AerCap CEO Warns of Steep Boeing Price Hikes Due to Tariffs
So, let’s talk planes! AerCap’s CEO, Aengus Kelly, just dropped some pretty eye-opening news. He warned that in a worst-case scenario involving tariffs, the price of a Boeing 787 could jump by a whopping $40 million. Yikes! That’s some serious cash we’re talking about.
What’s Driving This Price Increase?
In a chat on CNBC’s “Squawk Box,” Kelly laid it all out. He mentioned that if there’s a 25% tariff increase, that’s how high prices could soar. With numbers like that, it’s clear many airlines might think twice before snagging a new Boeing. They could start flocking to Airbus instead, which might mean a pretty big shift in the market.
Here are some key takeaways from Kelly’s update:
- Potential Tariff Impact: An increase could make a Boeing 787 incredibly expensive, pushing airlines to consider other options.
- Market Shift: If costs climb, Airbus might capture 75-80% of the global market, leaving Boeing in the dust.
- Improved Product Quality: Despite challenges in the past year, Kelly noted that AerCap has seen a marked improvement in Boeing’s quality and reliability.
Looking at the Bigger Picture
While things might seem a bit rocky for Boeing with these potential price hikes, there’s also good news. Kelly believes Boeing has ramped up the quality and safety of its products. He’s confident enough that he has “never had a hesitation” about flying on a Boeing aircraft. In fact, he’s been witnessing positive changes firsthand while overseeing aircraft purchases.
Is the air travel market slowing down? Sure, there are some signs like Delta cutting forecasts due to increased labor costs, but overall demand is still strong according to Kelly. He’s optimistic that, while we’re in a “soft patch” right now, the future looks bright.
So, what do you think? Are we headed for a future of sky-high ticket prices, or can Boeing turn things around despite the stormy weather?
