Boeing (BOE, Washington National) has appealed to the United States International Trade Commission (ITC) to penalise Bombardier Aerospace (BBA, Montréal Trudeau) for selling its C Series aircraft at below market value in the US, reports Bloomberg.
The dumping allegations single out the purchase by Delta Air Lines (DL, Atlanta Hartsfield Jackson) of Bombardier's C Series jets. Delta penned the deal last April, committing to buy seventy-five A220-100 jets with the option for an additional fifty. Boeing's complaint says that the jets were sold for USD19.6 million per aircraft, far below their USD33.2 million manufacturing cost. At the time, the deal was speculated to be worth around USD5.6 billion at list prices. At the prices quoted by Boeing, the actual deal would be closer to USD1.5 billion, or a generous discount of almost 75%.
"Propelled by massive, supply-creating and illegal government subsidies, Bombardier Inc. has embarked on an aggressive campaign to dump its C Series aircraft in the United States," Boeing's statement said.
In a response, Bombardier has said that it is scrutinising the complaint.
"Bombardier structures its commercial dealings to ensure compliance with the laws and regulations of the jurisdictions in which we operate, including those issues raised by Boeing," the Canadian manufacturer said.
A Bombardier spokesperson, Simon Letendre, is quoted in the Montreal Gazette as saying that Boeing's figures are incorrect. "That allegation is absurd," Letendre said.
Canada's Economic Development Minister, Navdeep Bains, has also come to Bombardier's defence, vowing to vigorously defend the allegations.
Should the ITC determine that Bombardier is dumping, the jets could be hit with significant duties.
Boeing joins Embraer (EMB, São José dos Campos Professor Urbano Ernesto Stumpf), which has also lodged a complaint against Bombardier. The Brazilian manufacturer complained to the World Trade Organisation in February about interest-free loans made by the Canadian government to Bombardier to the tune of CAD372.5 million. Embraer argues that the loans constitute illegal subsidies.
