Will Boeing Give a Damn?

[Maverick]

Taking this one step further would be to go with one of the Eurocanards for the CF-18 replacement. Either the Eurofighter or Rafale.

Dassault has offered 100% technology transfer and they would be built in Canada.

The problem with that is it would have to be Bombardier building them and while I support Canadian industry I'm really reluctant to reward that company again.

The Beaudoin family has to go.

Boeing Super Hornet jet purchase likely to become 1st casualty in possible trade war

Critics question Trudeau's tactic of linking Super Hornet purchase with Bombardier trade dispute

By Murray Brewster, CBC News Posted: Sep 27, 2017 5:00 AM ET Last Updated: Sep 27, 2017 10:29 AM ET

Bombardier's CSeries commercial jet takes off on its first flight in Montreal on Sept. 16, 2013. The U.S. Commerce Department has imposed a near 220 per cent tariff on the import of the CSeries jet, citing Canadian government subsidies. (Ryan Remiorz/Canadian Press)

 

As expected, trade investigators in Washington sided with Boeing, the Chicago-based commercial and defence giant in its fight against Bombardier of Montreal, which has been accused of selling its CSeries passenger jets at below-market cost.

What wasn't expected was the size of the countervailing duty, said David Baskin, president at Baskin Wealth Management, a Bay Street investment management firm.

The U.S. plans to impose an import tariff of 219.6 per cent, which would effectively triple the cost of Bombardier jets.

"I think there's going to be a lot of angry people in a lot of countries," said Baskin.

Bombardier's discount deal with Delta Airlines was expected, considering it was introducing a new jet, Baskin said.

"I don't think anybody suggested the plane was sold at two-thirds off list [price]," he said.

• Bombardier calls 220% U.S. duty on CSeries 'absurd,' says real fight now begins

• U.S. imposing 220% duty on Bombardier CSeries planes

• Trudeau blasts 'billions' in U.S. aid to Boeing as trade dispute simmers

Since the spring, Boeing has argued that Bombardier was heavily subsidized by the federal and Quebec governments in a manner that allowed it to sell unfairly at below-market prices.

There are still more regulatory hurdles before the decision is finalized. The Trudeau government chose to accentuate that point late Tuesday, saying the U.S. Commerce Department's investigation is still at the preliminary stage.

Foreign Affairs Minister Chrystia Freeland said the duties are clearly aimed at blocking Bombardier's CSeries aircraft from the U.S. market.

"This is an unjust, punitive ruling," she said before a working dinner with her U.S. and Mexican trade negotiating partners, who are in Ottawa for the latest round of the North America Free Trade Agreement renegotiation talks.

A U.S. naval air crew walks the flight line in front of a squadron of Super Hornet fighters at Naval Air Station Oceana , Virginia on Jan. 26, 2017. (Murray Brewster/CBC)

Freeland also repeated the threat to cancel the Liberal government's planned sole-source purchase of Boeing Super Hornet jet fighters.

The Liberal government has been clear that this case "very much has a bearing" on the decision to buy the warplanes, said Freeland.

"The government of Canada cannot treat, as a trusted partner, a company which is attacking our aerospace sector."

Prime Minister Justin Trudeau was even more blunt.

Speaking two weeks ago beside British Prime Minister Theresa May, Trudeau said the fighter deal is all but dead.

"We won't do business with a company that's busy trying to sue us and trying to put our aerospace workers out of business,'' he said.

The first casualty may be the fighter purchase, but Baskin said he believes that Bombardier's contract with Delta will have to be cancelled, because neither the airline nor the manufacturer will pay that enormous duty.

Even if the ruling is overturned on appeal before international trade watchdogs, he said, the timing of the ruling is horrible for Bombardier because of "its terrible balance sheet."

Interim fighter jet problem

But the military could also be left in a long-term lurch.

The Liberals insisted they needed to buy 18 Super Hornets on an urgent basis to cover a gap in the country's ability to field fighters for Norad and NATO at the same time.

The next best option would be to buy used FA-18s from another country until a competition to replace the entire fleet of Canadian CF-18s is launched.

Canada's Minister of Foreign Affairs Chrystia Freeland arrives for a dinner at the National Arts Centre, during the third round of NAFTA negotiations in Ottawa on Tuesday evening. (Justin Tang/Canadian Press)

During the election campaign, however, Trudeau ruled out buying the Lockheed F-35 stealth fighter, and the bruising political rhetoric surrounding Boeing suggests that company has also been ruled out.

Defence experts say that leaves only European fighter jets to consider.

"I can't see us going ahead with a competition that doesn't include the North American entrants," said Dave Perry, of the Canadian Global Affairs Institute.

"They've painted themselves into a corner, and they're going to have to make a choice about which one of these positions they back away from."

Questioning Trudeau's tactics

Beyond the stopgap purchase and full fleet competition, Perry said, there are other projects, such as plans to replace the air force's aerial refuelling jets and multi-mission aircraft, which could be affected by a trade war.

