Delta Airlines (Nyse: dal) The first major company was to report results since the tariff war was launched in early April. What her administration said has great effects on the space sector, especially for Boeing (NYSE: Ba).
Here’s what happened and why it is a lot for Boeing investors.
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First, here is a brief summary of the main meals from the first quarter profit call in Delta:
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Revenue increased by 3.3 % on an annual basis, behind the previous management of “closer to 4 %” -a number that has already been reduced from the direction by 7 % -9 % in the profit call in the fourth quarter in January.
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The uncertainty about the global growth resulting from the identification skirmishes of Delta reservations in the first quarter, and the administration refused to update the entire year’s instructions in response to the current market conditions.
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The administration also announced that it would reduce the “expected capacity growth” in the second half in response to slowing down and trying to protect the margins
Frankly, it was expected much of this, because the Delta administration has already told the investors about the slowdown in the customs tariff in March, and the escalation in the commercial conflict has been unlikely to have since caused optimism among investors.
Numbers and no guidance for the whole year one thing, but the administration said something else should be related to investors in Boeing. Quoted by the CEO of Delta Ed Bastian on the profit call, “We will not pay the definitions of any delivery of a plane we take”, and “If you start to develop a 20 % gradual cost at the head of the plane, it will be very difficult to make this sporting work.”
Bastian talks about Airbus Here (it is the only company to manufacture aircraft that expects the delivery delta this year).
The implicit meaning is clear: Either Airbus must share at least part of the cost of customs tariffs (in this case, the customs tariff applied by American definitions to European products) is applied, or there is a risk that will be delayed or canceled.
While Delta responds to the definitions imposed by the United States, the message to Boeing is that non -American airlines can take the same approach to any tariff imposed by other countries and the European Union on American products sold in those countries.
It gets worse. Airbus and Boeing are subject to increased costs due to definitions, either directly from increasing costs from products obtained from the United States and the European Union, or from increased costs of suppliers due to definitions.
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