Boeing’s protectionist push would be felt by consumers and carriers across the world

Boeing’s recent petition seeking to impose a tariff on C Series aircraft sold in the United States is an unfounded assault on airlines, the travelling public and innovation in the aerospace industry. This protectionist ploy may help enhance Boeing’s bottom line and dominant market position, but if it prevails, the harm to the industry and consumers will be felt far and wide.

We at Bombardier did not expect Boeing to welcome the C Series. We were, however, very disappointed that Boeing would make so many false claims in its petition to the U.S. government. We have an obligation, on behalf of our customers, the flying public and the tens of thousands of jobs that depend on the C Series in Canada and the United States, to set the public record straight.

As a starting point, Boeing alleges Bombardier sold C Series aircraft for $19.6-million (U.S.) apiece. This is wrong. It is nothing more than a back-of-the-envelope guess that is millions of dollars off the mark. In fact, buried in Boeing’s filing, it discloses that this alleged “price” is based on an affidavit from a Boeing executive, with no firsthand knowledge of any price actually paid for any C Series aircraft.

Boeing also suggests that Bombardier sold the C Series to Delta at an unusual discount. This is wrong and it is ironic given that Boeing famously sold hundreds of its new 787 aircraft at steep discounts, including planes sold into Canada.

Boeing also incorrectly claims that its aircraft compete directly with the C Series. Boeing’s claim is contradicted by the company’s own executives, who publicly stated that their 737 Max family does not include an aircraft that actually competes with the C Series model selected by Delta. Indeed, Boeing did not even participate in the competition at Delta.

Airlines base purchasing decisions on a number of factors, including superior design. For Delta, the C Series superior design was a critical factor. As Delta’s then-CEO said after the selection, “Let’s be blunt about it – Bombardier created a better piece of technology than the other guys.”

Boeing’s attempt to set up artificial market barriers for the C Series should be seen for what it is – an attempt to force carriers to buy less efficient planes with configurations airlines do not want and with economics that do not deliver maximum value.

Finally, Boeing’s petition brazenly distorts the government investments in Bombardier. It is well known that all countries with major aerospace industries provide support for their local companies. There are clear rules governing the boundaries of this support, which Bombardier and its government investors have scrupulously followed. Boeing, on the other hand, has a record of noncompliance, and the WTO has repeatedly found that Boeing benefited from massive illegal subsidies supporting the development of its new aircraft.

At Bombardier, we believe that open and fair competition serves a very important role in pushing the industry to innovate; to design and build aircraft that are more efficient, more reliable and more environmentally friendly. We would prefer to compete in the marketplace on the basis of our superior aircraft, and will demonstrate that commitment in the U.S. government’s proceeding.

The C Series represents significant advances in commercial aviation. Its development and production represent thousands of high-skilled jobs in Canada and in the United States. We are proud of our employees, investors and suppliers who have worked together to bring this plane to the marketplace, and we look forward to delivering the C Series to our many existing and future customers.

Originaly published in the Globe and Mail, May 03, 2017

 

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