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airboeingbus
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Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:11 pm

Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?
 
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Boeing757100
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:13 pm

I have no idea, but I'm happy because at least a Delta plane will be at NRT again, since Delta left in March 28, 2020.
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sassiciai
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:18 pm

airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?

As you said yourself, Delta would only do this if there is some benefit for DL.

Perhaps picking up some freight? I await the explanation with some interest
 
DFW17L
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:25 pm

Kinda like taking delivery of your new BMW in Munich instead of from your friendly neighborhood US-based dealership? Saves $$. I could be guilty of over simplifying things.
 
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enilria
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:28 pm

sassiciai wrote:
airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?

As you said yourself, Delta would only do this if there is some benefit for DL.

Perhaps picking up some freight? I await the explanation with some interest

I highly doubt they can legally do any business with the aircraft until it has been through all the processes that take place on arrival in the USA.

I agree on the tax dodge.
 
Antarius
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:28 pm

airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?


I feel that if there was an economic reason such as avoiding tariffs, we would see this regularly.

Cargo seems like a good guess. I am curious too to learn more.
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zeke
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:29 pm

sassiciai wrote:
Perhaps picking up some freight? I await the explanation with some interest


Maybe even dropping off freight from Europe
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Antarius
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:31 pm

Antarius wrote:
airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?


I feel that if there was an economic reason such as avoiding tariffs, we would see this regularly.

Cargo seems like a good guess. I am curious too to learn more.


I was incorrect - it is a Tax dodge. States they are flying to AMS (N515DN) and NRT(N514DN) to avoid the 15% tariff.

https://airwaysmag.com/airlines/delta-f ... 0-covid19/
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MIflyer12
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:31 pm

airboeingbus wrote:
is this a way to get around the tariffs...


That was asserted in a very recent thread. I don't recall that the source was one I would consider reliable business reporting - NYT, WSJ, Reuters, etc.

The Feds take a pretty dim view of business transactions where the sole benefit is tax avoidance. Check back in five years and see if DL has been taken to court.
 
airboeingbus
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:33 pm

Antarius wrote:
Antarius wrote:
airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?


I feel that if there was an economic reason such as avoiding tariffs, we would see this regularly.

Cargo seems like a good guess. I am curious too to learn more.


I was incorrect - it is a Tax dodge. States they are flying to AMS (N515DN) and NRT(N514DN) to avoid the 15% tariff.

https://airwaysmag.com/airlines/delta-f ... 0-covid19/



Wow, so it is to avoid tariffs, I’m surprised this loophole exists. Do they register it In Japan?
 
Antarius
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:35 pm

airboeingbus wrote:
Antarius wrote:
Antarius wrote:

I feel that if there was an economic reason such as avoiding tariffs, we would see this regularly.

Cargo seems like a good guess. I am curious too to learn more.


I was incorrect - it is a Tax dodge. States they are flying to AMS (N515DN) and NRT(N514DN) to avoid the 15% tariff.

https://airwaysmag.com/airlines/delta-f ... 0-covid19/



Wow, so it is to avoid tariffs, I’m surprised this loophole exists. Do they register it In Japan?


I know, right! :shock:

I'm not sure what the plan is. Given DL doesn't need all their WB capacity, I wonder if they are going to park them in NRT and AMS respectively and wait it out until later. Hopefully someone more well versed in the tariffs can elaborate.
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kavok
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:58 pm

Is this like the cruise ship loophole (PVSA)?
Last edited by kavok on Wed Sep 16, 2020 4:15 pm, edited 5 times in total.
 
0newair0
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 3:59 pm

Yes, Delta takes delivery of non-US produced aircraft subject to tariffs outside of the US and then only flys the aircraft to international markets. This results in the aircraft never being imported to the US and therefore no tariff has to be paid.

Its very simple... No import = no tariff

You can look at flight histories and see that all recent non-US produced aircraft have never flown a domestic US flight.
That's not how this works! That's not how any of this works!
 
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Polot
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:01 pm

kavok wrote:
For those not familiar, this whole saga goes back to when DL bought the Bombardier C-Series on the cheap (Bombardier needed a buyer for its new aircraft concept, and offered DL a great deal to be the launch customer). Boeing threw a fit, sued, and got sympathy from the Trump administration who wanted to encourage US based manufacturing. The executive order (tax) was billed as a way to encourage airlines to buy US manufactured planes (I.e. from Boeing).

This put the DL/C-Series deal on ice. Airbus ended up buying the C-Series from Bombardier, agreed to manufacture enough of the new C-Series planes (now A220s) in Alabama to meet legal requirements, and the tax was avoided and the deal went through.

