jet trade wars

Oct 17, 2017

Efforts to crush Canada’s jet ambitions may have just failed

Making the Canadian CSeries jet a much bigger threat to its 737 family was probably not what Boeing intended when it tried to cripple it being sold cheaply to US carriers

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

CSeries300s could win orders off 737s at the low capacity end of the market

It seems that the answer to the US imposing ruinous tariffs on the sale of Canadian CSeries regional jets to American carriers at the behest of Boeing might be to put them together at a final assembly line in Alabama.

The 75 CSeries 100s that major US carrier Delta had ordered will no longer be dutiable imports, but a product ‘made in the USA’.

But, then again there may be more twists and turns.

Earlier today Airbus and Quebec based Bombardier announced they were forming a C Series Aircraft Limited Partnership (CSALP), to make and sell the CSeries, a two model single aisle family with nominal capacity of between 100-150 seats.

Airbus will acquire a 50.01% interest in CSALP. Bombardier and Investissement Québec (IQ) will own approximately 31% and 19% respectively.

The key points are that the :

  • Partnership brings together two complementary product lines, with the 100-150 seat market segment expected to represent more than 6,000 new aircraft over the next 20 years
  • Combination of Airbus’ global reach and scale with Bombardier’s newest aircraft family will create significant value for customers, suppliers, employees and shareholders
  • Significant C Series production costs savings anticipated by leveraging Airbus’ supply chain expertise
  • In a Commitment to Québec: C Series Aircraft Limited Partnership headquarters and primary assembly are to remain in Québec, with the support of both companies’ global supply chains
  • Airbus’ global industrial footprint expands with the C Series Final Assembly Line in Canada, resulting in a positive impact on operations in Québec and across the country, and
  • A growing market for the C Series results in a second Final Assembly Line in Mobile, Alabama, serving U.S. customers.

Airbus Chief Executive Officer Tom Enders said the CSeries is a great fit with the consortium’s existing single-aisle aircraft family and rapidly extends our product offering into a fast growing market sector.

“Not only will this partnership secure the CSeries and its industrial operations in Canada, the UK and China, but we also bring new jobs to the US. Airbus will benefit from strengthening its product portfolio in the high-volume single-aisle market, offering superior value to our airline customers worldwide,” Mr Enders said.

The natural competitor to the CSeries today is the Brazilian designed and made Embraer E2 series of generally smaller capacity jets. The CSeries and the corresponding Embraers are the only regional jets in production or undergoing certification that could replace aging fleets of Fokker F70s and F100s, and Boeing 717s. The Australian market for new regional jets in the 2020s could readily exceed 100 aircraft.


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48 thoughts on “Efforts to crush Canada’s jet ambitions may have just failed

  1. Jacob HSR

    So 2 final assembly lines? One in Canada and another in USA?

    Australia has a free trade agreement with USA, so perhaps we will get CS300 aircraft from USA? Or are leased aircraft not regarded as imports?

  2. caf

    Will the jets made by CSALP be branded as Bombardier or Airbus?

    1. Jacob HSR

      Bombardierbus perhaps.

      Or more likely, Airbus Bombardier CS300.

  3. comet

    So the CSeries rises up like a phoenix to become stronger than ever.

  4. comet

    Airbus embraces Bombardier, while Boeing feels threatened by it and tries to stomp it out.

    Airbus now has a wide product portfolio, with ATR regional turboprops, CSeries regional jets, all the way up to the A380.

    Maybe Boeing should go and give Embraer a hug.

    1. Tango

      They are, they just are hugging their sister not the hot date that BBD is.

      1. Kapo

        Gold Tango!
        You can be assured that either way this plays out Trump will claim the credit for protecting US jobs or bringing in US jobs.

        1. Tango

          I am afraid its vastly easier to list what Trump doesn’t claim credit for.

          If its not zero its very very close.

  5. Mark Skinner

    Now, let me see if I have this right. As a result of Boeing and the Trump administration’s attempt at lawfare against the Canadians, Airbus now has a significant addition to its portfolio for a song, and the Canadian Government will save a few billions on not buying the Boeing F35 fighter. The position being that Airbus now has a modern portfolio of aircraft from the 300 series from Bombardier through to the A380, and Boeing has the 717 and 737, 777 and 787 as its portfolio.

    Hm. Now, I wonder if Boeing would have been better a few years ago to concentrate on building aeroplanes rather than union busting, lawfare, lobbying, politicking, financial engineering, and outsourcing? You know, old fashioned building a good product using a skilled and loyal workforce?