"I think the government needs to get past the way it's framing Boeing as not being a trusted partner," said Perry.

"There's also a number of other procurements that, if Boeing is not a competitor, the Canadian Armed Forces will suffer because of a lack of choice."

On Tuesday, the Conservatives criticized the Liberals for dragging the fighter jet purchase into the dispute.

"We think this was a poor decision from the get-go," said Opposition leader Andrew Scheer.

"It's up to the Liberal government to explain how — in any way — this helps create jobs in Canada, get the much-needed replacements for our men and women in the Armed Forces and protect our interests at NAFTA."

Baskin said the government's linkage of the fighter jet deal and the trade complaint has raised a number of important questions about defence procurement.

"I understand why the prime minister did what he did," he said. "I don't think it's helpful to the Canadian Forces, and it doesn't appear to have made any difference in the decision by the Commerce Department."

 

http://www.cbc.ca/news/politics/boeing-bombardier-trade-war-brewster-1.4308734

[boestar]

Hey Boeing....You want this landing gear for the 787.  Ya.  We had to triple the price.

Canada make MANY parts for Boeing aircraft.  just impose a Duty of the equal amount on all parts going to Boeing.  It would take years to spool up another gear supplier for instance.

 

[dagger]

1 hour ago, boestar said:

Hey Boeing....You want this landing gear for the 787.  Ya.  We had to triple the price.

Canada make MANY parts for Boeing aircraft.  just impose a Duty of the equal amount on all parts going to Boeing.  It would take years to spool up another gear supplier for instance.

 

No, ultimately duties have to be applied to parts going to all manufacturers. And I don't know why you would punish the Canadian gear supplier. 

[DEFCON]

It's hard to imagine government officials weren't expecting Boeing's reaction etc. when they were preparing to bail 'the family' out? Presumably, they're confident the resolution won't favour the American view.

[Guest]

Bombardier row

• 1 hour ago
• From the section Northern Ireland
• 1941 comments

• http://www.bbc.com/news/uk-northern-ireland-41397181
  e

 

The history of Bombardier in Northern Ireland

Media captionAbout 1,000 jobs in Belfast are linked to the C-Series

Boeing's trade dispute with Bombardier "could jeopardise" its defence contracts with the UK government, the UK's defence secretary has warned.

Sir Michael Fallon made the comments after the US opted to impose a tax on the C-Series jet made by Bombardier.

The proposed 220% import tariff could threaten Bombardier jobs in Belfast.

Rival Boeing had complained that Bombardier had received unfair state subsidies from the UK and Canada.

It claimed these subsidies helped the firm win a major order.

In 2016, Boeing won a contract to supply 50 Apache helicopters to the Army.

Bombardier said it would fight the "absurd" ruling. The firm is one of Northern Ireland's biggest employers.

Sir Michael said during a visit to Belfast that "Boeing stands to gain from British defence spending" but that "this kind of behaviour could jeopardise our future relationship" with the firm.

"We don't want to do that. Boeing is an important investor in the United Kingdom; an important employer in the United Kingdom.

"But we would prefer this kind of dispute to be settled on a negotiated basis and we will be redoubling our efforts with the Canadian government to bring about a negotiated settlement." Theresa May said she was bitterly disappointed by the US ruling

Prime Minster Theresa May said she was "bitterly disappointed" over the US Department of Commerce proposal to impose the tax.

She said the UK would work with Bombardier to protect "vital" jobs.

The UK government and trade unions fear the imposition of tariffs could make the Canadian firm question whether to remain in Northern Ireland, where it employs 4,100 of its 28,000-strong workforce.

The ruling damaged the global aerospace industry and was "frankly not what we would expect of a long-term partner to the UK", said a UK government spokesman, while emphasising this was just the first step in a lengthy process.

About 1,000 jobs are linked to the C-Series, the wings of which are made at a purpose-built £520m factory at Queen's Island in BelfastImage copyright AFP/Getty

The programme is not just important to Bombardier jobs in Belfast, but also to 15 smaller aerospace firms in Northern Ireland - and dozens more across the UK - which make components for the wings.

The US Department of Commerce ruling, which could triple the cost of a C-Series aircraft sold into the United States, could potentially jeopardise a major order placed last year from US airline Delta - a $5.6bn (£4.15bn) deal for up to 125 of the jets.

Bombardier said the decision was "divorced from the reality about the financing of multibillion-dollar aircraft programmes".

The Canadian firm said Boeing was seeking to use US trade laws "to stifle competition".

'Things could get worse'

Julian O'Neill, Northern Ireland Business Correspondent

The outcome was predicted - but not the severity of the penalty.

The tariff could triple the cost of C-Series aircraft in the US, effectively killing the market for Bombardier.

It also puts a major order with Delta Airlines at risk - and things could get worse before they get better.

Washington's Department of Commerce is due to make a second tariff ruling on 5 October.

But a more important date is next February when the US International Trade Commission will either uphold the penalty or remove it.

This was always the focus for Bombardier and its allies.