Despite all this, the executive order remained on the books and thus subsequently applied to new A350s deliveries, which were completely foreign assemblies. As the Trump administration’s tax order was hastily written for A220s, which obviously wouldn’t be exclusively flying international routes like the A350s, there were plenty of loop holes for DL to exploit with the A350 deliveries.

Basically, as long as DL takes the A350 deliveries internationally, and doesn’t fly them on a domestic route for the first 6 months, DL fulfills the requirements of avoiding the tax intended for the A220s. Further, as the tax was essentially implemented by executive order, the rules could change in 2021 should a new administration be elected into the White House. And court action in regards to Delta’s tax avoidance would not likely be decided upon before January 2021 anyway.


Uhh no. The tariff stems from the WHO launch aid subsidy battle, not the C-series situation. Nothing ever came out of that as Boeing was ruled against by US courts.
 
TC957
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:03 pm

Seems to me that if this is really for a tax dodge, then how come not more airlines have cottoned on to this. Perhaps as Zeke says, it may have a couple of boxes on board thus qualifying as a " cargo " flight . If that makes any difference.
 
danipawa
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:07 pm

very smart..
 
atlflyer
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:12 pm

N515DN is also on the move in TLS. Wonder if it’s headed to NRT later as well?
 
0newair0
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:15 pm

TC957 wrote:
Seems to me that if this is really for a tax dodge, then how come not more airlines have cottoned on to this. Perhaps as Zeke says, it may have a couple of boxes on board thus qualifying as a " cargo " flight . If that makes any difference.
It does not make a difference. The fact that these aircraft will not fly domestic US flights and therefore are not imported to the US is the only factor.
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SwissCanuck
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:19 pm

atlflyer wrote:
N515DN is also on the move in TLS. Wonder if it’s headed to NRT later as well?


AMS, if you RTFA :)
 
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KrustyTheKlown
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:24 pm

The *not flying domestic for 6 months* loophole sounds like BS.

Is not like Delta ever intended to fly A350 in domestic routes anyway.
 
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par13del
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:27 pm

Polot wrote:
kavok wrote:
For those not familiar, this whole saga goes back to when DL bought the Bombardier C-Series on the cheap (Bombardier needed a buyer for its new aircraft concept, and offered DL a great deal to be the launch customer). Boeing threw a fit, sued, and got sympathy from the Trump administration who wanted to encourage US based manufacturing. The executive order (tax) was billed as a way to encourage airlines to buy US manufactured planes (I.e. from Boeing).

This put the DL/C-Series deal on ice. Airbus ended up buying the C-Series from Bombardier, agreed to manufacture enough of the new C-Series planes (now A220s) in Alabama to meet legal requirements, and the tax was avoided and the deal went through.

Despite all this, the executive order remained on the books and thus subsequently applied to new A350s deliveries, which were completely foreign assemblies. As the Trump administration’s tax order was hastily written for A220s, which obviously wouldn’t be exclusively flying international routes like the A350s, there were plenty of loop holes for DL to exploit with the A350 deliveries.

Basically, as long as DL takes the A350 deliveries internationally, and doesn’t fly them on a domestic route for the first 6 months, DL fulfills the requirements of avoiding the tax intended for the A220s. Further, as the tax was essentially implemented by executive order, the rules could change in 2021 should a new administration be elected into the White House. And court action in regards to Delta’s tax avoidance would not likely be decided upon before January 2021 anyway.


Uhh no. The tariff stems from the WHO launch aid subsidy battle, not the C-series situation. Nothing ever came out of that as Boeing was ruled against by US courts.

Interesting that this is not the other side of the same coin.
So my comment is here we have another big business refusing to pay their fair share of tax, bummer.
 
x1234
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:43 pm

I do have to say DL planners/legal are pretty smart finding loopholes in US law.
 
Antarius
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:51 pm

KrustyTheKlown wrote:
Is not like Delta ever intended to fly A350 in domestic routes anyway.


Airlines fly repositioning flights between hubs all the time. So in this case, they don't have the option.
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amstone17
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:53 pm

airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?



For these kinds of contracts, something as simple as a delivery route to change import tax rules wouldn't apply.

The most you saw stuff like this was while Denmark (I think) still had super low import taxes on things like GA aircraft, so lots of European customers were taking advantage and ferrying through Denmark to avoid higher taxes elsewhere in Europe. That would not apply to Delta or their delivery routes. They aren't importing and registering the aircraft in Japan.
 
Antarius
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:54 pm

SwissCanuck wrote:
atlflyer wrote:
N515DN is also on the move in TLS. Wonder if it’s headed to NRT later as well?