    1. Mark Skinner

      PS, the ATRs are just icing on the cake.

    2. caf

      The F35 is a Lockheed Martin aircraft.

      1. Rais

        The F35 is a Lockheed Martin I understand, but is it an aircraft? I thought aircraft had to be able to fly?

        1. Tango

          No, its flies, just not all that well or often.

          1. Tango

            ATR is not involved in this, nor is the Q400

      2. brian crooks

        the f35 is a lockheed martin lemon that does`t fly on wet days and not very far on fine days without refuelling a couple of times, they are thinking of changing its name to howards folly or leyland p76

        1. Tango

          Over here we would call it an Edsel, though that is probably an insult to that otherwise fine car.

    3. Tango

      I don’t know that Trump had anything to do with this.

      And Airbus gets to sell Typhoons!

        1. Tango

          Thank you, no intent to defend Trump if that was a hold over.

          Yea, the guy who added the lucre to it is another billionaire and Trump appointee (a lot of those positions have not been filled, hard to keep up with it)

  6. StickShaker

    This is a brilliant move by Airbus. Assembling the C Series in Alabama completely negates Boeing’s trade complaint and (more importantly) gives the C Series the benefit of the massive financial and engineering resources of a manufacturer the size of Airbus. It also neatly dovetails with the reducing R&D loads as the 350-1000 and 320 Neo programs mature.
    Orders for the C Series have been a bit thin on the ground, this can be expected to change when potential customers know the program has the support of Airbus – it injects a lot of confidence into the equation. If you want to buy a CS-100 you can now be assured it will have the necessary logistics support around the globe – this would have been a nagging doubt with a small OEM such as Bombardier stretched to its limits.
    Boeing along with the US DOC set out to kill the C Series using dubious means that would not stand up to the slightest scrutiny. They may now get their just deserts.

    1. Tango

      Still has to be adjudicated.

      Subsidies may still apply to the original design.

      Vaslty stronger case with Airbus in the mix.

      ATR is not part of this deal, just the C Series.

  7. Jacob HSR

    The Pratt and Whitney engines on these are said to be 75% quieter than the engines on other aircraft. The curfews at SYD and ADL airports should be reviewed.

    1. Tango

      Both P&W and LEAP meet airport specifications.

      If people don’t want jet noise they should not buy houses on the pathway or around airports.

      1. PaulM

        Tango, your comment that “If people don’t want jet noise they should not buy houses on the pathway or around airports.” displays a fair degree of ignorance. It may surprise you to know that people can live in areas which subsequently become affected by aircraft noise without having moved there after the start of the noise. Two cases in point (one of which is ancient history).
        1. I grew up in a house 400 m off the flight path into Adelaide airport, which my parents bought in 1954. That was 10 years before the first 727 came screaming in.
        2. Sydney airport had been around for decades before the ‘third runway’ was installed to the east of the main north-south runway. Residents in its flight path would have been there before the ‘third’ runway was planned.
        Having said that, and with vivid memories of that first 727, I’d also comment that aircraft are much quieter now, and curfews should be reviewed, and maybe based on certified measured noise levels for aircraft type rather than blanket bans.

        1. Tango

          Paul: I think you proved my point. They did buy close to an airport and its going to have some noise.

          Yes they are quieter, and agreed thought should be given to the situation.

    2. PaulM

      and where are the P&W engines made? Has Donald Trump asked that?

      1. Tango

        Paul: You assume Trump would ask anything of anyone, and of course that infers thought process, we can forget any of that going on.

        Canada for that version for the C series actually .

        Parts come from all over, including US.

        As well as US components and system on the aircraft.

        Also from some close allies. But that is irrelevant. Burn it down is the mantre.

  8. Tango

    This has a lot of implications,

    First, the C Series is not a regional jet. Its got Intercontinental (US) range.

    The C 500 would eat at the bottom of the A320/737-8, but it would not have the range.

    Its going to be interesting. Just when things were getting a bit too dull in the aircraft world.

    First being it still as to be hashed out that assembly in US avoid the issue. BBD had th capability to do the same think in Kansas, so not an automatic, laws can be pretty squirrely.

    I do see this freeing Airbus up to up gauge the A321 and possibly the A320.


    1. Dan Dair

      The C-series was never envisaged as anything other than a regional/feeder airliner.
      No matter what it’s specifications, it was never marketed as a competitor to either the A320 or the B737.
      (which is what makes Boeing’s protests so strange.?)

