Boeing trade complaint didn't force Airbus deal, says Bombardier chief

Key Points
  • Bombardier is attempting to woo buyers at the Dubai Airshow with its new C-series jet
  • The plane is at the center of a U.S.-Canada trade dispute
  • Airbus has now taken on a majority stake in the struggling program
US import duty is an attack against innovation: Bombardier

The president of Bombardier Commercial Aircraft has claimed that a deal to sell a controlling stake in the C-series program is not related to legal action triggered by U.S. firm Boeing.

The U.S. administration, pressed by Boeing, slapped a 300 percent trade tariff on Bombardier, accusing the Canadian aerospace firm of both receiving state aid and potentially "dumping" its new plane on the U.S. market.

Now Bombardier has struck a deal with European aerospace giant Airbus, who has agreed to develop, market and sell the Bombardier jet.

A Bombardier CS300 C Series aircraft, manufactured by Bombardier Inc., lands after a flying display on day two of the 51st International Paris Air Show in Paris, France, on Tuesday, June 16, 2015.
Jasper Juinen | Bloomberg | Getty Images

Speaking at the Dubai Airshow Sunday, President of Bombardier Commercial Aircraft, Fred Cromer, said the deal — which cost Airbus $1 — was about using Airbus's global footprint to get the best out of the jet.

"It really doesn't have anything to do with the Boeing complaint. We continue to work through those issues, " said Cromer.

Bombardier believes there is a global market for at least 6,000 planes that seat between 100 and 150 people over the next 20 years. Cromer said he believed that the C-Series can account for as much as half of that demand.

"The assumption of achieving 50 percent market share is something very reasonable and with the Airbus partnership, there is scope to potentially exceed that," Cromer said.

Boeing's complaint

The dispute centers on alleged illegal subsidies that Bombardier received for its C-Series program, a 100 to 150-seat jet that has been in the skies since 2016.

The U.S. Commerce Department, with the support of President Donald Trump, took up a Boeing complaint that Bombardier received state aid as far back as 2008 in order to make the program a success. Boeing's second part of the complaint was that Bombardier could potentially "dump" the aircraft to buyers at below-market prices.

Boeing has also claimed that Bombardier's deal with Delta Airlines will see 75 C-Series planes sold for $19.6 million apiece, way below production cost.

The Department of Commerce asked Bombardier to provide information but the Canadian company refused, claiming it would provide rivals with a look into its business and pricing structure.

After this refusal, U.S. authorities upheld the Boeing complaint and issued Bombardier with a preliminary 300 percent anti-dumping tariff on its C-Series.

The CS100 and CS300 versions of the Bombardier plane are in use by Swiss Air and Air Baltic. In the United States, Bombardier has sold 75 of its new C-Series planes to Delta Airlines.

Cromer told CNBC in June that Boeing was attempting to stifle further Bombardier sales and that the wider industry viewed Boeing's litigation as "an attack on innovation."

Cromer added that Boeing doesn't even produce a plane that serves 100 passengers and so the complaint has little merit.