Bombardier expected to double down on CSeries sales drive in China

Bombardier expected to double down on CSeries sales drive in China

MONTREAL — Bombardier Inc. is expected to double down on its efforts to snag a CSeries order from China after the U.S. announced hefty duties that threaten to shut it out of the large American market.

“The CSeries business is probably not viable longer term without access to the U.S. market, but Bombardier may be able to find enough international customers to still ramp up production in the next few years,” says analyst Cameron Doerksen of National Bank Financial.

He said uncertainty over the overbudget aircraft remains the biggest investor concern, but anxiety can be alleviated by a new order from a large airline outside the U.S.

Bombardier’s (TSX:BBD.B) shares lost more than seven per cent to close at $2.10 Wednesday on the Toronto Stock Exchange as investors weighed the prospect of a 220 per cent duty on U.S. sales of its flagship CSeries passenger jets and the European merger of two railway rivals.

Analysts say the U.S. Department of Commerce’s preliminary duty decision, which was much harsher than expected, raises questions about the future of a key order for up to 125 CS100 jets by Delta Air Lines.

The department ruled in favour of Boeing, which alleged that Bombardier used unfair government subsidies to sell aircraft at artificially low prices. U.S.-based Delta Air Lines has argued that Boeing doesn’t even make the 100-seat planes it needs.

Bombardier’s last CSeries order for two aircraft came in December but the company has suggested it was confident of signing new deals by year-end.

The Montreal-based company has been targeting buyers in Europe, Asia, Africa and the Middle East. A published report suggested talks with Chinese airlines could lead to a deal that could be announced when Prime Minister Justin Trudeau is on a state visit to the country.

Bombardier didn’t respond to requests for comment about the viability of the CSeries but late Tuesday called the size of the proposed duty “absurd.”

Doerksen doesn’t expect any U.S. airline will order the CSeries until the Boeing challenge is resolved. A final department ruling is expected in December, followed by a decision by the U.S. International Trade Commission on alleged injury to Boeing in February. Still, appeals could keep the CSeries out of the American market for years.

That would put pressure on Bombardier since the U.S. accounts for about 26 per cent of global sales for this size of plane. That still leaves three quarters of the world open to the CSeries, said Addison Schonland of aviation consultant AirInsight.

“I think the CSeries goes on,” he said in an interview. “Is the U.S. important? Absolutely, but is it critical and a must have? Maybe not.”

While the ruling may not be good news for Bombardier, it’s no apocryphal, Schonland said.

Quebec Premier Philippe Couillard said Bombardier, in which the province has invested US$1 billion, will continue to sell the aircraft around the world.

“Boeing may have won a battle but let me tell you, the war is far from over and that we shall win,” he said in Quebec City.

Aerospace rival Embraer said a WTO dispute panel will be established on Friday to review the Brazilian government’s complaint against the CSeries across the world.

Analyst Richard Aboulafia of the Teal Group said Bombardier has no choice but to stay the course and hope things get better.

He said Boeing may have won a hollow victory since it may have unleashed a political battle that could lead to lost military contracts in Canada and Britain and the ire of Delta, which could turn to Airbus or Embraer.

“The only way Boeing could help the CSeries in some markets is by doing this,” he said. “It sends the message that they take the CSeries extremely seriously and that frankly elevates the jetliner’s status.”

Just Posted

Castor triple-murder trial resumes on Monday

Trial was delayed two weeks for two men accused of killing Castor-area family

UPDATED: Look no further than Westerner Park for renovation ideas

Red Deer Home Renovation & Design Show runs Friday to Sunday

Central Alberta real estate market reflects Alberta’s slow recovery

Real estate markets will bounce back but incoming mortgage changes don’t help, say realtor groups

Lorinda Stewart recounts bargaining for her daughter’s life in new memoir

Amanda Lindhout’s mom will speak in Red Deer on Nov. 4

Red Deer photographer captures rare spirit bears

As part of a Canada 150 project he toured some parts of Canada

Business of the Year Awards celebrate local achievement

Olymel, The Bra Lounge, 360 Fitness and Postma Electrical Services Ltd. are the winners this year

New northbound Hwy 2 lanes at Gaetz Avenue to open this Sunday

Drivers heading north through Red Deer on Hwy 2 will have a… Continue reading

Sockey Night at Saturday’s Rebels game

United Way Central Alberta is determined to provide warm feet for all… Continue reading

Canadian planet hunter seeking alien life

‘The shifting line of what is crazy’ says Toronto-born astrophysicist

All three victims identified in Fernie arena ammonia leak

Wayne Hornquist and Lloyd Smith were from Fernie and Jason Podloski from Turner Valley, Alta

4 B.C. prisons install body scanners to combat drug smuggling

The scanners are aimed to combat the smuggling of contraband including weapons and drugs

Owner of medical marijuana dispensaries challenges constitutionality of law

The law under which the owner of two medical marijuana dispensaries was… Continue reading

Victim in fatal ammonia leak remembered for his passion and smile

Friends and colleagues remember Lloyd Smith as someone who was always willing to help people

Watch: Gravel truck turns into wrong off-ramp at Highway 2 Ponoka

The new Highway 2 and Highway 53 intersection at Ponoka caused some confusion for one driver

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month