      Should the Delta C-series aircraft be assembled in Alabama, Boeing & the DoT are going to have to make a hell of a case as to why it is illicit, when any number of ‘acceptable’ Made-in-the-USA products are effectively indistinguishable from the C-series
      the C-series has genuinely American made P&W GTF engines stuck to it.!!!

      I agree that this may actually help Airbus,
      as they may well now consider dropping the A318 & 9 &
      perhaps develop the A320/321 into the A322 as a genuine B757 market replacement.?
      Boeing has spent a lot of time talking about a MoM aircraft, whilst actually having dropped the model which epitomised that particular concept.?

      This situation might allow Airbus to create an A322/MoM, whilst at the same time freeing-up a whole area of market-share because Bombardier have done such a great job with the C-series,
      in all respects apart from the financial muscle to actually get over the finish line.?

      1. Tango

        I am sorry to burst a bubble Dan. The author of this part of the Leeham blog is an engineer, so you can take his tech assesment to the bank (and a very good one by the way.)

        1. Dan Dair

          I’m not arguing with what the engineers say airframe might actually be capable of;
          The point I was trying to make was about how Bombardier has marketed this model.?
          It’s always been a feederliner.
          It might well have the capability to successfully grow into the small airliner category, but in its current form, it’s not a ‘proper’ airliner yet.!!

          1. Tango

            Dan, I can see you arguing with me, but you are now arguing with a highly accomplished engineer. Amazing.

            Over here we say if it flies like a duck, it quacks like a duck, it has webbed feet like a duct, it has a duck bill and it has Duck DNA, then its a duck.

            And you might want to review US Scope clauses and how that separate out regional jets from airliners.

            I will give you a hint, the C Series does not fall in the regional category, it requires (by contracts not arbitrary designation) a full rated paid airline crew.

    2. StickShaker

      Airbus already assembles the 320 in Alabama – the 320 is a direct competitor to the 737 and it has sold thousands of frames. The case for preventing assembly of the C Series in the US is essentially non existent. I’m sure the governor of Alabama will have a different point of view to Boeing.
      This is not just a strategic blunder by Boeing, it represents the sheer folly of using government agencies to use and abuse legislation for blatant protectionism.
      Boeing are now in the position of being unable to compete at the top end of the narrow body market and unable to compete at the bottom end.
      A CS500 model with 160 or so seats might not have the range of the 737-800 but not all operators need that range – the 738 is overkill in that situation. The C Series will also have superior operating costs.
      The acquisition of the C Series program by Airbus will have profound effects on the future narrow body market.

      1. Tango

        All entities use the government to their benefit if they can.

        It really reflects the Arogance of Boeing. Having had a brush with a close to massive failure (787) you would think a bit of h8imitly wold show thorugh, but nto.

        You are right, the single aisle is an odd market. As the US has extensive population on East and West Coast (most of it in fact) trancontianl range is a highly desierable feature (and more so when all the other offering are gone).

        But a lot of the flights are also under 1000 miles as there are a lot of Midwest cities across the Heatland that add up to maybe a 1/3 of the whole populion (Texas is an odd thing by itself that is large but does play into the flight ops (Southwest Home etc)

        So they fly a big heavye aircraft into smaller places and average things out.

        But we also have lost a huge amount of connections as there is a limit and the costs are too high.

        Ergo the C Series with its much better economics fits into that.

        It won’t displace the 737/A320 but it is going to be substantial as its also Trans Con capable with fuel. . Ergo it can make any coast from anywhere if the route calls for it and efficient

        Scope clause plays in and this may allow an out (its in scope, but can make money)

        I think its as much a game changer as the 787.

        Made here or not, its a good thing for the US, bonus is there is a large US content on it as well.

        And as you noted, the twist it puts in the narrow body is a dart to the heart. What does the 737RS look like now? At best its a C Series me to, and its going to be WAY behind it.

        A new 737RS can’t be too big or it can’t compete with the C.

        The NMA may offer an out, but in the meantime, its still going to cut and the C-500 would be even more so (I doubt Airbus wants that right now but its a hell of a response or another dagger to Boeing when they do get the 100 and 300 up running, orders filled and they want to take the next step)

        Stupid Boeing

  9. Dan Dair

    Airbus & Bombardier were in talks a few of months ago, but obviously, what the two sides wanted at the time was that bit too far apart.?

