C Series Info
10-01-2017, 05:59 PM
#872
:-)
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10-01-2017, 06:05 PM
#873
Gets Weekends Off
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10-01-2017, 06:27 PM
#874
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Sorry Puddy, I love the C Series as much as you do, but I think the tariff will stick and Delta will have to either renegotiate pricing or cancel the order. I've been reading the ITC report from June.
"In its notices of initiation, Commerce defined the imported merchandise within the scope of these investigations as follows:
{A}ircraft, regardless of seating configuration, that have a standard 100- to 150- seat two-class seating capacity and a minimum 2,900 nautical mile range, as these terms are defined below. ‘‘Standard 100- to 150-seat two-class seating capacity’’ refers to the capacity to accommodate 100 to 150 passengers, when eight passenger seats are configured for a 36-inch pitch, and the remaining passenger seats are configured for a 32-inch pitch. ‘‘Pitch’’ is the distance between a point on one seat and the same point on the seat in front of it. “Standard 100- to 150-seat two-class seating capacity” does not delineate the number of seats actually in a subject aircraft or the actual seating configuration of a subject aircraft. Thus, the number of seats actually in a subject aircraft may be below 100 or exceed 150. A “minimum 2,900 nautical mile range” means: (i) able to transport between 100 and 150 passengers and their luggage on routes equal to or longer than 2,900 nautical miles; or (ii) covered by a U.S. Federal Aviation Administration (FAA) type certificate or supplemental type certificate that also covers other aircraft with a minimum 2,900 nautical mile range. The scope includes all aircraft covered by the description above, regardless of whether they enter the United States fully or partially assembled, and regardless of whether, at the time of entry into the United States, they are approved for use by the FAA. The merchandise covered by this investigation is currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS)"
Boeing's claim might have a little more merit than we think. I don't know the pitch on the seats in the C Series but it does have the range that the 737 has. "I Have a bad feeling about this."
"In its notices of initiation, Commerce defined the imported merchandise within the scope of these investigations as follows:
{A}ircraft, regardless of seating configuration, that have a standard 100- to 150- seat two-class seating capacity and a minimum 2,900 nautical mile range, as these terms are defined below. ‘‘Standard 100- to 150-seat two-class seating capacity’’ refers to the capacity to accommodate 100 to 150 passengers, when eight passenger seats are configured for a 36-inch pitch, and the remaining passenger seats are configured for a 32-inch pitch. ‘‘Pitch’’ is the distance between a point on one seat and the same point on the seat in front of it. “Standard 100- to 150-seat two-class seating capacity” does not delineate the number of seats actually in a subject aircraft or the actual seating configuration of a subject aircraft. Thus, the number of seats actually in a subject aircraft may be below 100 or exceed 150. A “minimum 2,900 nautical mile range” means: (i) able to transport between 100 and 150 passengers and their luggage on routes equal to or longer than 2,900 nautical miles; or (ii) covered by a U.S. Federal Aviation Administration (FAA) type certificate or supplemental type certificate that also covers other aircraft with a minimum 2,900 nautical mile range. The scope includes all aircraft covered by the description above, regardless of whether they enter the United States fully or partially assembled, and regardless of whether, at the time of entry into the United States, they are approved for use by the FAA. The merchandise covered by this investigation is currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS)"
Boeing's claim might have a little more merit than we think. I don't know the pitch on the seats in the C Series but it does have the range that the 737 has. "I Have a bad feeling about this."
When you consider that Quebec/Canada and the UK also have a lot of political capital invested in this process as well, the tariff amount could be renegotiated or even cancelled. Regardless, it's too early to tell what the final call will be. No doubt Ed has a bunch of high-priced lawyers and lobbyists scrutinizing the situation.
