Pontifications: Boeing-Bombardier dispute’s big winner: Airbus

By Scott Hamilton

June 12, 2017, (c) Leeham Co.: Boeing won round one Friday in its price-dumping complaint against Bombardier over its sale of the CSeries to Delta Air Lines.

The US International Trade Commission (ITC) voted 5-0 to continue the investigation. It now goes to the US Department of Commerce to determine whether tariffs should be imposed on the deal, and how much. Delta Air Lines would have to pay the tariffs.

Boeing won this round but the big winner is likely to be Airbus.

 

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Boeing gets favorable ruling against Bombardier

June 9, 2017: Boeing received a 5-0 favorable decision from the US International Trade Commission in its complaint that Bombardier dumped its CSeries order with Delta Air Lines at an illegally low price.

The full decision won’t be published until next week.

The press release and some additional information is below.

A Reuters story is here.

A Politico story is here.

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Bombardier optimistic about China

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Introduction

June 5, 2017, © Leeham Co.: Bombardier’s activities in China, where the fuselage for the CSeries is co-produced, have been at a standstill.

None of the Memorandums of Understand or Letters of Intent have been converted to firm

Bombardier Q400.

orders. A recent news report suggested renewed talks between COMAC, China’s commercial aircraft enterprise, and Bombardier over acquisition of the CSeries program

LNC sat down with Fred Cromer, president of Bombardier Commercial Airplanes, at the annual general meeting of IATA to discuss these and other issues.

Summary
  • An update on the COMAC-CSeries relationship.
  • An update on the slow-selling Q400 and CRJ programs.
  • An update on the oft-discussed CS500.
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Bombardier sees no merit to Boeing complaint, says president

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Introduction

June 5, 2017, © Leeham Co.: A decision from the US International Trade Commission

Fred Cromer, president of Bombardier Commercial Airplanes.

(ITC) about the Boeing complaint of alleged Bombardier price dumping in its Delta Air Lines CS100 deal last April is scheduled to be issued June 15.

Bombardier believes the complaint to be without merit.

Fred Cromer, president of Bombardier Commercial Airplanes, explains why in this interview yesterday by LNC at the annual general meeting of the International Air Transport Association (IATA) in Cancun, Mexico.

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Boeing complaint “unprecedented overreach,” says Bombardier

May 30, 2017, © Leeham Co.: “Boeing’s petition…is unprecedented in its overreach. There have been no…imports and no domestic shipments during the period of investigation. There are no lost sales or revenues. Boeing does not even make a product that competes with the aircraft Bombardier offered in the United and Delta competitions….”

So begins Bombardier’s closing brief in the Boeing complaint before the US International Trade Commission (ITC).

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Bombardier’s missed opportunity for the CS500

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Introduction

May 29, 2017, © Leeham Co.: Boeing worries that if left unchecked, Bombardier will launch the often-talked about CS500, a 160-189 passenger concept that would compete directly with Boeing’s 737-800 and MAX 8.

Image via Google.

Boeing alleges that Bombardier sold Delta Air Lines 75 CS100s at $19.6m, amounting to price dumping because of Canadian government “subsidies” received in a bailout. Boeing told the US International Trade Commission in a May 24 closing brief that Bombardier, in essence, will become the next Airbus if the ITC doesn’t nothing to penalize Bombardier by slapping 79% tariffs on the Delta aircraft.

As a result, Bombardier stands to drive Boeing out of business and with it, the US aerospace industry.

There are a couple of key flaws in this argument.

Summary
  • Bombardier missed its greatest opportunity to develop the CS500 as a competitive airplane to the 737 (and the Airbus A320).
  • Boeing claims the CS500 will kill the 737-800. But this model is slated to go out of production by 2019, long before the CS500 could enter service.
  • Boeing’s argument assumes the 737 MAX is a long-term airplane. In reality, the New Small Airplane is just around the corner, so-to-speak—which should surpass the economics of the CS500.

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Bombardier “deliberately misleading” in price dumping case, says Boeing

Delta Air Lines CS100. Source: Delta.

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.

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Pontifications: No sale for Boeing in Bombardier complaint

By Scott Hamilton

May 29, 2017, © Leeham Co.: I’m having a really hard time buying into Boeing’s arguments in the complaint about alleged price dumping by Bombardier in its deal with Delta Air Lines.

I say this despite the fact that Boeing lawyers at least four times directly and twice indirectly cited “trade publication” Leeham News and Comment in support of its case. While flattering to be used as an authoritative source, Boeing’s testimony doesn’t support the claim that Bombardier acted improperly, in my view (nor that of AirInsight, which also reviewed the testimony). There are, of course, scads of exhibits and confidential information not available for public review that could, if available for public dissemination, might change opinion.

The thing is, Boeing is known among journalists and analysts for its occasional descent into hyperbole. Or, as one reporter I talked to put it, this is an example of Cirque du Soleil acrobatics. It is with some amusement that I note Cirque du Soleil is, like Bombardier, headquartered in Montreal.

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Bombardier-Delta deal can put Boeing out of business, company claims

May 25, 2017, © Leeham Co.: Boeing says its very future, and that of US aerospace industry, is at risk if Bombardier’s deal with Delta Air Lines for 75 CS100s and 50 options is not fined for price dumping.

That’s the claim company officials made in testimony before the US International Trade Commission May 18.

Boeing filed a complaint with the ITC and the US Department of Commerce April 27, charging that Bombardier sold the CSeries to Delta for $19.6m, a price so far below production costs that it constitutes “dumping” under legal definitions.

Bombardier and Delta deny the price and Bombardier denies the over-arching dumping claims.

LNC reviewed the 290-page transcript of the May 18 hearing.

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Delta shoots down Boeing’s CSeries dumping claim

May 23, 2017, © Leeham Co.: Delta Air Lines shot down Boeing’s claim that Bombardier “dumped” the CSeries order, in testimony last week before the US International Trade Commission.

Boeing filed a complaint April 27 that Bombardier sold the CS100 to Delta for $19.6m, well below its production cost, a price that constitutes “dumping.”

Bombardier CS100.

Boeing seeks tariffs of nearly 80% on the importation of the airplanes to Delta.

Boeing’s complaint is that the Delta deal made it impossible for Boeing to offer the 737-700 at a competitive price.

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