Recently, you have probably heard a lot of a feud between Bombardier and Boeing. Let’s take a look at what it is all about.

But before we take a look at that, we have to get some context on the industry.

Boeing and Airbus, the two major companies in the aerospace industry, can’t quite crack the small planes industry. Airbus attempted with their a318, but they only sold 80 of those. On the other hand, Boeing created their 717, but that too was a failure with only 156 built.

But that doesn’t mean there’s no demand for small planes. In fact, the small planes industry is extremely crucial as many airports in the United States and Europe can only be serviced with small planes. That’s where Bombardier comes in. Bombardier, along with Embraer, are major players in the small planes industry.

The CSeries

The Bombardier CS300 Plane In Action

Bombardier has found a lot of success with their Canadair Regional Jet series, or CRJ for short. They have produced 1021 CRJ200 and 815 CRJ700 series planes. Even still, Bombardier wishes to expand, and that’s why they created the CSeries.

The CSeries would fit the need for mid-sized planes, right between the size of the CRJ series and the Boeing or Airbus planes. The design of these planes took advantage of all the newer technology so it reduces environmental problems and fuel costs. In fact, it reduces cost per passenger by 18%. Even passengers praised it for its high quality interior features.

But the CSeries started to run into problems. On May 29th 2014, one of the aircraft suffered an uncontained engine failure. Because of this, Bombardier could not show their plane at the Farnborough Airshow, the biggest show in the aerospace and air defense industry. This was a huge blow to the company, as they were planning to secure orders there, and the program was almost out of money.

Luckily for Bombardier, the Quebec government invested $1 Billion CAD into the program. And the Canadian government gave Bombardier a $372.5 Million interest-free loan, with a third of that going straight to the CSeries program. This effectively saved the program, and possibly the company.

Boeing

Bombardier has racked up orders from many European airlines, but they lacked a certain type of order. The American ones. America’s aerospace industry is huge, and Bombardier knew if they wanted the program to be successful, they needed to secure an order from a big American company. As a result, Bombardier sold up to 125 CSeries jets to Delta at a very cheap price.

Boeing alleges these prices were not legal and asked the US Department of Commerce to put a 80% tariff on the program. They responded by putting a 300% tariff on the program, even though Boeing would not be affected by the CSeries planes at all. They had no places in that very same industry. Nevertheless, this seemed like the end for Bombardier. A 300% tariff into the United States would make the CSeries jet impossible to sell, but once again, Bombardier was saved.

Airbus

Airbus and Bombardier sign a takeover deal.

On October 16th 2017, Bombardier announced Airbus was taking over the program, with a 50.01% stake in the program. Airbus paid nothing for this stake, but all stakeholders won. Bombardier would have the assistance of Airbus, a marketing and sales powerhouse. Analysts said there would be 5 500 planes of the CSeries size that will be needed soon, and Bombardier is now expected to fulfill 60% of that market. They would also be able to avoid the 300% tariff, as the planes were officially American. On the other hand, Airbus would get a new fleet in another industry for free.

The After-Effects

Boeing is not happy with all of this. They attempted to curb Bombardier’s fleet where they had no business in, and instead in return, they suffered a lot. Their biggest competitor, Airbus, gained a new fleet of planes for free.

Also, there’s a bit of irony here. Boeing complained of Bombardier’s government support, which consisted of investments and loans, while Boeing itself has gotten a whopping $64 Billion USD in loans and $457 Million in federal grants.

I don’t like using this term, but this is a case of flat-out karma.