Bombardier said it had created a "superior aircraft" that is more efficient and comfortable but Boeing was trying to prevent "US passengers from realising these benefits, irrespective of the harm that it would cause to the US aerospace industry and the cost to airlines and consumers".

Sir Jeffrey Donaldson tells Today that Bombardier tariff may have 'devastating' economic consequences

Media captionSir Jeffrey Donaldson tells Today that Bombardier tariff may have 'devastating' economic consequences

But Boeing said the dispute was about "maintaining a level playing field", and said its aim was to make sure that "aerospace companies abide by trade agreements".

Delta, however, said there was no risk to US businesses as neither Boeing nor any other US firm produced 100-110 seat aircraft to compete with the C-Series.

US Secretary of Commerce Wilbur Ross said one reason for the tariff ruling was Bombardier's failure to cooperate with the investigation.

"The evidence we have to rely on is evidence not coming from Bombardier but evidence being proposed by Boeing and other outside parties," he said.

The US government was "not necessarily" targeting Bombardier's Northern Ireland factory, he said, but added: "If you're building wings for a plane that doesn't get built, that's a problem."

Government funding

Analysts say that the ruling will increase tensions between the US government and Canada and the UK, both countries have deals to supply military aircraft worth billions of dollars with Boeing.

The UK government and Northern Ireland Executive pledged to invest almost £135m in the establishment of the C-Series manufacturing site.

The programme received £750m from Quebec's provincial government in 2015 when its fortunes appeared to be ailing.

  Critics say Boeing's complaints are unfounded as it does not make 100-110 seat aircrafts with which the C-Series would compete

On Wednesday, Quebec Premier Philippe Couillard called the tariffs "unfair" and an attack on the Canadian province where Bombardier has its headquarters and employs more than 17,000 people.

"Quebec has been attacked. And Quebec will resist," he told journalists, adding that that Quebec remained committed to manufacturing the C-Series.Image copyright Reuters

 Canadian Prime Minister Justin Trudeau threatened to cancel a Boeing order from the US

"Boeing may have won the battle but the war is far from over," he said.

In 2016, Quebec invested US$1bn in the passenger jet.

Canadian Prime Minister Justin Trudeau has threatened to cancel the purchase of 18 Boeing Super Hornet jet fighters from the US in retaliation.

Foreign Affairs Minister Chrystia Freeland said on Tuesday that the government was disappointed in the decision.

The International Association of Machinists and Aerospace Workers - a machinists union - called the countervailing duty "a protectionist and dangerous measure for the stability of the aerospace industry".

In Northern Ireland, CBI director Angela McGowan said the ruling put an important driver of Northern Ireland's economic growth at risk.

Northern Ireland has effectively been without a devolved government for nine months, and Ms McGowan said the situation reinforced the need for a return of a power-sharing executive.

"With jobs and future prosperity in the region being put at risk by decisions made far away from Belfast, we need a devolved government that can speak up for and champion the needs of the local workers and businesses most affected," she said.

[DEFCON]

Pressure on Canada perhaps in advance of nafta negotiations?

[Vsplat]

5 hours ago, DEFCON said:

Pressure on Canada perhaps in advance of nafta negotiations?

I was wondering the same thing.  For sure, the over-the-top increase in the tariff amount smacks of white house intervention. 

Vs

[dagger]

17 hours ago, Vsplat said:

I was wondering the same thing.  For sure, the over-the-top increase in the tariff amount smacks of white house intervention. 

Vs

Ptobably, but strategically it might have been an error. Even Boeing didn't ask for this, and it makes it more likely the first appellate court or tribunal this reaches will throw it out. Boeing likely preferred something that might actually hold up better through the appeals process. The Commerce Department is the most politicized aspect of anti-dumping cases. They begin there, and the decision is almost always to back the US company complaint, no matter how worthy or specious. The next likely stages usually bring less certain results. The US ITC will side with the foreign target about 40% of the time, and I'm told the US courts will side with the foreign target even more, rarely hesitating, as one trade lawyer said, "to cut the DoC (commerce department) another big one." Bombardier can win this, if it can make it to the finish line. 

 

One bit of good new today, Air Baltic, the launch customer for the CS300, likes it so much it is going to order another 14. Says nothing else in this class can touch it.

[Guest]

Canada kicked tires on used Kuwaiti jets, now looking down under: Sajjan

Lee Berthiaume, The Canadian Press
Published Thursday, September 28, 2017 12:27PM EDT
Last Updated Thursday, September 28, 2017 2:51PM EDT

OTTAWA -- Canada kicked the tires on the idea of buying used fighter jets from Kuwait to address a shortage of CF-18s, Defence Minister Harjit Sajjan revealed Thursday, but found they wouldn't be ready in time.

The revelation comes amid a bitter and escalating dogfight between U.S. aerospace giant Boeing and Montreal-based Bombardier, which has the backing of Justin Trudeau's federal Liberal government.

