Additional tarriffs on the CS100...ugh...
#16
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I thought it was fairly normal in business to sell the first off the line at a lower price in order to get market traction. Since our leader is supposedly a businessman, you would think he would understand that.
#17
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#18
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http://www.bbc.com/news/uk-northern-ireland-41397181
Bombardier is major employer in UK.
#19
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It's not just limited to the MAX 7. Ask yourself a question. If the CSeries wasn't available to buy (would have been the case without the government aid), or was too expensive for DL's liking (if sold at a profit), would DL not order any airplanes at all? In other words, if this tariff stays, do you think DL will not order a substitute?
#20
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*I'm uneducated on the subject so go easy*
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
Last edited by FSUnole03; Oct 7, 2017 at 11:15 am
#21
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#22
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It's not just limited to the MAX 7. Ask yourself a question. If the CSeries wasn't available to buy (would have been the case without the government aid), or was too expensive for DL's liking (if sold at a profit), would DL not order any airplanes at all? In other words, if this tariff stays, do you think DL will not order a substitute?
#23
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*I'm uneducated on the subject so go easy*
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
(1) You could argue that Spirit is using the $9 fare as a loss leader on the seat, with the expectation that you'll end up actually paying $50-75 once all sorts of fees are attached (thus the $9 is intended as an advertising gimmick, not an actual sale price). This is sort-of like the storage facility that offers you a $1 first month's rent...and then charges you a set of fees for the first month that more than equal subsequent months' rents. In the case of Spirit you can usually dodge most of those fees, but Spirit is likely banking on you not managing to do that. An equivalent for Bombardier would be selling the first ten planes to an airline at half-price (to hook a base order), but with the expectation that the order would be sufficiently profitable if it exceeds 50 planes (40 at full price).
(2) You could argue that what Spirit is doing is a dumping practice and is therefore not OK and shouldn't be allowed. Here, the analogy is the ME3 (where it has been increasingly obvious that they're losing money on lots of routes in an attempt to force other carriers off), but this would imply that Spirit wasn't making up for it on the back end somehow (e.g. baggage fees, buy-on-board programmes, etc.). A dumping argument would apply if Spirit was selling the whole plane for $9 and doing so on a continual basis in an attempt to force other airlines off a route (or if Megabus was selling the whole bus for $1). I'm sure this is a line of argument that a lot of airlines would like to cudgel one another with, but it's also something of a WMD. There's also the complicated question of what the minimum price "should" be.
(3) There's also the free-market position of "Who cares what Spirit is doing as long as they're acting on their own?" Here the question becomes one of "improper" government aid (which is a sticky matter in general) as the difference (e.g. is Bombardier simply a better business or are they being enabled by some government entity in undercutting their competitors' prices?). Here the analogy would be if Spirit got a "sweetheart" deal from a given airport/city to come in that enabled it to then dump those $9 fares on the market (and that deal was on a continuing basis).
I think that sums up three sides of the argument on something like Spirit.
Edit: I wonder if Airbus has a product in this market? I don't think so (Airbus also skews larger IIRC) but I can't help wonder. Also, were I in DL's shoes I'd be getting mighty tempted to start going after Boeing for this in some sort of long-term manner (for example, working with other carriers to start a domestic competitor to Boeing).
Last edited by GrayAnderson; Oct 7, 2017 at 2:08 pm
#24
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*I'm uneducated on the subject so go easy*
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
My question is - why is it wrong for for Bombardier to sell these planes at below cost, but airlines like Spirit can sell seats for $9, which is well below costs and it be okay? Why doesn't DL or other airlines go after them like Boeing is going after Bombardier. I know Boeing says it's because Bombardier is getting unfair subsidies, but so does Boeing. So why isn't okay that Bombardier does?
https://www.wto.org/english/thewto_e..._e/agrm8_e.htm
#25
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Given that the Embraer E195 will haul 100+ passengers, is this really such a problem? I'd much rather fly in one of the newer Embraers than in a stretched-out Canadian beer can.
Double those tariffs again!
Double those tariffs again!
#26
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From what I've read and seen online, the C-100 is supposed to be really nice and comfortable. It's not stretched CRJ. Other than the CRJ, I think everything else built by Bombardier, like rail cars, has been fairly comfortable from a passenger perspective.
#27
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I've flown the CS-100 on Swiss, and really liked it. I say this as someone who thinks the E-170/5 is the best narrowbody around from a passenger point of view.
#28
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Boeing is protesting a standard industry practice to basically stop the sale of a type of jet they don't make, for an order they wouldn't get. And it's likely to potentially cost them UK/CA government business.
Is Boeing doing this to really prevent the maybe someday still entirely hypothetical C-500 which even if they started today is minimum 5 years away and might compete with the smaller 737's?
This leads me to believe one of three things is happening:
1) they wanted to file the protest on the C100's to ensure they're on record when/if a C500 ever does happen and they fully expected this case to get thrown out, but they underestimated the protectionism of the current administration.
2) Boeing is being leaned on by someone in the administration to file this as a bargaining chip for further NAFTA negotiations.
3) Some in the administration are super jealous of Justin Trudeau's hair, and are hoping that blocking the deal with muss it all up.
Is Boeing doing this to really prevent the maybe someday still entirely hypothetical C-500 which even if they started today is minimum 5 years away and might compete with the smaller 737's?
This leads me to believe one of three things is happening:
1) they wanted to file the protest on the C100's to ensure they're on record when/if a C500 ever does happen and they fully expected this case to get thrown out, but they underestimated the protectionism of the current administration.
2) Boeing is being leaned on by someone in the administration to file this as a bargaining chip for further NAFTA negotiations.
3) Some in the administration are super jealous of Justin Trudeau's hair, and are hoping that blocking the deal with muss it all up.
#29
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It is a habit of Boeing to contest EVERYTHING they lose. In other sectors they constantly claim they are the best/largest/blah blah and someone else getting the business was an unfair trade practice. Look at all the military contracts they have initially lost then won on appeal in court. I was not surprised in the least bit when they cried foul in this one.
#30
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Protectionism happens everywhere, but as mentioned up-thread, Boeing better be a bit careful what they wish for.