The Corner

Politics & Policy

Boeing vs. Bombardier Part II

A few weeks ago, I wrote about a blatant example of a large company trying to use the power of the government to block or even destroy its competition. The case involves Boeing (yes, them again). Our No. 1 exporter, and possibly our No. 1 beneficiary of government handouts, is trying to punish Canadian competitor Bombardier for selling planes to Delta, claiming the company is dumping the planes at a loss.

Here is a summary:

At the heart of the dispute before the U.S. Commerce Department and the U.S. International Trade Commission is Boeing’s claim that the Canadian company was harming Boeing with its dumping practices — i.e., Boeing claims that Bombardier is distorting trade with the sale of a new series of passenger planes to Delta at a price — $19.6 million — that Boeing alleges is well below the $33 million that the planes should have cost. Boeing also complains that it is unfair since Bombardier is getting help from Canadian taxpayers and, hence, getting an edge over the competition in that market.

Selling goods and services at lower prices than your competitors is kind of how you win at capitalism. By all accounts, customers such as Delta consider the plane in question to be a superior product, and Bombardier is delivering it at a discount. Boeing by comparison seems to think that the best way to retain customers is to get the government to penalize them when they do business with your competitors.

But here is the real kicker:

Boeing is complaining about Bombardier’s sale to Delta in a market in which Boeing does not even compete (it doesn’t produce any aircraft in the 100–125-seat range, which is what Delta was seeking to buy). Also, Boeing’s complaint is over hypothetical harms that it admits won’t materialize for years, if at all.

Seriously! In fact, just a day ago, letters were sent to the Commerce Department from two airlines that aren’t even involved in the dispute affirming Delta and Bombardier’s positions. A letter from Spirit Airlines said: “Should Spirit decide it needs an aircraft in the 100-140 seat class, it would not consider Boeing or Airbus, as neither of those manufacturers make an aircraft in that size.” Get that? Boeing is whining to the government about being hurt by Delta buying a class of aircraft that the company doesn’t produce. And Boeing has the nerve to ask that Bombardier be punished for the crime of having found a niche in which it has a competitive edge.

The Spirit letter also rightfully notes that “it is the American consumer who would be harmed through higher ticket prices associated with airlines being forced to fly aircraft that are too big and/or are less efficient.” In a similar vein, Sun Country Airlines writes in its own letter to Commerce, “We oppose the duties sought by Boeing . . . which would effectively operate as a tax on U.S. passengers and increase ticket prices.”

This is a poignant illustration about the ultimate victims of cronyism. If Boeing gets its way, Bombardier won’t be the only one punished. You, the long-suffering airline passenger, will too. To be continued . . . 

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