Aircraft Orders & Deliveries
Impact of US Tariffs on Aircraft Deliveries and Aviation Industry
US tariffs on Brazilian aerospace exports threaten aircraft deliveries and cost increases, impacting Embraer, Airbus, Boeing, and the global aviation sector.
The Impact of Tariff Uncertainty on Aircraft Deliveries: An Analysis of IATA’s Warning
Airlines worldwide are facing a new wave of uncertainty that could significantly reshape the aviation industry’s recovery trajectory. According to the International Air Transport Association (IATA), the potential imposition of tariffs, particularly by the United States on Brazilian exports, has generated enough concern to prompt carriers to reconsider or delay aircraft deliveries. The implications of such policy shifts are far-reaching, affecting not only aircraft manufacturers like Embraer, Airbus, and Boeing, but also the broader aerospace supply chain and global air travel demand.
This development comes at a critical moment. The aviation industry is still navigating post-pandemic recovery, supply chain disruptions, and fluctuating fuel prices. IATA Director-General Willie Walsh’s recent remarks highlight the gravity of the situation, suggesting that tariff-related uncertainty could undermine long-term planning and investment across the sector. The possibility of increased aircraft costs due to tariffs adds a layer of complexity to already fragile procurement and production ecosystems.
In this article, we explore the context and consequences of these emerging trade tensions, focusing on the potential impact on aircraft deliveries, airline operations, and the broader aerospace industry. We also examine historical precedents and expert opinions to assess the risks and possible solutions.
U.S. Tariffs and the Embraer Case
Tariff Policy and Its Immediate Implications
In July 2025, the U.S. government announced its intention to impose 50% tariffs on Brazilian exports starting in August. This policy directly affects Embraer, Brazil’s flagship aircraft manufacturer and one of the world’s leading producers of regional jets. The tariffs are part of a broader U.S. strategy to promote domestic manufacturing, but their blanket application to aerospace goods has sparked widespread concern.
Embraer’s CEO, Francisco Gomes Neto, has been vocal about the potential consequences. He warned that the tariffs could lead to significant revenue losses, potentially mirroring the financial impact experienced during the COVID-19 pandemic. In 2020, Embraer saw a revenue drop of approximately $4.3 billion. Neto described the tariffs as a “trade embargo,” highlighting the risk of order cancellations and deferred deliveries, especially from U.S.-based airlines that constitute a significant portion of Embraer’s customer base.
Beyond Embraer, the tariffs could disrupt supply chains and production schedules, affecting a wide range of suppliers and partners in the U.S. and elsewhere. The uncertainty surrounding final aircraft costs complicates procurement decisions for airlines, many of which are already operating under tight financial constraints.
“The tariffs would amount to a trade embargo,” said Embraer CEO Francisco Gomes Neto. “We are at risk of order cancellations and deferred deliveries.”
IATA’s Industry-Wide Warning
Speaking at a media roundtable in Singapore on July 16, 2025, IATA Director-General Willie Walsh emphasized that the issue extends far beyond one company or country. “It’s not just going to be a major Boeing and Airbus issue,” Walsh said. “It’ll impact all aspects of the aerospace industry and have an impact on most, if not all, airlines as well.”
Walsh highlighted how tariff uncertainty creates a challenging environment for fleet planning. Airlines, unsure of the final cost of aircraft under new trade rules, may choose to delay or cancel deliveries. This hesitation could stall capacity expansion plans and affect route development, particularly in markets heavily reliant on regional jets like those produced by Embraer.
According to IATA’s economic analysis, if the tariffs are implemented as proposed, global aircraft deliveries could decline by 4–6% in 2025. This would translate to an estimated $18 billion in lost revenue across the aerospace industry, compounding existing challenges related to labor shortages, fuel price volatility, and supply chain disruptions.
Historical Context: Trade Disputes and Aviation
The Airbus-Boeing WTO Dispute
The aviation industry has long been vulnerable to geopolitical and trade-related tensions. One of the most notable examples is the Airbus-Boeing dispute, which began in 2004 and spanned over 17 years. The conflict centered on allegations of illegal subsidies provided by both the U.S. and the EU to their respective aircraft manufacturers.