AMS, if you RTFA :)


:)

Slated to leave soon: https://flightaware.com/live/flight/N515DN
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Nicoeddf
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:54 pm

par13del wrote:
Polot wrote:
kavok wrote:
For those not familiar, this whole saga goes back to when DL bought the Bombardier C-Series on the cheap (Bombardier needed a buyer for its new aircraft concept, and offered DL a great deal to be the launch customer). Boeing threw a fit, sued, and got sympathy from the Trump administration who wanted to encourage US based manufacturing. The executive order (tax) was billed as a way to encourage airlines to buy US manufactured planes (I.e. from Boeing).

This put the DL/C-Series deal on ice. Airbus ended up buying the C-Series from Bombardier, agreed to manufacture enough of the new C-Series planes (now A220s) in Alabama to meet legal requirements, and the tax was avoided and the deal went through.

Despite all this, the executive order remained on the books and thus subsequently applied to new A350s deliveries, which were completely foreign assemblies. As the Trump administration’s tax order was hastily written for A220s, which obviously wouldn’t be exclusively flying international routes like the A350s, there were plenty of loop holes for DL to exploit with the A350 deliveries.

Basically, as long as DL takes the A350 deliveries internationally, and doesn’t fly them on a domestic route for the first 6 months, DL fulfills the requirements of avoiding the tax intended for the A220s. Further, as the tax was essentially implemented by executive order, the rules could change in 2021 should a new administration be elected into the White House. And court action in regards to Delta’s tax avoidance would not likely be decided upon before January 2021 anyway.


Uhh no. The tariff stems from the WHO launch aid subsidy battle, not the C-series situation. Nothing ever came out of that as Boeing was ruled against by US courts.

Interesting that this is not the other side of the same coin.
So my comment is here we have another big business refusing to pay their fair share of tax, bummer.


Well, no. They are paying their taxes but avoid on (in my view senseless) tariffs.

Hard to see any beneficiary in the whole tariff saga as of late between the different countries anyway.
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PhilMcCrackin
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:55 pm

x1234 wrote:
I do have to say DL planners/legal are pretty smart finding loopholes in US law.


That's pretty common in the industry when it comes to taxes and tariffs on new aircraft purchases. The company I work for is based in state A which also has a use tax levied on aircraft. We purchased a new Challenger from the manufacturer and immediately parked it in state B that doesn't have a tax owned by a shell company that we set up. After three months, we moved the aircraft home to state A and were able to dodge the use tax in our home state because it wasn't considered a new purchase from the manufacturer. It's all completely legal and it saved us over a million bucks. I suspect DL is doing something similar here with temporarily basing the aircraft in Japan to beat the tariffs.
 
MIflyer12
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:57 pm

KrustyTheKlown wrote:
The *not flying domestic for 6 months* loophole sounds like BS.

Is not like Delta ever intended to fly A350 in domestic routes anyway.


DL has operated both 77Ls and A350s in scheduled service ATL-DTW - not just type familiarity flights. Not being able to operate domestic routes imposes some restrictions on routing, especially out of domestic origins that don't have pilot bases for the respective type. I guess they chose to live with it.
 
GalaxyFlyer
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 4:58 pm

amstone17 wrote:
airboeingbus wrote:
Delta is currently taking delivery of an A350 N514DN the plane is flying now (DL9975) you’d expect this to go from TLS to ATL right? No, it’s going to NRT instead. This seems very unusual and uneconomical unless there’s a benefit for DL, is this a way to get around the tariffs or is there a genuine reason for taking it to NRT?



For these kinds of contracts, something as simple as a delivery route to change import tax rules wouldn't apply.

The most you saw stuff like this was while Denmark (I think) still had super low import taxes on things like GA aircraft, so lots of European customers were taking advantage and ferrying through Denmark to avoid higher taxes elsewhere in Europe. That would not apply to Delta or their delivery routes. They aren't importing and registering the aircraft in Japan.


Yes, bizjets do it if they plan to fly internal EU flights with EU passengers.
 
MIflyer12
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:01 pm

Polot wrote:
Uhh no. The tariff stems from the WHO launch aid subsidy battle, not the C-series situation. Nothing ever came out of that as Boeing was ruled against by US courts.


I believe you are correct. The current tariffs on foreign-assembled Airbus products is the WTO-authorized retaliation for the long-litigated launch aid dispute.

