An EgyptAir Bombardier deal is on the horizon. EgyptAir has stated its intention of coming to a deal with Bombardier. The Belfast plane manufacturer had been accused in September by American firm Boeing of anticompetitive practices. Bombardier is a Canadian company and Donald Trump has been unhappy with the way Bombardier has been acting.
Boeing claims that Bombardier has been receiving subsidies from Canada and the UK. It claims these subsidies enabled it to offer the Bombardier C-Series planes to Delta Airlines for below cost price. The US Department of Commerce and the US International Trade Commission both found The Canadian company of being guilty of this charge.
Has Boeing Made a Big Mistake?
An initial 220% import tariff imposed in September was increased by a further 80% to 300% in October. Most commentators now believe that Boeing has made a big mistake, particularly after the Airbus Boeing agreement. Neither Canada nor Northern Ireland will forget this issue, and there may be a price to pay for Boeing. Not to mention Delta.
Meantime, Egyptian company EgyptAir has stated it intends to purchase up to 24 C-Series Bombardier planes. A letter of intent has been signed for 12 of the C-Series planes with a further 12 in the pipeline. The deal would theoretically be worth £1.7 billion ($2.2 billion) for all 24 planes. However, EgyptAir will likely get a discount on the price.
Another 32 C-Series Bombardier Aircraft to be Ordered?
Additionally, it was reported in November that another European country, as yet unnamed, would order 31 of the C-Series. The letter of intent has been signed, with a further 30 perhaps on the cards. Where would that leave Delta, the US company that placed the original order prior to the 300% import tax?
Although Bombardier is a Canadian company, the C-Series wings are made in their Belfast plant. This plant employs around 1,000 people. It is really important for Belfast’s economy. The final verdict on the Boeing-Bombardier situation will be delivered in February next year. Nevertheless, the pressure is off Belfast after the announcement of the new EgyptAir Bombardier deal.
EgyptAir – Bombardier Deal May Hurt Boeing
Should the decision go against the Canadian company, it can then take the case to the World Trade Organization. Before doing that it would likely appeal to the disputes panel of Nafta (North American Free Trade Association). So the matter is nowhere near being closed.
For now, though, the EgyptAir Bombardier deal will see Bombardier in Belfast through for some time yet. It may well be rebound on Boeing and perhaps even hurt it. Many believe that the US made a mistake taking on the Canadian company and its Belfast plant. Whatever happens, the EgyptAir and Bombardier deal has taken a great deal of pressure off the Belfast employment threat.