In 2019, the U.S. imposed $7.5 billion in tariffs on EU goods, including aircraft, after the World Trade Organization (WTO) ruled against Airbus. The EU responded in 2020 with $4 billion in tariffs targeting U.S. products, including Boeing aircraft. Although a truce was reached in 2021, temporarily suspending the tariffs, the episode demonstrated how trade disputes can escalate quickly and disrupt global supply chains.
The Airbus-Boeing case set a precedent for using tariffs as tools of political leverage, rather than strictly economic measures. This has contributed to a climate of uncertainty in aerospace, where long-term investments and production planning are increasingly complicated by the potential for sudden regulatory changes.
Lessons from the COVID-19 Pandemic
The pandemic revealed the fragility of global aerospace supply chains. In 2020, global passenger traffic plummeted by 94% in April alone, and the industry recorded losses exceeding $370 billion. Airlines responded by deferring approximately 35% of planned aircraft deliveries in 2020 and 2021.
This experience highlighted the risks of over-reliance on just-in-time manufacturing and globally dispersed production networks. Tariffs, by increasing costs and introducing delays, could replicate similar disruptions by making it harder to source essential components like engines, avionics, and composite materials.
As a result, both manufacturers and airlines are now more cautious. Many are exploring ways to localize production or diversify suppliers to mitigate future risks, though such strategies require significant time and investment to implement effectively.
Production and Delivery Challenges
Airbus and Boeing Under Pressure
Airbus and Boeing, the world’s two largest aircraft manufacturers, are already grappling with production challenges in 2025. Airbus aims to deliver 820 aircraft this year but had only managed 306 by the end of June. To meet its target, the company would need to deliver over 85 aircraft per month for the rest of the year, a pace it has never achieved.
The A320neo program, a cornerstone of Airbus’s narrowbody strategy, averaged just 39 deliveries per month in the first half of 2025, well below the 50-per-month target. Widebody programs like the A350 are also lagging due to shortages in engines and composite materials. Airbus’s backlog now stands at 8,742 aircraft, equivalent to over 10 years of production at current rates.
Boeing, meanwhile, delivered 280 aircraft in the first half of 2025. Its backlog of 6,581 aircraft is dominated by the 737 MAX, which accounts for 74% of orders. The company faces additional scrutiny following investigations into a recent Air India 787 incident, and any tariff-related cost increases could further delay production and delivery schedules.
Conclusion
The aviation industry stands at a critical juncture. The potential introduction of new tariffs, particularly those targeting Brazilian aerospace exports, threatens to derail recovery efforts and introduce new layers of complexity into aircraft procurement and production. IATA’s warning underscores the systemic nature of the threat, which could affect manufacturers, airlines, suppliers, and even passengers through higher costs and reduced service availability.
Looking ahead, the industry may need to adapt by exploring alternative sourcing strategies, advocating for sector-specific trade exemptions, and enhancing financial resilience. Policymakers, meanwhile, face the challenge of balancing domestic economic goals with the need to maintain a stable and predictable global trade environment. Only through coordinated action can the aviation sector avoid a prolonged period of disruption and uncertainty.
FAQ
Why are airlines reconsidering aircraft deliveries?
Due to uncertainty over potential U.S. tariffs on Brazilian aircraft, which could significantly increase costs and complicate procurement planning.
What impact could the tariffs have on Embraer?
Embraer may face order cancellations and deferred deliveries, with revenue losses potentially comparable to those experienced during the COVID-19 pandemic.
How are Airbus and Boeing affected?
Both manufacturers are already behind their 2025 delivery targets and face additional challenges from supply chain constraints and potential tariff-related cost increases.
Has the aviation industry faced similar issues before?
Yes, notably during the Airbus-Boeing WTO dispute and the COVID-19 pandemic, both of which disrupted production and deliveries.
Sources
Photo Credit: AirPro News
Aircraft Orders & Deliveries
FAA Certifies Boeing 737 MAX 10 for Commercial Service
The FAA issued the type certificate for the Boeing 737 MAX 10 on Oct. 20, 2026, completing the MAX family certification.
The Federal Aviation Administration (FAA) has officially issued the amended type certificate and updated Production Limitation Record for the Boeing 737 MAX 10, clearing the largest variant of the narrowbody family for commercial service and production.
