May 29, 2017, © Leeham Co.: Boeing minced no words in its closing brief to the US International Trade Commission in its price dumping complaint against Bombardier.
“Bombardier’s intentional obfuscation simply proves that Bombardier has no credible answer to [the] allegations,” Boeing’s lawyers wrote in the second sentence.
“On each critical issue, Bombardier’s deliberately misleading presentation…confirms its inability to refute [Boeing’s] allegations,” the lawyers write.
Boeing took issue with Bombardier’s effort “to distance itself from the 100-150 seat” market and wrote that it was “disingenuous” for BBD to claim it only competes with Embraer.
Bombardier, Boeing notes, always said it competes with the 737-700/7.
Boeing is correct—for the CS300, though not so for the smaller CS100. But the point is valid.
Boeing goes on to essentially claim Bombardier will be the next Airbus if the US ITC doesn’t agree that the Canadian company sold its CS100s to Delta Air Lines at a price that qualifies as “dumping” under international definitions.
“If Bombardier’s practices are left unaddressed, it will continue to use highly distortive pricing to eliminate the 737 MAX 7 from the 100- to 150-seat market. Bombardier will then use the resulting profits and momentum to wield the forthcoming CS500 in the medium single-aisle market against the Boeing 737-800 and MAX 8. The cycle will repeat itself…,” Boeing writes, charging that Airbus was responsible for the demise of Lockheed and McDonnell Douglas from the commercial aviation industry.
Boeing calculates that Bombardier sold 75 CS100s to Delta at $19.6m, a price BBD and Delta deny.
“Absent orders, the likely scenarios for the domestic industry’s product of the future, the 737 MAX 7, are that very soon it will either be marginalized…or that it will have effectively ceased to be a viable competitor…,” Boeing writes.
While Boeing refuted Bombardier’s testimony in nearly 40 pages of its 104-page brief, the US company referred to Delta’s testimony only is passing. Delta is a large customer of Boeing’s and the latter hopes that Delta will be a launch customer of the 737 MAX 10 later this year. Delta is expected to open competition between Airbus and Boeing for its first NEO or MAX airplanes.
Many believe Boeing is risking winning orders for the MAX from Delta by attacking the Bombardier deal. This may be why Boeing largely ignores Delta’s May 18 testimony in its closing brief.
Boeing’s closing brief is heavily redacted of information it considers proprietary. For example, Boeing doesn’t reveal its 20-year market forecast for the 100-150 seat sector in the US. Boeing doesn’t break out the sector in its Current Market Outlook.
Bombardier testified May 18 that its forecast is 1,900 aircraft in the sector for North American, which includes Canada and Mexico in addition to the United States. Neither Airbus nor Embraer segment this sector, either.
Boeing completely ignored Embraer in its May 18 testimony and in its closing brief. The E-190, at maximum one-class capacity, is 100 seats. The E-195E2 has 133 seats in one-class, squarely in the sector. Embraer has firm orders for 172 E-195E2s, including 67 from US-based lessor Aircastle and AerCap, which inherited the order when it acquired US-based ILFC.
LNC has not yet received the Bombardier closing briefs. We’ll synopsize this when we do.
The loser in the ITC case may appeal to the US Federal District Court in Washington (DC).