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Embraer ponders WTO challenge against Bombardier

The heated battle between rival jet makers Embraer and Bombardier continued this week with the Brazilian OEM considering asking the country’s government to file a complaint to the World Trade Organization (WTO) over state support for the Canadian aircraft manufacturer’s troubled CSeries programme. The Brazilian OEM, which makes the competing E-Jet, is exploring whether favourable financing from the Quebec government for the CSeries has enabled Bombardier to make its CS100 aircraft available to buy below production price. The potential action follows high profile orders for the aircraft this year, including Air Canada opting for 45 of the aircraft and significantly, Delta Air Lines’ $5.6bn commitment for 75 CS100 and 30 options. Paulo Cesar de Souza e Silva, head of Embraer’s commercial aviation division, told Reuters on Monday (May 16) that the deal “causes too big of a distortion in the market”, and that the aircraft manufacturer is currently analysing the situation and talking to the Brazilian governm

The heated battle between rival jet makers Embraer and Bombardier continued this week with the Brazilian OEM considering asking the country’s government to file a complaint to the World Trade Organization (WTO) over state support for the Canadian aircraft manufacturer’s troubled CSeries programme.

The Brazilian OEM, which makes the competing E-Jet, is exploring whether favourable financing from the Quebec government for the CSeries has enabled Bombardier to make its CS100 aircraft available to buy below production price. The potential action follows high profile orders for the aircraft this year, including Air Canada opting for 45 of the aircraft and significantly, Delta Air Lines’ $5.6bn commitment for 75 CS100 and 30 options.

Paulo Cesar de Souza e Silva, head of Embraer’s commercial aviation division, told Reuters on Monday (May 16) that the deal “causes too big of a distortion in the market”, and that the aircraft manufacturer is currently analysing the situation and talking to the Brazilian government.

Following the claims, any wrongdoing was swiftly denied by Bombardier, with spokeswoman Marianella de la Barrera telling the media that Delta opted for the CSeries based on the aircraft’s performance and all of its transactions were in compliance with WTO regulations.

She also stated that while the Quebec government has committed to the $1bn package, the deal is yet to be finalised meaning the firm has yet to receive any finance at this stage.

While the two OEMs have a history of involving the WTO over the past two decades on the issue of state support while constantly tussling as all good rivals seemingly do, this is the first public row since the Quebec government’s controversial decision to give financial aid to Bombardier in February.

Should a similar commitment be granted from Canada’s federal government, which Bombardier has asked to match Quebec’s pledge, then the flames could be further stoked.

As Silva stated, his company now feels it is competing against governments as well as financial enterprises when selling its E-Jet against the CSeries.

“This shows Bombardier aggressiveness and raises suspicions that Bombardier offered its CS100 for a price below cost,” Silva said. “It’s too hard to compete with the government of Canada.”

Considering what’s at stake with both parties desperate to grow their share in the growing mid-range aircraft market, the latest tussle between these best of enemies could roll on for a while yet.

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