The Liberals had planned to buy 18 Super Hornets from Boeing to fill what they claim is a critical shortage of fighter jets, but have since threatened to go elsewhere over the Bombardier dispute.

Boeing has accused Bombardier of selling its controversial CSeries commercial liners to U.S.-based Delta Air Lines at a significant discount, thanks to assistance from what it considers improper government subsidies.

The dispute took a turn this week when the Department of Commerce ruled Bombardier did indeed receive improper subsidies, proposing a whopping 219 per cent duty on any CSeries planes entering the U.S.

The penalties won't be official until the U.S. International Trade Commission rules next spring whether the Bombardier-Delta deal actually hurt Boeing's business.

But the ruling has nonetheless ramped up calls in Quebec and Ottawa for the Liberals to fire back at Boeing and the Trump administration.

Speaking from Riga, Latvia, where Canada has about 450 soldiers helping guard against Russian aggression in the region, Sajjan said he was disappointed with the Commerce Department's ruling.

While the minister wouldn't say whether the plan to buy Super Hornets is officially off the table, he did say, "We are going to be moving ahead with filling that capability gap. We are pursuing other options."

There are growing signs that the top option could be to buy used F/A-18s from Australia, which is getting rid of the fighter jets as it upgrades to the controversial F-35 stealth aircraft.

Kuwait, too, plans to sell its own used F/A-18s after securing its own deal to buy Super Hornets. There had been speculation the aircraft, which are similar to Canada's CF-18s, would be in good shape.

But Kuwait won't be ready to sell fast enough for Canada, Sajjan said, and the government is instead working closely with the Australians about possibly buying their jets.

"We have looked at the capability of the Kuwaiti fighters," Sajjan said.

"The biggest thing is right now they are not currently available. But we still want to pursue every single option. As you know, we are pursuing this option with the Australians at this time."

The key question appears to be whether any of Australia's F/A-18s have enough life left in them to serve alongside Canada's CF-18s until replacements for both begin to arrive in the mid-2020s.

The government has repeatedly emphasized the need for speed when it comes to addressing the current fighter-jet shortage, and hoped to buy interim Super Hornets by the end of the year.

That sense of urgency remains, Sajjan said, though he would not provide a timeline for when the government would pull the trigger on whatever option it decides to pursue.

"That capability we needed a long time ago," he said. "We had a plan in place, a very good plan that was going to fill the capability gap, invest in our current fleet and start the fighter replacement competition."

The government announced last November plans to purchase the planes to temporarily fill a critical shortage of fighter jets the entire CF-18 fleet is replaced in the mid-2020s.

Many defence experts, including 13 former air force commanders, have questioned Liberal claims the air force doesn't have enough CF-18s, and said replacement jets could be purchased much faster.

[Zan Vetter]

I feel the need...

[rudder]

Boeing is **bleep** that BBD scooped them on converting the AC MAX options by selling (giving away) so many C series to AC. And Boeing is stuck with 20 190's that were being redirected to Delta who also bought (paid a fraction of list price)  C series.

Another reason for Boeing to be **bleep** at BBD is giving away 737-700's to UAL to avoid a UAL C series order.

The winner in all this will be AC who has turned pitting manufacturers against each other in to an art form.

[dagger]

44 minutes ago, rudder said:

Boeing is **bleep** that BBD scooped them on converting the AC MAX options by selling (giving away) so many C series to AC. And Boeing is stuck with 20 190's that were being redirected to Delta who also bought (paid a fraction of list price)  C series.

Another reason for Boeing to be **bleep** at BBD is giving away 737-700's to UAL to avoid a UAL C series order.

The winner in all this will be AC who has turned pitting manufacturers against each other in to an art form.

Maybe, but as Scott Hamilton said, nobody wants the MAX 7 - Noooobooodddddyyyyyy, especially for sub-150 passengers. It's just too heavy. AC wasn't going to get MAX 7s to replace Embraers. Would have gone to Airbus first.

[Super 80]

1 hour ago, rudder said:

Boeing is **bleep** that BBD scooped them on converting the AC MAX options by selling (giving away) so many C series to AC. And Boeing is stuck with 20 190's that were being redirected to Delta who also bought (paid a fraction of list price)  C series.

Delta took delivery of the Embraers in question.

[DEFCON]

Boeing had the opportunity to purchase the C Series program, but did not take advantage of the proposal; some say the asking price was way too high. Surely they knew what the aircraft represented technologically and to the marketplace.

If the program was to get into financial trouble again, the second time around the asking price could be a whole lot lower giving Boeing the chance to fill a big hole in its product line as well as replacing the 737 series altogether?

  

[Maverick]

Aerospace Needs Accord On Government Support Standards

Boeing-Bombardier case shows the aerospace industry needs common standards on government support 

Sep 29, 2017 Jens Flottau | Aviation Week & Space Technology 

The next chapter in the bitter disputes over subsidies in the aerospace sector has officially opened: Boeing won support from the U.S. Commerce Department for its argument that Bombardier sold its C Series to Delta Air Lines well below the cost of production and should therefore be subject to a 220% import tariff once—and now if—deliveries start in April. 