The October 20, 2026, certification marks the conclusion of a years-long regulatory review process and completes the certification of the entire 737 MAX family. In a press release issued today, Alaska Airlines (AS) welcomed the milestone, noting the aircraft is a critical component of its long-term fleet strategy and planned premium transcontinental services.
Regulatory approval and safety enhancements
The certification of the Boeing 737 MAX 10 (737-10) follows an extensive testing and review period. According to Boeing, the certification program included approximately 1,000 test flights and 2,060 total flight test hours.
The regulatory path for the 737-10 was significantly extended following the two fatal crashes of the 737 MAX 8 in 2018 and 2019, which resulted in heightened regulatory scrutiny and new legislative requirements. The 737-10 is the first commercial airplane certified to the full extent of the 2020 Aircraft Certification, Safety, and Accountability Act (ACSAA).
To meet requirements set by the FAA and the National Transportation Safety Board (NTSB), Boeing incorporated key safety improvements into the aircraft. These include updates to the flight-control system featuring an enhanced angle of attack (AOA) sensor. This enhanced AOA system will become standard across the entire 737 MAX family.
U.S. Transportation Secretary Sean P. Duffy highlighted the rigor of the process in an official statement.
“After extensive safety reviews, including thousands of hours of test flights, the team at the FAA is ready to approve this critical aircraft for sale. This is a major win for American manufacturing and our nation’s status as a global aviation powerhouse.”
FAA Administrator Bryan Bedford confirmed that the agency will maintain strict oversight as the manufacturer transitions to the next phase. Bedford stated that the decision follows a thorough review of the design and safety requirements of the aircraft, adding that the FAA will continue to hold Boeing to the highest safety standards as production begins.
Alaska Airlines targets premium transcontinental routes
For Alaska Airlines, the certification unlocks a new phase of fleet modernization and route expansion. The Seattle-based carrier has positioned the 737-10 as the foundation for its upcoming premium transcontinental service.
During its Analyst and Investor Day on September 29, 2026, Alaska Airlines revealed its strategy to deploy the MAX 10 on high-demand, long-haul domestic routes. The airline plans to configure these aircraft with a four-cabin layout featuring 12 lie-flat suites and at least 45 percent premium seating. The carrier intends to use a minimum of 25 MAX 10 aircraft to launch this service.
Ben Minicucci, Chief Executive Officer of Alaska Air Group, emphasized the importance of the regulatory milestone for the carrier.
“The MAX 10 is an important part of Alaska’s long-term fleet strategy and our future.”
Boeing’s competitive positioning in the narrowbody market
Introduced at the 2017 Paris Air Show, the 737-10 was designed to compete directly with the Airbus A321neo in the high-capacity, long-range single-aisle segment. The aircraft features a maximum passenger seating capacity of 230 and offers an additional 365 nautical miles of range compared to competitors without auxiliary fuel tanks.
The narrowbody market remains highly competitive, with the Airbus A321neo currently holding a dominant position in the high-capacity space. The certification of the MAX 10 allows Boeing to offer a direct competitor with claimed advantages in per-seat economics.
Stephanie Pope, President and Chief Executive Officer of Boeing Commercial Airplanes, stated that completing the certification program clears the path for the manufacturer to deliver an airplane that sets a new standard in commercial aviation. Pope noted that the 737-10 offers greater capacity, longer range, and the best seat economics in its class.
The MAX 10 accounts for a significant portion of Boeing’s narrowbody backlog. The variant represents 30 percent of the current 737 MAX program order book, with 1,555 total orders from more than 30 customers globally.
The October 20, 2026, approval follows the certification of the smaller 737-7 variant in August 2026, finalizing the regulatory approvals for the four main variants of the MAX family. Boeing expects to begin delivering the 737-10 to airline customers in the coming months, with the first aircraft projected to enter commercial service in 2027.
AirPro News analysis
The certification of the 737-10 is a critical inflection point for Boeing as it seeks to stem market share losses to the Airbus A321neo. While the A321neo has established a formidable lead in the high-capacity single-aisle segment, the MAX 10 provides Boeing operators with a high-density alternative that maintains crucial fleet commonality and reduces pilot transition costs.
