Boeing slams Airbus, Bombardier deal as means to ‘skirt’ US trade findings

FAN Editor

European airplane manufacturer Airbus announced it would take a majority stake in Canadian plane maker Bombardier’s C-Series jet program on Monday, a deal viewed by Airbus’ main competitor – Boeing (BA) – as a way to potentially sidestep recent findings by U.S. trade courts.

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Airbus has acquired a 50.01% stake in the Bombardier’s C-Series jet platform, a narrower plane that Airbus sees as having significant future growth potential, giving Bombardier a new platform for its product outside of the U.S.

Boeing Reaction

In a statement, Boeing suggested Airbus and Bombardier were attempting to dodge a ruling by a U.S. trade court made earlier this month.

“This looks like a questionable deal between two heavily state-subsidized competitors to skirt the recent findings of the U.S. government,” a company spokesperson said late Monday. “Our position remains that everyone should play by the same rules for free and fair trade to work.”

Between the last week of September and the first week of October, the U.S. Commerce Department hit Canadian jetliners with two tariffs cumulatively valued at about 300%, siding with Boeing in its complaint that Bombardier was unloading jets into the U.S. market at unfairly low prices.

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The complaint was in regards to a deal made in 2016 between Delta Air Lines (DAL) and Bombardier for 75 C-Series jets.

If the tariffs are upheld by the U.S. International Trade Commission, it could price Bombardier out of the U.S. market completely, according to some experts.

Neither Bombardier nor Airbus immediately responded to FOX Business’ requests for comments about Boeing’s suggestion that the recent deal was made to circumvent the U.S. ruling.

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Delta confirmed in a statement that its order for 75 Bombardier jets is still on schedule.

The Deal

Airbus is essentially putting no equity into the deal with Bombardier, though it will be responsible for commercial sales and marketing. Meanwhile, Bombardier has agreed to finance up to $700 million for any near-term funding needs, according to The Wall Street Journal.

Airbus and Boeing have largely held a duopoly on the commercial aerospace industry and some believe Airbus’ deal with Bombardier could shake up the sector.

About the C-Series

The C-Series jet is a single-aisle aircraft that seats between 100-150 passengers. In a press release, Airbus said “the single aisle market” could represent as much as 70% of future global demand for aircraft. Bombardier said it believes the smaller jetliner could “represent more than 6,000 new aircraft over the next 20 years.”

By comparison, Boeing’s 737 Next-Generation family of jets seats about 150-220 passengers.

On Tuesday morning, shares of Boeing were down less than 1%, while Bombardier was up nearly 20% and Airbus rose more than 3%.

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