10-01-2017, 06:43 PM
#875
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10-02-2017, 05:43 AM
#876
Doing Nothing
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Posts: 1,316
10-02-2017, 08:46 AM
#878
Doing Nothing
Joined APC: Aug 2010
Posts: 1,316
Boeing claims Delta aka Our old CEO sought them out for used 717s and other used 100 seat aircraft such as the E-190s. That's was RA's mo, finding used aircraft. The only reason we went with the brand new C Series was the used aircraft pricing we got.
10-02-2017, 10:25 AM
#879
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Boeing offered the used E190s because it had NOTHING ELSE to offer in the desired seat range. That's the point and everyone conveniently forgets that Boeing attempted to sell the used Air Canada E190s at a very low price per unit (maybe even lower than the CS100 price) to get them off their books - and now it is claiming financial harm despite not having a competing product. Don't forget the E190s in this situation - they are a key piece of the puzzle and prove that Boeing had nothing relevant to offer. If you can't address a specific market need, how can you claim financial harm? It's difficult.
10-02-2017, 01:14 PM
#880
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First, you don't know that it was the only reason. I remember reading articles in which RA stated he was specifically interested in the geared turbofan engine on the CSeries and the resulting efficiency. Plus, the published CASM on the CSeries is much better than any competing aircraft in the CS100 100-120 seat category. Sure, price is always an issue and as a launch customer in the US, you bet Delta probably negotiated effectively. What airline would pay full price to be the US launch customer? Nobody would be surprised by launch customer pricing involving 75 units of an airplane that hadn't even been completed at that point.
Boeing offered the used E190s because it had NOTHING ELSE to offer in the desired seat range. That's the point and everyone conveniently forgets that Boeing attempted to sell the used Air Canada E190s at a very low price per unit (maybe even lower than the CS100 price) to get them off their books - and now it is claiming financial harm despite not having a competing product. Don't forget the E190s in this situation - they are a key piece of the puzzle and prove that Boeing had nothing relevant to offer. If you can't address a specific market need, how can you claim financial harm? It's difficult.
Boeing offered the used E190s because it had NOTHING ELSE to offer in the desired seat range. That's the point and everyone conveniently forgets that Boeing attempted to sell the used Air Canada E190s at a very low price per unit (maybe even lower than the CS100 price) to get them off their books - and now it is claiming financial harm despite not having a competing product. Don't forget the E190s in this situation - they are a key piece of the puzzle and prove that Boeing had nothing relevant to offer. If you can't address a specific market need, how can you claim financial harm? It's difficult.
Second, but for the $3 billion government subsidies, Bombardier would not have been able to offer the subject merchandise at the dumped prices it has. In fact, Quebec, Bombardier, and Delta all acknowledge that but for the subsidies, there would have been no sale to Delta. That evidence, too, is in the record.
They also claim the same play was made against UAL which forced them to sell the 737-7Max (Dear God fix the freaking airplane names Boeing) at an exceptionally low price which they later got UAL to convert to the 738Max. Also fwiw, DAL was not after the 3000 mile range of the C Series, they wanted 1000.
From Delta's Greg May
In fact, our agreement is structured with maximum takeoff weight provisions that reflect our intended deployment plan to fly the aircraft, on average, on routes that are less than 1000 miles. If we exceed those averages, i.e., the plane needs to carry more fuel because it's flying longer distances, we're going to be required to pay Bombardier additional payments.
The problem for Bombardier and Delta is they didn't win on the "we're only looking at 100-110 seat jet" and Boeing doesn't compete. The market was expanded to really just any narrowbody. They seem to care more about the dumping not whether it harmed Boeing product today. Plus all of Bombardiers marketing pointed towards the CS300 TOO! And that is undoubtedly a 7 Max competitor. I think this might have worked out in Bombardier's favor had there not been a CS300. Basically, CSeries is a cool jet, people were reluctant to buy the hype, they didn't buy the plane, bad sales, plane meets the hype but the company almost went under if not for the Government and then it was dumped on the market. Just really bad timing and bad assumptions on market needs and reception.
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