardier received government subsidies.
  • Delta had ordered 75 of Bombardier's C-Series jets.
  • Delta says paying that duty would make the planes unaffordable.
Delta Airlines passenger planes
Robert Alexander | Getty Images

The nearly 220 percent tariff the U.S. Commerce Department called for on jets made by Canadian aircraft maker Bombardier would make them unaffordable, the aircrafts' buyer, Delta Air Lines, said Wednesday.

"We think it's absurd," Delta's CEO Edward Bastian told CNBC of the ruling.

The International Trade Commission, part of the Commerce Department, ruled in favor of Boeing Co., Bombardier Inc.'s U.S. rival, in a dispute over the Canadian company's new, fuel-efficient C-series passenger planes, which Delta agreed to buy last year.

Boeing complained that Bombardier sold the planes for millions of dollars less than the $80 million list price thanks to government subsidies and undercut the price of Boeing's single-aisle 737 planes. In a preliminary ruling, the ITC said a duty of 219.63 percent should be applied to the Bombardier planes.

Delta said Boeing does not produce a comparable product to the C-series, and that the U.S. plane-maker had offered used jets as an alternative.

"We don't believe that will be the end of the story," Bastian said.

The trade dispute has reached the U.K., as the jets' wings are manufactured in Northern Ireland. Prime Minister Theresa May said she was "bitterly disappointed" by the ruling.

Delta's CEO said the company will wait for a final ruling next year and said that the 75 Bombardier jets, which are slated for delivery in 2018, will "be our best domestic aircraft."