For the tariff to be imposed, the Commerce proposal has to be supported by the U.S. International Trade Commission (USITC), which must show that Boeing has actually suffered damage in the campaign to sell aircraft to Delta.

But unilateral action by one country such as the U.S. solves nothing. What if China decides it does not like Boeing tax breaks or Airbus launch aid and imposes high import duties on 737s and A320s? What if Brazil goes one step further in its fight against what it believes are illegal subsidies for Bombardier and introduces similar measures? Or Japan argues that the Superjet 100 is a government-financed aircraft and should not be allowed to compete with the Mitsubishi Regional Jet? 

Credit: Delta Air Lines

What if a Dublin-based lessor takes over the Delta C Series order and then leases the aircraft to the airline?

And what about all the suppliers that benefit from local support schemes? The aerospace supply chain is so internationally intertwined that it is hard to tell who benefits and who suffers from what. 

The Boeing-Bombardier dispute makes clear that an industry-wide solution is badly needed. Together, the major players and various countries involved should define acceptable levels and forms of government support. Given the experience of the seemingly never-ending Boeing vs. Airbus case, it is doubtful if even the World Trade Organization is the right forum. But for its own sake, the industry must find a commonly agreed way forward.

If the USITC supports the Commerce Department tariff proposal, the consequences could be fatal for Bombardier. It is hard to see how Delta would still take the aircraft, and there would certainly be no new C Series orders from other U.S. airlines—which Bombardier has considered a large part of the promising market for its aircraft. Other carriers and especially lessors also would be more hesitant to order an asset with such a limited operator base.

The crucial USITC decision, expected early next year, will have to prove that Boeing’s commercial interests were damaged, even though the manufacturer did not offer Delta its 737-7 but, ironically, put forth Embraer 190s. Given this, where is the damage?

There is another small irony in the Commerce Department proposal. Delta, leading the charge against state support for Gulf carriers, for the past three years has urged the U.S. government to intervene. The Trump administration is now suggesting action on government support—but not in the way Delta had hoped.

It is the same story on both the airline and aerospace sides: Players complain tactically when they feel they are disadvantaged, but there is no true multilateral industry discourse on the matter. Boeing is happy to accept tax breaks while asserting that a Canadian province cannot invest in a particular company. Delta takes issue with subsidies for Etihad Airways but readily buys a stake in majority-government-owned China Eastern Airlines. The only difference between the two is that one is a competitor and the other is a strategic partner. Both are, by Delta’s own definition, highly subsidized.

With or without Canadian state support, the C Series will be a marginal threat to Boeing, at best. The real challenge is a longer-term one from the other side of the world: China is learning about building commercial airliners with the Comac C919. 

Defining common rules now while avoiding trade disputes would be good policy for the U.S.—and for the aerospace industry. Government intervention regarding the Delta order will not be a solution; it is only indicative of the problem. 

[Guest]

WTO appoints panel to review Bombardier CSeries subsidiesQuebec Economy Minister Dominque Anglade says the duties imposed against Bombardier could have 'significant consequences' in the U.S.

Ross Marowits, The Canadian Press
Published Friday, September 29, 2017 8:30AM EDT
Last Updated Friday, September 29, 2017 3:28PM EDT

MONTREAL -- Bombardier Inc. sustained another blow Friday as the World Trade Organization formally established a panel to review CSeries subsidies at the request of Brazil's Embraer S.A., just days after the U.S. imposed massive duties after its American rival petitioned its government.

The establishment of a dispute settlement panel comes a month after consultations with Canada failed to resolve Brazil's complaint that government subsidies for the CSeries are inconsistent with Canada's WTO obligations.

It also comes the same week that the U.S. Department of Commerce announced a nearly 220 per cent countervailing duty against the controversial planes after Boeing Co. complained Bombardier benefited from improper government subsidies, giving it an unfair advantage when selling its CSeries jets south of the border.

Related Stories

• Bombardier won't be shocked by another high CSeries duty next week
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"We believe that the decision of the Commerce Department reinforces the Brazilian government's claim in the panel opened today at the WTO," Embraer CEO Paulo Cesar Silva said in a news release.

He said the government subsidies have allowed Bombardier to sell the CSeries at artificially low prices that distort the global market and harm competitors.

None of the three WTO panel members have been appointed in what could be a lengthy review process. Boeing and Airbus have battled for 13 years over government subsidies.

Brazil's Embraer said the WTO panel will examine more than US$3 billion in subsidies received from the governments of Canada and Quebec. The aerospace rival has eaten away at Bombardier's leadership in regional jets and is developing an updated offering to partially compete with the CSeries.

Bombardier said the Canadian government plans to defend the interests of Bombardier and the Canadian aerospace industry at the WTO.

"We are confident that the investments and contribution programs mentioned in Brazil's petition are in full compliance with all WTO and international trade rules," said spokesman Simon Letendre.