    Since the Boeing & US DoT fiasco, obviously the Bombardier/Canadian Investment Office position has changed a bit & that movement has been enough for the two parties to be able to now reach agreement.

    I’m incredibly pleased about this as an outcome;
    It supports the C-series with the Airbus brand & back-up,
    It circumvents the Boeing whinge,
    It makes the Boeing whinge look even more stupid,
    bearing in mind that there is no & hasn’t been for decades, comparable Boeing offering, against which this ‘subsidised’ Canadian aircraft might create unfair competition.?

    I wonder how long we’ll need to wait before we see Airbus taking-over production of the B777 from Boeing.? (in the way Boeing created the B717 when they took-over the MD83/DC9 from McDonnell-Douglas)

    Should Boeing actually sell the B777 & Airbus start to sell it as the A370 range,
    we will know that Boeing are actually finished & Airbus will become the only ‘world’ aircraft manufacturer.

    Of course, it will mean that they are up there on the top of the hill, to be shot-at by what remains of Bombardier
    & the developing Embaraer, Mitsubishi, Yakolev & Comac.!!!

    1. Tango

      Dan, Boeing is not remotely dead yet.

      They have gotten smacked good for sure, maybe a real beat down even.

      You forget the NMA and I expect that launch to take place tomorrow now!

      It will be interesting, and agree Boeing got what it deserved.

      It will be interesting on how the board view things.

      But you told us you had them boxed in (twice now!)

      1. Dan Dair

        “But you told us you had them boxed in”
        I had who boxed in.?

        All I did was speculate about the future for Boeing, based upon where they appear to be at the moment.?

        My breath is already bated,
        at the prospect of Boeing actually announcing a real & genuine programme to build their much talked about (& little acted upon) MoM aircraft.?

        What I’m actually expecting is more talk about what they’re going to do at some stage in the very near future,
        which is more or less what Boeing have done for the last couple of years.?

        1. Tango

          Dan: You don’t get there is serious tension in the Boeing organization.

          BCA wants to build jets and bring out new ones.

          The lets get our bucks management does not.

          The 787 was the last result. Excellent design, horribly bad execution.

          The NMA is a touch nut due to its type. Nothing done like it before. No hurry.

          As you are not into aviation you really do not get the challenges of the NMA program.

          1. Tango

            For those who would like to learn.

            The NMA is something totally new. The econmis of a single aisle beat the economics of a wid body all to heck, its the nature or large aircraft vs small weight to carry fuel etc.

            That’s why the US has shifted to single aisle for even Trans Continental flights. As they now have the range, they out compete a 767 or A300/310 all to heck.

            What Boeing is trying to do with the NMA is build a mini wide body with the same economics of build as a single aisle AND not have its cost under 100 million (US)

            Its a huge challenge to match the economics of a single aisle in a wide body format.

            One item that goes is cargo, for those ranges and routes its not considered a money maker like the wide body trans ocean aircraft are.

            Many experts say it can’t be done. Boeing thinks it can, but it takes a lot of research, testing and trade offs if it can be.

            And it has to be executed (program) to perfection if its going to.

            Boeing is the poster child of how not to do it. At least BCA understands that part of it.

            Two years of planning is the difference between a disaster and a success ( or can be if spent and done smartly)

            So, serious efficiency in production as well as light structure have to come together .

            The Aurora buy out has a lot to do with the research that company has done.

            Boeing may not use the format, but they also have a well researched form to compare what they do use against.

            Aurora has other bonus programs that fit in, one of their people is no head of Phantom works which says a lot about what Boeing lacks (imagination)

            Its a program that tires takes aircraft to a level no one has ever done and its not a given.

            So yes, they are taking their time and dotting their Is and crossing their Ts.


          2. Dan Dair

            I think that you misunderstand the current status-quo.?
            Sure, Boeing might think that there’s no rush, but the truth is that Airbus is eating their lunch for Boeing, simply because Boeing isn’t competitive with any of their current range, apart from the current B777.
            The B787 is a good & competitive aircraft, but because of all the problems & delays, Boeing won’t see a bean of profit from making it for another 15 years or so.???

            Meanwhile, Airbus has a competitor in every market-sector which is making money right now, except for the A380 (which makes a production-profit, but isn’t repaying any development costs. (the same situation as the B787)).
            Additionally, Airbus’s products are generally marginally better, so they need to discount less & Boeing have no market-sector competitor at all to the A321, so Airbus can charge what they want for that model, as airlines which need it have no leverage against them.?

