Next shoe in Bombardier trade complaint to drop tomorrow - Leeham News
With Boeing not building a 100-125-seat aircraft or competing in the Delta bid, where is the harm that Bombardier won this order?
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Oct. 3, 2017
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.
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 is receives funding from Boeing, universally believe there is no case.
Contrast to Airbus
The Bombardier case relating to harm is in sharp contrast to the US-European Union trade battle over subsidies and launch aid between Boeing and Airbus before the World Trade Organization.
While the subsidies portion in the Bombardier and Airbus cases read like chapters out of the same book, there are sharp differences over "harm."
Airbus and Boeing compete head-to-head in every airplane category. Observers debated the amounts of harm claimed by Airbus and Boeing in the respective US-EU complaints, but there was no disputing harm of some level occurred.
Contrast this with universal condemnation (except for the consultant who benefits from Boeing grants) of the Boeing claims that it is harmed and Bombardier threatens to put Boeing and the entire US aerospace industry out of business unless punished.
Boeing and Bombardier don't compete at all in the 100-125 seat sector, which is at stake with the CS100 order by Delta in the current trade complaint.
The CS100, in Delta's two-class configuration of 109-seats, doesn't even match Boeing's own "Single Aisle" description of its new Current Market Outlook; this begins at 110-seats. (Below this is Boeing's definition for regional aircraft.)
Boeing didn't offer an airplane to Delta that competed with the CS100. It doesn't build an airplane that competes with the CS100.
Read it all... https://leehamnews.com/2017/10/03/next-shoe-bombar...