Bombardier Inc. of Canada and The Boeing Company of the U.S. are caught amid a legal battle that could have serious financial implications for either company.
Bombardier’s newest family of aircraft products, the CSeries, has become a subject of financial and political debate over the past few months. Boeing is petitioning the U.S. Commerce Department and the U.S. International Trade Commission to investigate Bombardier and the Canadian government for ‘dumping’ the CSeries aircraft in the American aviation market at unfairly low prices.
In Boeing’s 100-page complaint, the company accuses the latter of selling their aircraft at a lower sales price than in that company’s country of origin, or at a price that is lower than the cost of production.
Bombardier has rec-eived subsidies from the Canadian and British governments since 2005 due to the CSeries program’s staggering development costs, which rose to $4.4 billion.
This put Bombardier under the risk of bankruptcy without the help of subsidy funding, which totaled $5 billion in 2015.
The company’s saving grace came in 2016 when Delta announced its intention of adding 75 CS100s to its fleet.
The aircraft sold at a price of $19.6 million a unit, which Boeing criticized as being an “absurdly low” selling price for a product that cost $33.2 million to produce.
If Bombardier is found guilty of dumping, the company will face a series of tariffs from the U.S. Commerce Department and International Trade Commission.
In recent weeks, the dispute between the aircraft manufactures has been gaining the attention of world leaders. Prime Ministers Justin Trudeau and Theresa May of Canada and Great Britain have recently expressed their disapproval for Boeing’s behavior in trying to impose a trade complaint against the Canadian aerospace manufacturer.
In a demonstration of retaliation, Trudeau is now debating whether Canada should carry through an agreement they had made with Boeing to purchase 18 F/A-18 Super Hornet fighters for the Royal Canadian Air Force. “We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business.”
Bombardier is also a major employer in Northern Ireland. May stressed during a phone call with U.S. President Donald Trump that if the company were to face the legal penalties, it could put the stability of approximately 4,500 jobs in the U.K. at risk.
The Bombardier CSeries is a line of regional airliners that was first launched in 2013 with the aim of developing a competitive airliner that would put a stake for Bombardier in the world market.
The aircraft employ the use of advanced composite materials for the wings, empennage, and control surfaces as well as an aluminum-lithium alloy for the fuselage.
In addition, the use of geared turbofans makes the aircraft quiet.
The aircraft has five abreast seating with a cabin that gives passengers unprecedented levels of ergonomics by offering oversized luggage compartments and windows and 19 inch wide seats, which per Bombardier, is the widest on any single-aisle commercial airliner in the world.