Bombardier expects the U.S. to announce Wednesday it will also impose a large anti-dumping duty on CSeries planes. The preliminary duties, which far exceed what petitioner Boeing demanded, will be decided in the coming months.

Joseph Pickerill, a spokesman for International Trade Minister Francois-Philippe Champagne, said the government is very confident that its support of the aerospace industry fully respects international trade rules.

"All aircraft-producing countries provide some form of support to their aircraft industry. Brazil is no exception, and Canada will be examining closely Brazilian government support to Embraer," he stated.

Meanwhile, the company also announced a positive development Friday as it said it has secured an order for what could be Bombardier's biggest-ever sale of Q400s.

The Montreal-based company said India's SpiceJet will become the launch customer for its largest turboprop after placing a firm order for 25 high-density Q400s, with an option for 25 others. If all 50 planes are purchased by the Indian airline, it would be a record Q400 sale.

SpiceJet originally signed a letter of intent last summer to purchase 86-seat Q400s, but has agreed to buy the 90-seat aircraft, pending certification by regulatory authorities.

"This order confirms the airlines' increased capacity needs on regional routes with high passenger demand and demonstrates the increased profitability potential that this unique turboprop configuration has to offer," stated Fred Cromer, president of Bombardier Commercial Aircraft.

SpiceJet chairman Ajay Singh said the order will enhance service to smaller towns and cities in one of the world's fastest-growing regional markets.

"We have worked hard over the years to put these smaller towns on the country's aviation map and will strive to keep that momentum going in the times to come," he said in a news release.

SpiceJet operates 20 78-seat Q400s for use on domestic and international routes.

Bombardier has received firm orders for 610 Q400 aircraft that are assembled in Toronto.

The full SpiceJet order would have a list-price value of US$1.7 billion, although it's typical for purchasers to get discounts for large orders.

-- With files from Lee Berthiaume in Ottawa.

[Maverick]

 

 

 

 

Why the Delta CSeries order is worth all the trouble for Bombardier

 

Delta Air Lines’ order for 75 firm CSeries aircraft placed in April 2016 was probably the most significant commercial aircraft order ever won by Montreal-based Bombardier. Both Boeing and Embraer took notice; the US and Brazilian aircraft manufacturers have made the Delta order the cause celebre in two brewing international trade disputes over alleged CSeries subsidies—one between the US and Canada and another between Brazil and Canada.

The US Commerce Department’s preliminary ruling announced Sept. 26, which sets the stage for a staggering 219.3% duty to be placed on each CSeries delivery to the US, certainly jeopardizes Bombardier’s ability to sell the CSeries to US carriers. The US market is viewed by Bombardier as ripe for the CSeries. The Canadian manufacturer, for example, has been eyeing American Airlines’ fleet of more than 120 Airbus A319s, for which it believes the CSeries would be an ideal replacement. But a nearly 220% duty would probably make future sales in the US market unviable.

And what about the Delta order? Technically, the US government would collect the stiff duty from Delta, but there is no doubt Bombardier would pick up the tab. So is it worth it?

In a word, yes. Bombardier believes Delta operating the CSeries will be the tipping point that puts the aircraft in high demand all over the world.

Bombardier won breakthrough orders for the CSeries from Delta and Air Canada (45 firm CS300s) last year, but has not announced any new orders since—despite CS100s and CS300s in service with Swiss International Air Lines (SWISS) and Latvia’s airBaltic performing quite well. Delta’s first CSeries delivery is scheduled for the spring of 2018.

“Once Delta and Air Canada start flying those birds in the US and Canada, [airlines will see] the CASM is phenomenal,” Bombardier VP-regional aircraft Kevin Smith told reporters this week at the Regional Airline Association convention in West Palm Beach, Florida. “When Delta starts operating the aircraft out of New York and Los Angeles and then Seattle, and Air Canada takes delivery in the spring of 2019, the aircraft will be ubiquitous. It will be everywhere.”

At that point, US passengers (and in turn the US consumer media) are sure to take notice of the aircraft’s comfort, Bombardier believes. The growing buzz about the aircraft’s comfort combined with its cost performance in service in both North America and Europe will convince airlines in the US and globally that it is a must-have. At least, that is the theory, which largely hinges on Delta operating the CS100 out of major US markets (with an assist from Air Canada, which is expected to operate CS300s from US cities to Canadian hubs to connect passengers to the airline’s Boeing 787 network).

Given this, Bombardier is sure to plow forward undaunted with CSeries deliveries to Delta.

As for the duty actually going into place? It remains to be seen how this will play out now that the Commerce Department has raised the specter of a 219.3% duty. The CSeries is a globally manufactured aircraft. Its geared turbofan (GTF) engine, one of the aircraft’s big calling cards in terms of fuel efficiency and low noise levels, is made in the US by Pratt & Whitney. Its wings are produced in Northern Ireland. So the duty won’t just be a penalty on Bombardier and Canada.

