0827 GMT - Tariffs, excluding any potential exemptions, could weigh on the earnings of European aviation equipment companies next year, Deutsche Bank analyst Christophe Menard says in a research note. However, there is uncertainty about the application of the tariffs, the analyst says. U.S. airlines pay for final products assembled or serviced in Europe, while the U.S. companies that put together the finished systems pay the duty for European subassemblies, but it appears there are no systematic sales contract clauses allowing the costs to be passed on to the end customer. Based on engine and aircraft delivery expectations, DB estimates that tariffs could impact 2026 EBIT by up to 9% for Safran, 6% for MTU, and 4.5% for Airbus. "Rolls-Royce could see a more limited impact, as its U.S.-bound German-built business jet engines' duties would be borne by the buyer." (pierre.bertrand@wsj.com)
(END) Dow Jones Newswires
April 08, 2025 04:27 ET (08:27 GMT)
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