            I’m not suggesting that the NMA is in any way flawed (yet), but it isn’t in production yet. In fact it’s not in pre-production, nor in development, it’s still just stuff on a page or CAD programme…. maybe.?
            Or maybe it’s just more big-talk from Boeing about what they’re going to do one day, that’ll really show ’em.?

            Meantime Airbus is growing fat on Boeings’ lunch
            & now they’re going to be making something else to which Boeing won’t be offering a competitor to.!

  10. Tom the first and best

    Will there be competition issues with this because there are so few aircraft manufacturers?

    1. Tango

      Always to be considered but Boeing is kicked, not killed.

      This actually may be good for both.

      IT keeps the Chinese from buying the program, Boeing is going to have to get its act together (I think it will happen, not as fast as would be good)

      Airbus has issues with the A330NEO (lost Air Asia orders) and it A380 mailaise.

      Boeing may hit it out of the park with the NMA

      This keeps Airbus fully in the game. Never thought I would say that but its better for Airbus and Boeing to be there than the Russkies or Chinese.

    2. Dan Dair

      I was at Schipol (AMS) yesterday & it occurred to me that whilst Air France run a almost exclusively Airbus fleet, KLM run a very much more mixed fleet, including a lot of B737’s.
      Since KLM & Air France are effectively the same company,
      I presume that the fleet-mixes are there on one hand, as part of the support of the various manufacturers
      & on the other, to ensure they’re not so wedded to any one manufacturer, that they can be held to ransom by them on prices.?

  11. Jacob HSR

    Very good article on the deal by Mr Dan Reed:

    the CS300 have had a long, very rocky $4.8 billion development history.

    the CSeries aircraft were headed for near-certain market failure until they were thrown a lifeline this week by Airbus SE.

    the CSeries aircraft a three-decade-long ordeal.

    it required two controversial government financial rescues of the company, one by the provincial government of Quebec, which injected 1 billion Canadian dollars (about $800 million in U.S. dollars) into the company in June 2016, and another C$372 million bailout by the Canadian federal government this past February.

    1. Tango

      The Forbes article is a bit of both.

      As BBD had a second line being worked on, the tooling for that can be transferred to Alabama.

      Embraer does not have a product that comes close to the C , let alone a C-500

      Embraer did a barley over scope sized aircraft, C Series is able to compete with an A320 and 737800/8 .

      How the management shakes out as well as the lawsuits is certainly correct.

      But Airbus has the muscle and as importantly the contacts in the US (and its laws) to know where to pull strings, twists knots and the force here in place to do so.

      The can Lawyer up equally with Boeing and lobby with the best of them.

  12. Fueldrum

    Mr Sandilands,

    Please tell me you’re not so naive. Please tell me you can see the pound of flesh that Airbus is planning to receive. The human cost of Northern Ireland jobs that are supported by illegal subsidies, and the rift that this may create with the USA, are but opportunities for the unscrupulous.

    It was a loss-making jobs program then, and it’s a loss-making jobs program now.

    1. Dan Dair

      You’re a bumpkin.!
      Sure the UK government offers subsidies to companies which relocate to Northern Ireland.
      It’s a part of the UK which has had a very troubled past & which has needed support to encourage companies to be there to generate work for the locals.
      BUT, Short Brothers were a small independent aircraft manufacturing company from the earliest years of aviation & were on the site in Belfast which Bombardier now occupy, from before the second world war.

      Shorts at Belfast make all kinds of aviation products for a number of manufacturers, in addition to the C-series wings which seem to have got everyone so animated……… whisper it quietly….. (they make parts for Boeing.!!!)

      Additionally, where is the difference between subsidies to bring work to thousands of people in Belfast
      & the massive tax-breaks & the ‘gifting’ of land/property to Boeing, in order for them to be attracted to various locations outside of Seattle.
      Or for that matter, to the Canadian & Quebec governments putting cash into Bombardier, to stabilise the C-series programme.?
      The Canadian government is now a partner in the Airbus deal;
      Why.? Because they expect to be able to get their money back at some stage in the future.
      Why.? Because it was always stated that the governments money was a loan & not a gift.

      I make no particular value-judgements about any one company.!
      The practice of subsidy, tax-break, land-gifting, land-rate holidays, etc., etc., etc., goes on in all businesses, at all levels, everywhere in the world to some extent.?
      What seems to be different here, is that Boeing is crying foul, for exactly the same things it does itself
      against a product, to which Boeing offers no directly-competitive product.?

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