For carriers like Alaska Airlines, the aircraft enables a strategic shift toward premium-heavy configurations that were previously difficult to justify on smaller airframes. The ability to install 12 lie-flat suites while maintaining favorable seat economics allows domestic operators to compete more aggressively on lucrative transcontinental routes, potentially altering the competitive dynamics among major U.S. carriers.
Photo Credit: Bo
Aircraft Orders & Deliveries
Embraer Delivers First RECARO-Equipped E175 to American Airlines
Embraer delivered the first E175 with new RECARO seats to American Airlines on October 19, 2026, in São José dos Campos.
Embraer has delivered the first Embraer E175 regional jet equipped with new-generation RECARO passenger seats to American Airlines. The handover marks a tangible step in the carrier’s broader initiative to align its regional cabin experience with its mainline fleet.
The October 19, 2026, delivery from Embraer’s facility in São José dos Campos, Brazil, introduces an updated interior designed to maximize personal space and knee room. According to the manufacturer’s press release, the seating upgrade brings the E175’s main cabin environment closer to the standards of the newer Embraer E2 family.
Upgrading the regional cabin environment
The integration of RECARO Aircraft Seating products into the E175 platform represents a shift in how airlines approach regional jet interiors. While Embraer’s official communications refer generally to new-generation RECARO passenger seats, aviation industry observers note the released images suggest the installation of the RECARO R2 model. The primary focus of the redesign is optimizing the available cabin footprint to enhance passenger comfort on shorter feeder routes.
American Airlines is the first United States-based carrier to introduce RECARO seating on the Embraer E175. The airline views the cabin update as a critical component of its customer service strategy, aiming to eliminate the historical disparity in comfort between regional and mainline flights.
“As the first U.S. airline to introduce RECARO seats on Embraer E175 aircraft, we’re continuing to raise the bar for regional travel,” said Rhonda Crawford, Senior Vice President of Customer Experience Design and Strategy at American Airlines. “Our goal is to deliver the elevated experience customers want, while creating greater consistency across the American travel experience.”
American Airlines’ fleet modernization strategy
The delivery follows a significant fleet commitment made by American Airlines earlier in the decade. On March 4, 2024, the carrier placed a firm order for 90 Embraer E175 aircraft, configured with 76 seats in a dual-class layout. The agreement also included purchase rights for an additional 43 jets.
This procurement strategy was designed to phase out the airline’s aging 50-seat, single-class regional jets by the end of the decade. Replacing these older airframes with larger, dual-class E175s allows American Airlines to offer premium seating options and better match the capacity and comfort levels expected by passengers connecting to mainline flights.
Building on the aircraft order, American Airlines announced a comprehensive regional fleet cabin modernization program on September 30, 2025. The phased rollout includes refreshed interiors, the installation of fast Wi-Fi, and the addition of in-seat power across its regional network. The newly delivered RECARO-equipped E175 is the first direct realization of this interior refresh initiative.
The enduring market position of the E175
Despite the introduction of the newer Embraer E2 family, the first-generation E175 remains a cornerstone of the North American regional aviation market. Embraer continues to invest heavily in the legacy platform to ensure it meets contemporary operational and passenger expectations.
Recent upgrades to the E175 program include enhanced data connectivity, next-generation weather radar systems, and the revised cabin interiors seen in the American Airlines delivery. These continuous improvements are intended to keep the aircraft competitive and reliable for operators.
“The E175 has built an unmatched reputation by continuously evolving to meet the needs of airlines and passengers,” said Arjan Meijer, President and CEO of Embraer Commercial Aviation. “The introduction of our new RECARO seats demonstrates our commitment to investing in the platform and delivering enhancements that improve passenger experience while creating additional value for operators.”
The sustained demand for the E175 in the United States is largely driven by pilot union scope clauses. These contractual agreements restrict the operation of heavier, higher-capacity aircraft by regional airline affiliates. The E175 fits precisely within these regulatory and contractual boundaries, making it the benchmark regional jet for U.S. network carriers.
Embraer, founded in 1969 and headquartered in Brazil, has delivered over 9,000 aircraft across its commercial, executive, defense, and agricultural divisions. The company maintains its position as the leading global manufacturer of commercial jets with a capacity of up to 150 seats.
