European budget airline Ryanair threatens to cancel orders for hundreds of Boeing aircraft as U.S. tariffs imposed make prices higher and is considering alternative suppliers including Chinese planned maker Comac.
Reuters of the News Agency first reported the story on Thursday.
The airline ordered 330 Boeing 737 Max aircraft for more than $30 billion.
Ryanair's chief executive Michael O'Leary said in a letter to an undisclosed senior US lawmaker “If the US government proceeds with its ill-judged plan to impose tariffs, and if these tariffs materially affect the price of Boeing aircraft exports to Europe, then we would certainly reassess both our current Boeing orders, and the possibility of placing those orders elsewhere,” Reuters reported.
If Trump does not exempt his tariff plans, the threat of Europe's largest low-cost airlines and one of Boeing's biggest customers is the latest signal that the global aerospace industry may reorder.
The letter, seen by Reuters, was responding to a warning by Illinois Democrat Raja Krishnamoorthi, who made earlier suggestions on the safety implications of Ryanair's follow-up.
But, as Europe has not yet certified COMAC, and Boeing's main rival Airbus said it may be difficult for Ryanair to follow its threats for the rest of the decade.
O'Leary's letter escalated from previous threats in April, saying the airline will postpone delivery.
He said Boeing executives privately expressed confidence that the planes were exempted from Trump's tariffs.
Aircraft industry sources said Boeing and Airbus contracts do not include any tariff provisions because the industry has not had them for decades, Reuters reported. Once the ownership of the aircraft has been transferred to the procurement airline and the contract has been completed.
Sources say most aircraft purchase contracts include a clause that requires parties to pay their own tax without explicit reference to tariffs. But many aerospace companies are said to be reviewing contract wording for future deals, assuming trade turbulence will last for some time.
In the letter, O'Leary's comments in the letter may be partly tactical interventions, ahead of a tough negotiation with Boeing behind the scenes, the industry source told The Outlet.
O'Leary said in the letter that Irish Airlines has not had any discussion with COMAC about buying aircraft purchases since around 2011, but if they are 10% to 20% cheaper than Boeing's main rival Airbus, then that would be "of course" considered.
Airbus, the only competitor to Boeing's large single-door aircraft currently certified in Europe, has said several times that it sold out for the rest of the decade.
No Western Airlines bought a Comac plane. The Chinese company has applied for its C919 jet certification in Europe, but does not apply in the United States.
The C919 jet has about 150 seats, or about 190 seats in a dense layout, smaller than the Boeing aircraft currently flying, while the maximum 10 seats account for 100 seats, which makes up most of its aircraft orders and can accommodate up to 230.
Ryanair's threat is because Boeing wants to resell dozens of aircraft through tariffs after it resold them through tariffs after it hopes to redeem a third aircraft in the delivery deadlock, which has sparked criticism from Trump of Beijing.
Analysts say airlines rarely cancel aircraft contracts rather than delay delivery because of the small number of suppliers and the risk of returning to the back of the queue to obtain capacity.
According to industry sources and previous court applications, airlines often resist attempts to cancel contracts.