AerCap CEO Warns: Tariffs Threaten Boeing's Cash Recovery

As the aviation industry continues to grapple with the aftermath of the COVID-19 pandemic, another challenge looms on the horizon: transatlantic tariffs. AerCap CEO Aengus Kelly has recently sounded the alarm, warning that these tariffs could hinder Boeing's much-needed cash recovery. Let's delve into the implications of these tariffs and explore how they might impact Boeing's financial situation in the short and long term.



Short-term effects: Delays and uncertainty

The tariffs have been a significant impediment to delivering Boeing aircraft into Europe, as acknowledged by ALC's Steve Hazy. This delay in deliveries directly affects Boeing's cash flow, as the company generates most of its cash from aircraft sales at the time of delivery. For instance, ALC has a 787 due for LOT Polish Airlines since last year that has not yet been delivered due to tariff-related issues. This delay in delivery means Boeing is not receiving the cash it would have from this sale, contributing to its cash flow problems.

Moreover, the tariffs have created uncertainty and potential additional costs for Boeing and its customers. AerCap's CEO Aengus Kelly criticized the tariffs, stating, "it’s just degrees of loss" for everyone involved. This uncertainty and potential additional costs can deter customers from purchasing Boeing aircraft, further impacting the company's cash flow.