10% - https://www.cnbc.com/2019/10/02/us-to-i ... l-pay.html

raised to 15% - https://www.ainonline.com/aviation-news ... 15-percent
 
ytib
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:02 pm

All airlines know how to get around additional taxes. Back in the mid-2000's Frontier wouldn't accept delivery of new aircraft in Denver to avoid around $1.3 million in taxes by the City of Denver. Instead they would put them into service in Phoenix.
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:13 pm

airboeingbus wrote:
Wow, so it is to avoid tariffs, I’m surprised this loophole exists. Do they register it In Japan?

Pay the right bribes, I mean campaign contributions to the right congress critter and you can basically write the loophole yourself.
 
PANAMsterdam
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:15 pm

DFW17L wrote:
Kinda like taking delivery of your new BMW in Munich instead of from your friendly neighborhood US-based dealership? Saves $$. I could be guilty of over simplifying things.


That would be nice for me, as a Dutch person living next door to Germany, but then I would still have to pay 21% Dutch VAT after I've already paid the 19% German VAT.

That's why you see so many bicycles here I think :lol:
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MO11
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:17 pm

TC957 wrote:
Seems to me that if this is really for a tax dodge, then how come not more airlines have cottoned on to this. Perhaps as Zeke says, it may have a couple of boxes on board thus qualifying as a " cargo " flight . If that makes any difference.


Which is exactly what AA did with the Fokker 100s
 
raylee67
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:27 pm

0newair0 wrote:
Yes, Delta takes delivery of non-US produced aircraft subject to tariffs outside of the US and then only flys the aircraft to international markets. This results in the aircraft never being imported to the US and therefore no tariff has to be paid.

Its very simple... No import = no tariff

You can look at flight histories and see that all recent non-US produced aircraft have never flown a domestic US flight.


This is a very weird loophole. Even to fly international flights, the plane will touch down in US, since the flights are essentially from a US city to an international destination (e.g. ATL-CDG). So the moment the plane lands in US, it doesn't count as an import? The planes have US registrations too.
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raylee67
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:30 pm

Antarius wrote:
KrustyTheKlown wrote:
Is not like Delta ever intended to fly A350 in domestic routes anyway.


Airlines fly repositioning flights between hubs all the time. So in this case, they don't have the option.


Well, Delta can just add a Canadian or Mexican stop-over in such re-positioning flights, with a change of flight number at the stop-over airport e.g. DL 1 ATL-YWG, then DL 2 YWG-MSP. Not a big deal.
319/20/21 332/33 342/43/45 359/51 388 707 717 732/36/3G/38/39 74R/42/43/44/4E/48 757 762/63 772/7L/73/7W 788/89 D10 M80 135/40/45 175/90 DH1/4 CRJ/R7 L10
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zeke
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:39 pm

TC957 wrote:
Seems to me that if this is really for a tax dodge, then how come not more airlines have cottoned on to this..


I think jurisdictional convenience of transaction are very widespread with large assets. Heard stories of aircraft transactions completing while the aircraft was outside the territory of a country to avoid taxes. Many of these sale and lease back deals you see the banks would own the aircraft via a tax free shell company.



MIflyer12 wrote:

I believe you are correct. The current tariffs on foreign-assembled Airbus products is the WTO-authorized retaliation for the long-litigated launch aid dispute.

10% - https://www.cnbc.com/2019/10/02/us-to-i ... l-pay.html

raised to 15% - https://www.ainonline.com/aviation-news ... 15-percent


I heard that EU tarrifs on US goods will be starting soon. There were two cases, one the US vs the EU and the second EU vs US, they are about 12 months apart.
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PSU.DTW.SCE
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:49 pm

DTW-YYZ-ATL repositioning flights?
 
0newair0
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:51 pm

raylee67 wrote:
0newair0 wrote:
Yes, Delta takes delivery of non-US produced aircraft subject to tariffs outside of the US and then only flys the aircraft to international markets. This results in the aircraft never being imported to the US and therefore no tariff has to be paid.

Its very simple... No import = no tariff

You can look at flight histories and see that all recent non-US produced aircraft have never flown a domestic US flight.


This is a very weird loophole. Even to fly international flights, the plane will touch down in US, since the flights are essentially from a US city to an international destination (e.g. ATL-CDG). So the moment the plane lands in US, it doesn't count as an import? The planes have US registrations too.


If that were the case then everytime an airline flew into another country they would have to import their aircraft.

Country of registration doesn't really matter. Banks and lessors have aircraft registered in counties outside of the aircraft's main base of operations all the time.
That's not how this works! That's not how any of this works!
 
Ordie
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 5:56 pm

Does Delta still retain 5th Freedom rights from Japan? In theory they can base the aircraft from that country.
 
avi8
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:02 pm

Besides these 2 A350s, how many more is DL going to get this year?
avi8
 
trees
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:06 pm

raylee67 wrote:
Antarius wrote:
KrustyTheKlown wrote:
Is not like Delta ever intended to fly A350 in domestic routes anyway.