Pratt parent United Technologies Corp. (UTC), based in Connecticut, employs more than 200,000 people and generates more than $57 billion in annual revenue. A duty on the CSeries, particularly one that makes sales to US airlines less likely, inevitably will hurt UTC. Is the Trump administration prepared for collateral damage to US companies and workers? And UK Prime Minister Theresa May has already expressed her disappointment with the potential CSeries duty given its implications on wing production in Northern Ireland. Does the Trump administration want a trade tiff with the UK as it tries to negotiate a post-Brexit trade deal with the UK?

[NOTE (9/28): A reader correctly points out that Pratt's final assembly line for the PW1500G, the variant of the GTF powering the CSeries, is located in Mirabel, Quebec. But the GTF is undeniably a US product, as are about half of the components on the CSeries. And many of the PW1500G's parts are manufactured in the US before being shipped to Mirabel for final assembly. The larger point is that any measure that diminishes CSeries sales prospects will inevitably hurt Pratt and its parent UTC, a major US corporation, as well.]

 

http://atwonline.com/blog/why-delta-cseries-order-worth-all-trouble-bombardier?NL=AW-05&Issue=AW-05_20170928_AW-05_558&sfvc4enews=42&cl=article_4&utm_rid=CPEN1000000441429&utm_campaign=11913&utm_medium=email&elq2=e0101820595344ad9d4b87a7e8e7695d

[Guest]

Yet another voice supporting the CSeries:

Bombardier CSeries: The ultra-comfortable plane that airlines don't think you want

Hugh Morris

Bombardier CS 100 C Series jet during its delivery to Swiss last year. Only two European carriers fly the CSeries of 100- and 145-passengers planes - Swiss and AirBaltic. Photo: Bloomberg

Bombardier, the aircraft manufacturer at the centre of a dispute which threatens to damage relations between the US and UK, is very proud of its new plane.

The CSeries, introduced to the public last year, promises "unparalleled comfort" in a single-aisle cabin, offering wider seats, bigger overhead compartments and larger windows. It was pioneered for airlines who wanted to give their customers that little bit more, while also enjoying fuel efficiency and reduced noise pollution.

The only problem? Very few airlines are interested.

The CSeries, introduced to the public last year, promises "unparalleled comfort" in a single-aisle cabin, offering wider seats, bigger overhead compartments and larger windows. Photo: Bloomberg

Only two European carriers fly the CSeries of 100- and 145-passengers planes - Swiss and AirBaltic, and though they praise the performance of the aircraft and have more on the order books, there is concern that few others will plump to stray from their traditional Boeing and Airbus models in the name of passenger comfort.

Who is Bombardier?

"Bombardier is the world's leading manufacturer of both planes and trains," says the company. That is to say it leads among companies that make both forms of transit - not that it leads in both markets.

In fact, when it comes to aircraft it is small fry. The Canadian company's aerospace division had a revenue of $US9.2 billion ($A11.7 billion) in 2016, next to Boeing's $US65 billion and Airbus's $US66.6 billion. Boeing, based in Seattle, and Airbus, in Toulouse, are the two giants of the aviation industry.

However, it has forged a path for itself in the smaller business jet market, with aircraft such as the Learjet, Challenger and Global.

The manufacturer, one of Northern Ireland's biggest employers, has become a pawn in a larger battle between Boeing and Airbus about public subsidies.

The fundamental difference is that with five seats to a row, rather than six, passengers (of the CS100) enjoy seats with 18.5 inch widths (45.7cm) and 30-32 inches (76-81cm) of legroom in economy; compared to say, Qantas' Boeing 737 layout, which allows for 17-inch widths and 30 inches of legroom.

AirBaltic, the first airline in the world to fly the CS300 (the CS100's larger sister), with seven of an order of 20 currently in its possession, said the plane has "performed beyond the company's expectations, delivering better overall performance, fuel efficiency and convenience for both staff and the passengers".

With five seats to a row, rather than six, passengers of the CS100 enjoy seats with 18.5 inch widths (45.7cm) and 30-32 inches (76-81cm) of legroom in economy. Photo: Bloomberg

In a statement, the airline, which operates out of Riga, Latvia, flying to 68 destinations, said: "The new CS300 aircraft with 145 seats, offers excellent flying experience with benefits for passengers, such as wider seats, larger windows, more hand luggage space in the cabin, and improved lavatories."

Why is nobody buying it?

Word on the market is that airlines want bigger planes that fly more passengers, earning them more revenue and enabling them to keep fares down.

The U.S Commerce Department slapped duties of nearly 220 per cent on Canada's Bombardier C Series last month. Photo: AP

"Passengers get into anything that flies if the ticket is cheap," AirBaltic chief executive Martin Gauss told the Wall Street Journal.

Despite concerns that Bombardier's order list (about 350) pales in comparison to the likes of Boeing (more than 3800) and Airbus (more than 5100), the manufacturer was upbeat in a recent assessment of its 20-year forecast.

