The price of a Boeing 787 plane could increase by $40 million in a worst case tariff scenario, AerCap CEO Aengus Kelly said.
“In an absolute worst case scenario, say, a 25% increase across the board on tariffs, a tit-for-tat from both sides — a Boeing 787, the price will go up by $40 million,” Kelly said Wednesday on CNBC’s “Squawk Box.” “No one’s going to want to pay that.”
In that kind of scenario, Kelly said most airlines would instead likely turn to Airbus, which could give that company an opportunity to take 75% to 80% of the global market.
AerCap, the world’s largest aircraft leasing company, bought 150 aircraft, helicopters and spare engines last year from Boeing, Kelly added.
Though it’s too early to determine exact impacts of rising tariff tensions, the global economy has been reacting to President Donald Trump’s plans, with the latest addition of 25% tariffs on steel and aluminum imports coming into effect Wednesday, resulting in swift counter-measures from the European Union.
Despite a chaotic year of troubles for Boeing, Kelly said Aercap, which is the biggest buyer of aviation assets in the world, has seen a recent improvement in the quality, reliability and safety of products out of Boeing.
Looking to 2025 for Boeing, Kelly emphasized that what the manufacturer really needs is cash to deliver aircraft reliably. Despite a rocky year for the plane maker, Kelly said he has “never had a hesitation” about getting on a Boeing aircraft and that the company’s manufacturing process has improved considerably.
“Boeing has made tremendous steps in terms of quality, safety and reliability over the last year,” Kelly said. “We see it because we’re on the shop floor buying airplanes every day.”
Kelly also said despite worries of an air travel recession and weaker demand from Delta Air Lines earnings, he remains bullish, with the company continuing to see strong demand overall. The current “soft patch,” he said, has been driven by labor costs.
