Delta Vows Not to Pay U.S. Duties on Bombardier’s C Series

Delta Air Lines Inc. agrees not to pay import duties on Bombardier Inc.’s high-speed aircraft, which was held over the last two weeks with 300% tariffs by the United States Department of Commerce.

It is possible Delta delays the delivery of C-series aircraft, which should begin next year, said Wednesday’s chief executive Ed Bastian. The airline is also considering “several other plans” if the preliminary functions are finalized, he said unspecified. Delta agreed last year to buy at least 75 aircraft at a list price of more than $ 5 billion. “We’re not going to pay those prices, and it’s very clear,” Bastian said during a conference call after reporting third-quarter results. “We intend to fly.”

Delta’s decision not to pay import quotas upped the ante in a Bombardier dispute in Montreal against Boeing Co. accusing its Canadian rival to sell Series C at “ridiculously low prices.” which ruled that Bombardier had sold the plane at a price below market value just after they benefited from Canadian government subsidies.

Bombardier jumped 6.8% to $ 2.35 CA closing in Toronto, the biggest gain in five months. Delta advanced less than 1% to $ 53.07.

Diplomatic tensions

The commercial drizzle has embittered diplomatic relations between the United States and two key allies. Canadian Prime Minister Justin Trudeau warned that the conflict threatened the government’s purchase of Boeing’s new military aircraft. Speaking to reporters in Washington after a meeting at the White House, he said that Trudeau said Trump Canada “vehemently” disagrees with prices.

Homework is “something we see very negatively,” Trudeau said. “I certainly mentioned that it prevented us from making military purchases at Boeing.” The US Commerce Department’s decision also sparked criticism from British PM Theresa May, who lobbied on behalf of Trump and Bombardier over 4,000 people at facilities in Northern Ireland.

The US International Trade Commission could overrule customs duties, which include 220% CVE and 80% anti-dumping restrictions, if it finds that Boeing was not injured by the bomber aircraft program. This decision should be taken next year. The Commerce Department must also make a final decision in both cases.

The argument that Boeing has been harmed by the C-series is “unrealistic, a bit absurd,” Bastian said during the conference call. He added that Boeing was competing with the Bombardier aircraft offering Embraer SA Delta E190.

Possible delays

Alain Bellemare, CEO of Bombardier, C-series to contribute to a nearly 50% increase in its annual sales in 2020. The company began to increase production at its Mirabel plant, north of Montreal. sent this year

Delta, which has options to buy 50 more aircraft from the C-series is the largest buyer of the aircraft. Including Delta, Bombardier has accumulated 360 C-series firm orders and more than 400 other commitments. Any appeal from the United States runs Bombardier likely to delay the commencement of Delta deliveries, said Nick Heymann, an analyst at William Blair & Co

“Delta wants this plane, they wanted it yesterday,” Heymann said in an interview. “The next part of the process is finding out how Boeing got injured – and if this case is going to appeal, then you will have a time limit.”

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