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By Joe Brock, Tim Hepher and Giulia Segreti
PARIS (Reuters) -Airbus struck a deal with budget airline VietJet for up to 150 single-aisle jets at the Paris Airshow on Tuesday, where industry hopes for a return to tariff-free trade were given a boost by U.S. Transport Secretary Sean Duffy.
Duffy said he wanted civil aviation to return to a 1979 zero-tariff trade agreement, in one of the clearest signs yet that the Trump administration might favour such a move.
However, Duffy added that while the White House was aware that the U.S. is a net exporter in aerospace, it was also dealing with a complex tariff situation.
U.S. President Donald Trump’s 10% tariffs on nearly all airplane and parts imports are a headache for an industry already battling supply chain challenges and facing fresh turbulence from last week’s deadly Air India crash and conflict in the Middle East.
In early May, the U.S. Commerce Department launched a "Section 232" national security investigation into imports of commercial aircraft, jet engines and parts that could form the basis for even higher tariffs on such imports.
Airlines, planemakers and several U.S. trading partners have been lobbying Trump to restore the tariff-free regime under the 1979 Civil Aircraft Agreement.
On day two of the air show, European planemaker Airbus said it had signed a memorandum of understanding for VietJet to buy 100 A321neo planes, with the option to buy up to 50 more in future. The agreement confirmed an earlier Reuters story.
A deal for 150 A321neos could be worth around $9.4 billion, according to estimated prices provided by Cirium Ascend.
The agreement was the latest in a flurry of business announced by Airbus at the world’s biggest aviation trade fair.
U.S. rival Boeing (NYSE:BA) is expected to have a more subdued show as it focuses on the probe into last week’s fatal crash of an Air India Boeing 787 and after it racked up huge deals during Trump’s recent tour of the Middle East.
Meanwhile, Rolls-Royce (OTC:RYCEY) CEO Tufan Erginbilgic told reporters it was "even more true" that the British jet engine maker wanted to enter the narrow-body jet market, preferably via a partnership.
He said the company was talking to multiple potential partners, but added it did not see a new narrow-body aircraft before 2035.
On the defence side, Leonardo chair Stefano Pontecorvo said the Italian group had bought a European cybersecurity company to strengthen its position in an area seen as increasingly important in new combat systems.
He declined to name the company, saying only that the deal would be announced soon.
Analysts are expecting a flurry of defence deals as European companies aim to tap into a surge in military spending.
Separately, Leonardo CEO Roberto Cingolani said he saw advantages to new entrants joining an Italian-British-Japanese next-generation fighter jet programme, particularly in terms of technology, but added that it would be a decision for the governments involved.
He added that the addition of Saudi Arabia to the Global Combat Air Programme - something that has long been mooted - would open up a big market with great potential.