"The outlook for our markets is strong," said president Fred Cromer. "We are the only manufacturer with a solution for any type of business model in the 60- to 150-seat segment, and we are well positioned to capture the value from the exciting opportunities outlined in this market forecast."

The Canadian company's aerospace division had a revenue of $US9.2 billion ($A11.7 billion) in 2016, next to Boeing's $US65 billion and Airbus's $US66.6 billion.  Photo: Bloomberg

But analysts say that the Bombardier's pricing of the CSeries was too high for airlines to consider it as a single-aisle alternative.

See also: Six incredible planes you'll never get to fly on

What is the new dispute about?

The US is poised to impose punitive tariffs on Bombardier after the company lost the first round of an international trade dispute with Boeing.

Boeing's battle over Bombardier is indirectly related to its long-running feud with Airbus. The pair are the biggest aircraft makers in the world: one American, the other European, headquartered in France.

As it has rumbled on, the dispute is now being fought for them by proxy between the European and US governments.

With regards to Bombardier, Boeing claims the Canadian company received illegal support for its C-series small airliner when the province of Quebec took a $US1 billion stake in the troubled programme. This support ultimately helped Bombardier agree a sale of up to 125 of airliners to US carrier Delta at big discount.

So sensitive is the row - with the fate of 4500 jobs in Northern Ireland on the line - that Theresa May asked Donald Trump to intervene earlier this month. Awkwardly, Boeing has reminded the prime minister that it employs 16,500 people in its supply chain in the UK.

One of the most interesting things about the case is that Boeing hasn't really seen sales snatched away by Delta's purchase of the C-Series. The Bombardier jet is smaller than Boeing's smallest craft, the 737; essentially they are targeting different markets.

So how does Boeing's sabre-rattling over Bombardier relate to Airbus? Well, the US giant doesn't want to see another potential competitor supported in the same way that has allowed Airbus to come from nothing in the Seventies to being an equal rival today.

In fact, both sides claim the other has benefited from state aid at some point - given the high cost of producing aircraft, state subsidies have been an inevitable part of the aerospace sector for a long time. Unsurprisingly, some have accused Boeing of hypocrisy in taking on Bombardier, a much smaller rival, over the issue.

Where does this leave Bombardier? The company is already looking ahead to a ruling next year from the International Trade Commission on whether Boeing suffered any injury from the C Series. It is confident in its case: "Because Boeing years ago abandoned the market the C Series serves, there is no harm," it says. This battle has much further to run. - Alan Tovey & Jon Yeomans

Read more: http://www.traveller.com.au/bombardier-cseries-the-ultracomfortable-plane-that-airlines-dont-think-you-want-gyr8m7#ixzz4udppXaAu
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[Maverick]

Bombardier needs another blue-chip customer right now but that is unlikely with the US dept. of Commerce duty hanging over their head.

 I'm beginning to think that this could ultimately kill Bombardier...

[thor]

6 hours ago, Maverick said:

Bombardier needs another blue-chip customer right now but that is unlikely with the US dept. of Commerce duty hanging over their head.

 I'm beginning to think that this could ultimately kill Bombardier...

Big loss for Canada, bigger loss for Quebec. Although I don't have any sympathy for Quebec which wouldn't allow the east pipeline expansion. That's a much bigger loss for Canada. 

[J.O.]

1 hour ago, thor said:

Although I don't have any sympathy for Quebec which wouldn't allow the east pipeline expansion. That's a much bigger loss for Canada. 

I'm confused. It's my understanding that the Trans Mountain expansion was approved under the same NEB oversight requirements as would have applied to Energy East. The Premier of NB says this was an economic decision by TCPL. Given what it means to his province, it wouldn't be in his best interest to sugar coat this.

[Guest]

2 hours ago, J.O. said:

I'm confused. It's my understanding that the Trans Mountain expansion was approved under the same NEB oversight requirements as would have applied to Energy East. The Premier of NB says this was an economic decision by TCPL. Given what it means to his province, it wouldn't be in his best interest to sugar coat this.

You forgot that the NEB tossed in a review of upload and download reviews after the initial approval. Only sugar coat is why they suddenly changed the playing field, I smell liberal intervention based on the input from YUL.

[Fido]

Dump Bombardier.

[Guest]

17 hours ago, Fido said:

Dump Bombardier.

It will surprise you but I don't agree.  They have an aircraft that exceeds the Arrow, we lost that one due to a Conservative knuckling under to US pressure, I hope we don't loose this one...   I for one don't mind paying to keep it alive, a lot better that lots of $$$ for illegal immigrants, righting pass wrongs etc etc. Keeping the Cseries alive has long term befits for our industry at little cost to the tax payer.  After-all, the libs have an open check book so why not spend it on our future in Aviation?.  Maybe if Justin cut down his travel expenses........

[boestar]

This would be a great opportunity for a company like Chorus Leasing to jump in and get the aircraft and lease them to Delta.  That would avoid the tariff and keep the money in Canada.

It would also entice others to do the same with a Canadian Leasing company.