Trump’s aviation tariffs begin to bite: Safety risks, cancelled orders, and higher fares ahead
June 4, 2025
After 45 years of tariff-free trading, the aerospace industry is grappling with a complex and evolving financial landscape that could have far-reaching consequences. Potential increases in aviation tariffs have sparked concern over high fares, cancelled orders and the safety standards of the industry.
Since April this year, the US government has imposed a 10% tariff on aircraft and parts coming from abroad. For goods imported from the EU, a rate of 20% was proposed but was suspended for 90 days, until July 8.
The situation is still evolving. The clock is ticking on the 90-day pause, and an ongoing Section 232 investigation by the Department of Commerce threatens to unlock even costlier levies.
As the industry grapples with these increased costs, cracks in confidence are starting to show. According to ADS, commercial aircraft orders dropped by almost three-quarters in April 2025 compared with the year before. Just 19 orders were placed, versus 64 in 2024.
“April’s orderbook is a telling sign of industry confidence,” says Aimie Stone, Chief Economist at ADS. “The uncertainty caused by tariffs likely continues to delay order decisions, while aircraft manufacturers have begun to re-allocate aircraft to avoid immediate repercussions of new custom duties.”
US airlines warn tariffs could impact air safety
The Aerospace Industries Association (AIA), which represents hundreds of manufacturers and suppliers in aerospace and defence, has expressed significant concerns regarding the safety implications of proposed US aviation tariffs.
In comments submitted to the US Department of Commerce on June 3, the AIA highlighted four key impacts of aviation tariffs:
- Supply chain disruption: The AIA warns that tariffs could delay the procurement of essential components. Such delays could hinder maintenance schedules and timely delivery of new aircraft, potentially compromising safety standards.
- Operational cost increases: Any elevation in the cost of imported parts and materials could strain the budget of airlines and maintenance firms. This brings a risk that maintenance could be deferred, or sub-optimal parts used to save money.
- Workforce impacts: Tariffs that disrupt production and increase costs could lead to workforce reduction. It could also hinder investment in workforce upskilling, impacting the industry’s ability to uphold stringent safety standards.
- Smaller suppliers at risk: Integral to the aerospace supply chain, smaller suppliers will struggle more than most to absorb additional costs. This could lead to lower investment in quality control and safety measures.
The AIA has urged the US government to consider the potential safety implications of tariffs on the aerospace industry. It argues that there is no national security justification for such levies and suggests that, economically, they could do more harm than good.
Spirit Airlines could cancel Airbus orders in light of aviation tariff
Emerging from its Chapter 11 restructuring, Spirit Airlines was hopeful of a future with less debt and more financial flexibility. However, aviation tariff fees that will apply to its Airbus aircraft orders threaten to destabilise the forward plan.
As of the end of March 2025, Spirit has 213 Airbus aircraft in its fleet. These are split between 63 A320s, 29 A321s, 30 A321neos and 91 A320neos.
An all-Airbus fleet is a point of pride for Spirit, and essential to the carrier’s low-cost strategy. It has been working to replace older ceo aircraft with the fuel-saving neos, with 92 A320 family aircraft scheduled for delivery through to 2031.
In its 10Q filing at the end of May, Spirit Airlines stated that, in response to the impact of tariffs:
“We may seek to postpone or cancel delivery of certain aircraft currently scheduled for delivery, and we may choose not to purchase as many aircraft as we intended in the future.”
Should the carrier decide to postpone or cancel its orders for new technology aircraft, it won’t just be Spirit’s bottom line at risk. The neo aircraft brings with it a 15-20% fuel saving over older models, and is a key stepping stone to aviation’s net-zero emissions goal.
The consumer will pay for aviation tariffs
Airlines4America (A4A), the trade association for US airlines, also submitted comments to the Department of Commerce regarding the Section 232 investigation.
Like AIA, it flagged safety concerns, alongside supply chain disruption and threats to the global competitiveness of US airlines. Notably, it stated that any increase in costs to airlines will ultimately be passed on to passengers in the form of higher ticket prices.
Speaking to Bloomberg on the sidelines of the IATA AGM, IATA Director General Willie Walsh stressed the ‘wafer thin’ operating margins of airlines, estimated this year to be around 3.5%. With little room to absorb extra outgoings, he believes the end-user will ultimately bear aviation tariff costs.
“It’s very difficult to absorb all of the cost increases the industry faces,” he said. “Ultimately, consumers will pay, and that’s the reality of it.”
A4A has demanded a 90-day extension to the public comment period of the Section 232 investigation to allow for more input from industry stakeholders. It urges the US government to delay any additional tariffs by 180 days and advocates for the restoration of a tariff-free regimen.
