Belfast Telegraph

Why Boeing has what it takes to win in dogfight with Bombardier

The fight continues to secure jobs at Bombardier's Belfast site ... but its influential US counterpart is used to getting its own way

By Richard Doherty

The controversy created by Boeing over Delta Airlines' firm order for 75 Bombardier CS100 jets, and options on another 50, threatens jobs in Belfast.

Boeing has accused the Canadian manufacturer of "dumping" 125 airliners, selling them at vastly reduced prices - according to Boeing, under $20m per aircraft against a unit production cost of over $33m.

The journal Aviation Week suggests that Boeing's claim isn't supported by other manufacturers, while the website Flight Global describes it as a "backhanded compliment" to Bombardier.

Delta have stated that Boeing didn't offer new 737-700s, or 737-MAX-7s, but an assortment of secondhand Embraer E-190s and Boeing 717s (formerly Douglas DC-9s). Moreover, Boeing didn't offer delivery within the timescale Delta needed.

It has also been noted that Boeing offered United Airlines reduced prices (a 73% reduction) on 737-700s that threatened the company's future viability. The reason for such reduced prices? To undercut Bombardier for United's order.

Bombardier had good reason to offer low prices to Delta. Securing a large order from a major carrier would help break the Boeing/Airbus stranglehold on the narrow-body airliner market.

Moreover, early aircraft in a production run are always more expensive, so Bombardier could argue that they were charging the price that would later prevail.

Boeing complained to the US Department of Commerce. A decision is expected on October 4, although the department may announce penalties to be imposed on Bombardier before then.

That's in spite of some US airlines supporting the C-Series; Boeing doesn't offer aircraft in the 100-140-seat category. So, will the decision favour Boeing or Bombardier?

Representations have been made to the US authorities, including Theresa May's phonecall to President Trump, but, if judged by past experience, Boeing will prevail.

The company has form.

In the late 1990s, the US Air Force had to replace many of its oldest KC-135 Stratotanker aircraft, a variant of the Boeing 707 airliner. Over 700 Stratotankers were produced for the USAF, which also bought the C-135 Stratolifter. Such orders helped put Boeing in the lead position for producing civil airliners.

Many KC-135s are still flying, but are expensive to fly and maintain. Thus, a competition for a replacement for the oldest machines was announced.

Boeing submitted the KC-X, a variant of its 767 wide-body airliner. It had already gained a contract to lease 767s, as KC-767s, to the USAF and won the competition.

The only other submission - a variant of the Airbus A330 - was offered by Airbus's parent company, EADS, and the US aerospace giant Northrop Grumman. This was the Airbus A330 MRTT (Multi-role Tanker Transport), designated the KC-30.

When the Boeing order was cancelled, following allegations of irregularities in the process for awarding the contract, a new procurement programme was announced and formalised in January 2007.

Once again, the competition was between Boeing's KC-767 and the KC-30. This time, EADS/Northrop Grumman announced plans to build the KC-30 in a new factory in Mobile, Alabama, where A330 freighters would also be built.

On February 29, 2008, the USAF proclaimed the winner: the KC-30. This aircraft could carry 20 per cent more fuel than the KC-767, as well as more cargo. The KC-767 scored only on being cheaper. Designated KC-45, almost 180 EADS/Northrop Grumman aircraft were ordered.

But Boeing lodged a protest about the order to the Government Accountability Office (GAO). The protest was upheld and the USAF had to issue a third competition, with new criteria.

Those criteria seemed to favour Boeing, according to Northrop Grumman, who withdrew. EADS remained in the process, still promising to build the tankers in Mobile.

It was not to be. Boeing was awarded the contract and the new tanker became the KC-46. The weight and influence of one of the USA's largest companies had been brought to bear in the fight, and had won.

Boeing isn't just part of what President Eisenhower called "the military-industrial complex". It is the largest and, arguably, most influential part of it.

No longer only the Boeing company of old, it includes Convair, McDonnell Douglas, North American and Rockwell, as well as Vertol helicopters, and is involved in space technology, in addition to building aircraft and missiles.

However, Bombardier now faces not only Boeing, but the US administration, from the president down. In spite of being neighbours, the US also has form in the shape of damaging Canadian industry, especially the Canadian aviation industry.

During the 1950s, the Avro Canada Company built a long-range fighter, the CF-100 Canuck. Before the Canuck entered service, the Royal Canadian Air Force (RCAF) decided that its replacement should be a supersonic, missile-armed fighter. Avro Canada designed a new fighter to meet the RCAF's requirement.

That fighter was the Avro CF-105 Arrow. Aviation authority Bill Gunston OBE wrote of the CF-105: "In its planning, design and flight-test programme, this fighter, in almost every way the most advanced of all the fighters of the 1950s, was as impressive and successful as any aircraft in history."

It was never to enter service. Although Avro Canada tried to sell the CF-105 to the USAF and the RAF, the US government was opposed to purchasing 'foreign' aircraft and favoured US industry. However, the USAF was impressed, since the CF-105 was well ahead of anything then in service.

Britain ordered CF-105s, but the 1957 Defence White Paper meant cancellation of the order. While building, first flight and testing were going on in Canada, the US government was bringing Canada into its North American Air Defence scheme (NORAD), to which John Diefenbaker's new government signed up in 1957. It was the death knell for the CF-105.

Although work continued on the aeroplane, it was clear that Canada couldn't afford both it and NORAD. On 'Black Friday' - February 20, 1959 - Diefenbaker announced the cancellation of the CF-105 programme.

The Avro Arrow would be replaced by McDonnell F-101 Voodoo fighters and Boeing Bomarc B surface-to-air missiles.

Production jigs, completed aircraft, plans and drawings were all destroyed on the orders of the government.

Avro Canada had to pay off almost 15,000 employees, with a similar number laid off in the supply chain and ancillary industries.

Before long, Avro Canada had been wound up.

Many in Canada still believe that Diefenbaker bowed to pressure from the US government. That may not be true, but it was very much a case of the big neighbour prevailing.

American interests came first. Canada's burgeoning aviation industry was all but destroyed. Bombardier is virtually all that remains of it.

With Donald Trump's 'America First' ideology, what are the chances of a decision in favour of a Canadian company this time?

  • Richard Doherty is a military historian. His latest book, El Alamein 1942: Turning Point In The Desert, will be published by Pen & Sword Military in November

Belfast Telegraph

Daily News Headlines Newsletter

Today's news headlines, directly to your inbox.


From Belfast Telegraph