Delta obliged to take Canadian-built C Series unless contract renegotiated: USITC

By Canadian Press
February 14, 2018 - 6:07pm

MONTREAL — The U.S. trade agency that handed Bombardier Inc. a big victory last month says Delta Air Lines could still import C Series from Canada.

The American carrier has said it will delay deliveries until the planes they ordered are built at an Airbus and Bombardier C Series assembly line that will be set up in Alabama.

However, the U.S. International Trade Commission says Delta is contractually obligated to take delivery of the planes from Canada unless the deal is renegotiated.

"We find that Delta might indeed import at least some, if not all, of the CS100s due to be delivered pending any renegotiation of the terms of its contract with Bombardier," said a 194-page report issued late Wednesday.

Bombardier declined to comment on the report, saying it will take "the necessary time to digest its content before making any comment."

Commissioners voted unanimously Jan. 26 that the C Series hasn't caused Boeing material harm even though the Department of Commerce concluded that the planes are sold in the U.S. at less than fair value and are subsidized by the Canadian government.

The ruling means the anti-dumping and countervailing duties totalling 292.21 per cent that were imposed by the U.S. Department of Commerce won't be applied.

In its report spelling reasons for its decision, commissioners said they concluded that Boeing didn't lose revenues from United or Delta sales campaigns because it didn't offer a competitive product.

It also said C Series imports and prices for the aircraft won't significantly depress prices for Boeing planes or spur demand for more imports.

Part of its argument centres on evidence — though much of the numerical details have been blacked out in the report — that there is no evidence of imminent C Series purchases in the U.S.

The commission noted there has been no sales momentum for C Series in the U.S. since the Delta order, with no carrier signing purchase deals.

The USITC also rejected Boeing's claim that the C Series imperilled its 737 Max 7 program, which hasn't received any orders since 2013.

"The program’s commercial performance largely reflects the up-gauging trend among U.S. airlines and Boeing’s success at selling larger, more profitable single-aisle (aircraft)."

The commission added that it is obliged not to determine a threat based on "mere conjecture or supposition."

The report was released a day before Bombardier is to disclose its fourth-quarter and full-year results.

 

Follow @RossMarowits on Twitter.

 

Companies in this story: (TSX:BBD.B)

Ross Marowits, The Canadian Press

B.C. man digs out moose trapped upside down in roadside snowbank

Join the Discussion

We are happy to provide a forum for commenting and discussion. Please respect and abide by the house rules: Keep it clean, keep it civil, keep it truthful, stay on topic, be responsible, share your knowledge, and please suggest removal of comments that violate these standards. See full commenting rules.