Photo Credit: Embraer
Aircraft Orders & Deliveries
ACG Orders 75 Airbus A320neo Family Aircraft for 2032-2035
Aviation Capital Group places its largest-ever order, 75 A320neo Family jets, bringing total A320neo commitments to 190 aircraft.
Aviation Capital Group (ACG) has finalized a firm order for 75 Airbus A320neo Family aircraft, securing delivery slots between 2032 and 2035 in the largest single transaction in the lessor’s nearly 40-year history.
The agreement, announced in a press release on October 16, 2026, brings the Newport Beach, California-based company’s total historical commitments for the A320neo Family to 190 aircraft. The order provides ACG with conversion rights across the aircraft family, allowing the lessor to adapt its portfolio to shifting airline demand over the next decade.
Securing narrowbody capacity into the 2030s
The 75-aircraft commitment significantly expands ACG’s backlog with the European manufacturer. Following this transaction, the lessor holds 115 outstanding orders for the A320neo Family. As of June 30, 2026, ACG reported 118 A320neo Family aircraft in its active fleet.
Thomas Baker, Chief Executive Officer and President of Aviation Capital Group, stated that the company’s portfolio strategy focuses on new-technology narrowbody aircraft that are most in demand with airlines globally. He characterized the record order as a statement of confidence in the long-term future of air travel and in the company’s role as a conduit between airlines, aircraft, and capital.
The A320neo Family offers a minimum 20 percent reduction in fuel consumption and carbon dioxide emissions, along with a 50 percent noise reduction compared to previous-generation single-aisle aircraft. The program has secured more than 20,400 orders globally.
Rob Downes, Chief OEM Officer at ACG, noted that the aircraft family remains highly sought-after among airline customers for both replacement and growth requirements. The new order extends the lessor’s delivery pipeline into the mid-2030s.
The relationship between the two companies spans nearly two decades. Benoît de Saint-Exupéry, Executive Vice President of Sales for the Commercial Aircraft business at Airbus, highlighted that the partnership dates back to 2007 when ACG placed its first order with the manufacturer.
Corporate restructuring and leasing market demand
Founded in 1989, ACG is currently a wholly owned subsidiary of Tokyo Century Corporation. The lessor manages a portfolio of over 500 aircraft leased to approximately 85 to 90 airlines across 50 countries. On August 12, 2026, the company reported second-quarter financial results showing total revenues of $668 million for the first half of the year, total assets of $14.6 billion, and available liquidity of $6.6 billion. The company also recently relocated its global headquarters to a modernized facility in Newport Beach on June 15, 2026.
The record Airbus order arrives during a period of significant corporate transition for the lessor. On August 3, 2026, Tokyo Century Corporation announced a binding memorandum of understanding to transfer a 50 percent ownership interest in ACG’s direct parent company to ITOCHU Corporation for approximately $1.9 billion. The transaction, expected to close in November 2026 subject to regulatory approvals, will shift ACG to a 50:50 joint management structure between the two Japanese conglomerates.
The aircraft leasing sector is currently experiencing robust demand driven by a global shortage of new aircraft and sustained post-pandemic air travel demand. Lessors are placing large orders to secure delivery slots well into the next decade. ACG competes with major independent lessors such as AerCap, SMBC Aviation Capital, Avolon, and Air Lease Corporation.
AirPro News analysis
We view the timing of this record order as a direct reflection of ACG’s impending joint ownership structure under Tokyo Century and ITOCHU. The strategic partnership with ITOCHU is explicitly aimed at scaling ACG’s combined leasing business into one of the world’s top five by fleet size. By locking in 75 delivery slots in the highly constrained 2032 to 2035 window, ACG is executing on that growth mandate before the acquisition even closes.
Furthermore, securing A320neo Family positions into the mid-2030s is a defensive necessity in the current leasing environment. With Airbus production slots largely sold out for the remainder of the decade, lessors without guaranteed future pipelines risk losing market share to competitors who can offer airlines guaranteed lift. This order ensures ACG will have the industry’s most liquid asset class available to offer customers during a period when narrowbody capacity is expected to remain tight.
Photo Credit: Airbus
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