Delta Refuses to Pay Tariff on Bombardier’s CSeries

Published By : 12 Oct 2017 | Published By : QYRESEARCH

Delta Air Lines Inc. has now joined the battle between U.S. aviation giant Boeing and Canadian rival Bombardier by refusing to pay the 300% tariff imposed by the U.S. government on Bombardier’s imports into the U.S. Boeing had earlier made a complaint regarding the high amounts of subsidies Bombardier received from the Canadian government, which allowed Bombardier to sell their aircraft at a much lower price than Boeing’s products. The difference in pricing was termed by Boeing to be an unfair advantage to Bombardier, with the pro-U.S. Trump administration backing the local manufacturer’s claim by imposing an additional tariff on Bombardier airplanes. The 300% tariff includes 220% preliminary countervailing duty added to 80% preliminary anti-dumping duty, which has the prices of Bombardier’s CSeries unviable for Delta Air Lines Inc., by far Bombardier’s largest civilian consumer.

Delta Air Lines Inc. has hence taken an unusually firm stance on the position, considering the governmental backing Boeing’s complaint has received, with CEO Edward Bastian telling analysts the airliner intends to go ahead with its planned purchase of 75 CSeries airplanes and “is not going to be forced to pay tariffs”. Delta Air Lines Inc. intends to acquire the CSeries planes at the contractual price, though the airliner conceded there may be a delay in procuring the order due to the economic wrangles created by the imposition of the tariff.

The concern has been escalated significantly in recent weeks, with the governments of Canada and Quebec in particular coming down hard on Boeing for their complaint. British PM Theresa May has also joined the list of dissenters against Boeing due to the strong presence of Bombardier in Northern Ireland as an employer.

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