Airlines fly repositioning flights between hubs all the time. So in this case, they don't have the option.


Well, Delta can just add a Canadian or Mexican stop-over in such re-positioning flights, with a change of flight number at the stop-over airport e.g. DL 1 ATL-YWG, then DL 2 YWG-MSP. Not a big deal.


Is it worth putting extra cycles on the airframe to avoid some tax? Sounds like a dodgy idea.

Surely positioning flights would be exempt as international airlines for various irrops reasons can conduct repo flights within the US without having to import the aircraft.
 
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sjones1975
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:08 pm

DFW17L wrote:
Kinda like taking delivery of your new BMW in Munich instead of from your friendly neighborhood US-based dealership? Saves $$. I could be guilty of over simplifying things.


That analogy would make more sense if a350s were assembled in Japan. A better analogy would be like an American buying a BMW, but instead of picking it up from his friendly neighborhood dealership, taking deliver far away in Seoul! ;-) You'd have to have some sort of reason to do that.

Is it possible Delta is getting some interior items installed post-delivery from a shop in Asia?
my longest flight in a 757: FRU-ADA-SNN-BWI
 
catiii
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:16 pm

Bricktop wrote:
airboeingbus wrote:
Wow, so it is to avoid tariffs, I’m surprised this loophole exists. Do they register it In Japan?

Pay the right bribes, I mean campaign contributions to the right congress critter and you can basically write the loophole yourself.


Which would be accurate except a) Congress had nothing to do with the tariffs; b) the Airbus tariffs are solely implemented by the Trump administration through executive action and outside Congress; and c) the Trump administration has little to no love for Delta...
 
catiii
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Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:18 pm

As I recall DL was taking the LATAM 350s (pre Covid) as a work around to paying the tariff as well. LATAM takes delivery, then sells them used to DL.
 
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ADent
Posts: 1123
Joined: Fri Dec 22, 2006 12:11 pm

Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:21 pm

DL has been doing this for awhile - I saw it mentioned here about an A321 doing ATL-YYZ.

A google search turned up a blog post about N389DN that was delivered in February.

They also noted A339 N405DX that hasn’t done any domestic legs.
 
LAXffDUB
Posts: 49
Joined: Mon Jun 20, 2016 7:05 pm

Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:28 pm

raylee67 wrote:
0newair0 wrote:
Yes, Delta takes delivery of non-US produced aircraft subject to tariffs outside of the US and then only flys the aircraft to international markets. This results in the aircraft never being imported to the US and therefore no tariff has to be paid.

Its very simple... No import = no tariff

You can look at flight histories and see that all recent non-US produced aircraft have never flown a domestic US flight.


This is a very weird loophole. Even to fly international flights, the plane will touch down in US, since the flights are essentially from a US city to an international destination (e.g. ATL-CDG). So the moment the plane lands in US, it doesn't count as an import? The planes have US registrations too.


Isn't it a bit odd for them to be getting US registrations?
 
mcg
Posts: 1097
Joined: Tue Sep 16, 2003 11:49 am

Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:32 pm

So.. for many years Boeing delivered aircraft in Montana to avoid a Washington tax, eventually Washington got the hint and changed their tax.

This whole thing simply illustrates what an economics professor said a long time ago, "tariffs are stupid".
 
FluidFlow
Posts: 726
Joined: Wed Apr 10, 2019 6:39 am

Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:35 pm

The EU has an FTA with Japan so importing the aircraft into Japan will be tax free. So if it will be registered in Japan and then transfered to the USA it maybe will count as an import from Japan.
How long will it have to be sitting in Japan before it can be imported as a Japanese aircraft?
Under normal circumstances you probably lose out too much revenue by parking it for so long if you need it but right now that is of no concern.
 
catiii
Posts: 3611
Joined: Mon Mar 31, 2008 1:18 am

Re: Is DL taking delivery of A350’s from NRT to avoid tariffs?

Wed Sep 16, 2020 6:52 pm

FluidFlow wrote:
The EU has an FTA with Japan so importing the aircraft into Japan will be tax free. So if it will be registered in Japan and then transfered to the USA it maybe will count as an import from Japan.
How long will it have to be sitting in Japan before it can be imported as a Japanese aircraft?
Under normal circumstances you probably lose out too much revenue by parking it for so long if you need it but right now that is of no concern.


Im not sure specifically how the tariff works, but it may not have to be registered in Japan but the transaction has to close in Japan through a HoldCo or third party.

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