Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Services are driving revenues and profits in difficult times, Part II May 22, 2025
- Boeing publicizes fourth Chief Aerospace Safety Officer Report May 21, 2025
- Boeing’s 2025 annual safety report due this month May 20, 2025
- FAA’s data of accident, incidents, often not shared May 19, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 22. May 16, 2025
Next shoe in Bombardier trade complaint to drop tomorrow
Oct. 3, 2017, © Leeham Co.: The other shoe in the Boeing-Bombardier trade complaint is to drop Wednesday when the US Department of Commerce makes its decision whether Boeing suffered harm, or there is a threat of harm, in the CS100 order by Delta Air Lines.
Bombardier CS100 ordered by Delta Air Lines.
The DOC last week determined that Bombardier received illegal subsidies dating to the 2008 program launch of the CSeries, through the 2016 equity investments by the provincial government of Quebec and the federal government of Canada. Certain tax breaks were also deemed illegal subsidies by the DOC.
The determination was expected, even by Bombardier. But the DOC shocked the global aviation community by levying a 220% tariff. The rate is preliminary and won’t be finalized until next year, but absent some extraordinary event, it’s expected to be confirmed—followed by lengthy appeals.
The decision Wednesday relates to harm, or anti-dumping in legal terms. Here’s where the aviation community and observers, except for one who is prominent and who receives funding from Boeing, universally believe there is no case.
Monarch ceases operations
Oct. 1, 2017, (c) Leeham Co.: Monarch Airlines ceased operations today (Oct. 2 in the UK) when its operating license was withdrawn and an Administrator appointed, the BBC reported.
Monarch Airlines Airbus A320. BBC photo via Google images.
The airline has 32 Boeing 737-8 MAXes on order. It operated a fleet of 34 Airbus A320s/A321s. Principal lessors are AerCap and Aviation Capital Group, according to the Airfinance Journal Fleet Tracker.
Given the current trade war between Boeing and Bombardier, there may be a sigh of relief in Montreal. Boeing beat out Bombardier in winning the MAX 8 order against the CS300 in 2014.
American wants to decide A350 fate within six months
Sept. 28, 2017, © Leeham Co., Grapevine (TX): American Airlines would like to decide within six months what it will do with its order for 22 Airbus A350-900s, a left-over deal from US Airways before the latter acquired the former.
Derek Kerr, EVP and CFO, told LNC on the sidelines of American’s investors/media day here in a Dallas suburb that the A350s were intended to replace US Airways’ A330s. The airline ordered 22 of the airplanes.
American, however, selected the Boeing 787-8/9 for its mid-size, long haul fleet, ordering 74 42. The new American deferred delivery of the A350s to 2020 and Kerr said a deadline is approaching to decide what to do with the order.
Assessing the impact of the Bombardier decision
Sept. 27, 2017, © Leeham Co.: The aviation world is still in shock over the size of the tariffs the US Department of Commerce plans to impose on Bombardier C Series deliveries to Delta Air Lines.
The DOC yesterday preliminarily decided to impose a 220% tariff on each CS100 delivered to Delta.
Delta Air Lines Bombardier CS100.
Deliveries are scheduled to begin in April.
And this is only half the case. This week’s decision is about launch aide and the equity investments BBD received for the CSeries.
Next week, it will be a determination whether Boeing and the US airline industry faces the threat of injury. Observers believe DOC will conclude there is.
Pontifications: Revisionist history
By Scott Hamilton
Sept. 25, 2017, © Leeham Co.: The US Department of Commerce today is scheduled to release its decision on whether to impose tariffs on each Bombardier CS100 delivered to Delta Air Lines, starting this year. (The public announcement is tomorrow.)
The tariffs will be in two forms: one for dumping the aircraft at prices below that sold in the home market (Canada) and one for “injury” to Boeing.
LNC understands the total could be in the range of $32m per plane. We don’t know if this a correct figure.
Boeing told its investors conference last week it’s pursuing this complaint about Bombardier subsidies to avoid another Airbus emerging and destroying Boeing and the US aerospace industry—an idea included in Boeing’s filings with the US government.
In those filings, Boeing claimed Airbus led to the demise of Lockheed’s commercial aviation business and of McDonnell Douglas.
I think this is a bit of revisionist history.
CSeries economy up to 3% better than advertised
Sept. 19, 2017, © Leeham Co., Montreal: The Bombardier CSeries has proved to be 1% to 3% more fuel efficient in service than advertised, the company revealed last week at its Media Day.
The improvements depend on the mission: 1% on shorter routes and 3% on the longer ones.
Better-than-advertised performance had been rumored, and reported, for months but this is the first time Bombardier confirmed the reports.
It also depends on the model. The CS100, a shrink design, is slightly better than advertised; the CS300—the optimized design—is the better performer.
Pontifications: Next steps in Boeing-Bombardier trade complaint
By Scott Hamilton
Sept. 18, 2017, © Leeham Co.: The US Department of Commerce is due next Monday to hand down its preliminary decision on whether to impose tariffs on Bombardier’s C Series sold to Delta Air Lines.
The price dumping complaint, filed by Boeing earlier this year, cleared the US International Trade Commission on a 5-0 vote. The ITC found probable cause (my words) to proceed with the complaint. From there, investigation shifted to the DOC.
- Update: Boeing UK responds to UK criticism.
- Update: Bombardier responds to Boeing’s response.
The details are complex and need not be recapped here. What is important are the next steps, assuming—as widely expected—DOC sides with Boeing.