There have been some skeptical articles in the press about the $19.6 million CS100 unit price alleged by Boeing.

E.g., FlightGlobal published an editorial noting that at that price, Bombardier's "onerous contract provision" would have been $930 million instead of $500m. However, this argument isn't entirely convincing because under GAAP / IFRS Bombardier's accountants have a lot of leeway in what's considered an expense vs. capital, and how to recognize losses over time.

In the filed complaint, here's how Boeing justifies the $19.6m figure:

1. Boeing examined Delta's quarterly SEC filings (form 10-Q) and noted a $420m increase in "Aircraft Purchase and Lease Commitments" for deliveries in 2020. Specifically, Delta's 2nd Qtr 10-Q (before CSeries deal) reported $1,900m while the 3rd Qtr 10-Q (after CSeries deal) reported $2,320m, for a difference of $420m.
   
2. According to the Ascend Fleets transaction database -- ironically a FlightGlobal product -- the only deliveries scheduled for Delta in 2020 are 18 CS100s ordered in April 2016.
   
3. So the total "all in" price per plane is $420m / 18 = $23.3m. However, this price includes additional items such as EIS support, pilot & cabin crew training, residual value guarantees, performance guarantees, spare parts, etc.
   
4. Boeing submitted a worksheet (redacted) based on Boeing's internal numbers estimating the value of these additional items to be $3.7m per aircraft.
   
5. The "ex-factory" price is then $23.3m - $3.7m = $19.6m per aircraft.

Boeing also cited press & trade articles stating that Delta received very steep discounts from Bombardier, in the 65% to 75% range. (I found examples here and here.)

The CS100 had a list price of $71.8m so according to press reports at the time Delta purchased the CS100 for a price between $17.95m and $25m depending on the discount level. This range is in line with Boeing's analysis above.

As a comparison, reports from Forbes, Leeham News, etc., value Boeing's own 737-700 sale to United at around $22m per aircraft. Bombardier lost on this deal (offering the CS300), so a sub-$20m price to Delta for the CS100 in a "must win" situation isn't far fetched.

Finally, I believe in this industry aircraft pricing is an "open secret" to the major players. Everyone knows roughly how much everyone else paid, as they all basically use the same advisors / consultants / lawyers / accountants.

So I think Boeing's sales people got wind that Delta got sub-$20m pricing then perused publicly available financial data to "work backwards" for numbers that matched that info.

Meanwhile Bombardier can publicly claim that the actual price is "millions more" with a straight face, because obviously the "all in" price is above the "ex-factory" price, as noted above.

However, all these numbers are far lower than the $30 million per unit Air Canada reportedly paid for the CS300, hence the dumping claim.

ACs CS300 at $30m?

Where did you get this?

I was told (from a friend at Dorval AC HQ) that AC got the "better" plane (CSeries) for less than what the others offered.

AC was stunned to obtain the "Cadillac" for so cheap...

$30m was cheap. When Pierre Beaudoin still ran the show, he would never have sold the CS300 for that price. Then the Delta deal completely reset expectations on how big of a loss Bombardier was willing to take.

Also remember that Air Canada received some "non-monetary" subsidies as part of the deal, like a court case being withdrawn by Quebec and favorable amendments to Federal legislation. Those changes / subsidies were worth millions to Air Canada and hid the "true cost" of the CS300 deal.

Some references:

Globe & Mail:
The Economist:

Delta has refuted Boeing's accusations:
https://leehamnews.com/2017/05/23/de...dumping-claim/

It's interesting that Delta's testimony didn't contradict Boeing on the most important allegation: price. Delta's assertion that Boeing didn't offer an aircraft against the CS100 is a red herring.

Boeing's proposed scope in the anti-dumping complaint is the class of aircraft with "standard 100- to 150-seat two-class seating capacity and a minimum 2,900 nautical mile range". This effectively lumps the CS100 and CS300 together in the "domestic like product" analysis. The CS300 competes with the 737-700 and 737 MAX 7.

In the original complaint, Boeing went to great lengths to argue that the "100- to 150-seat" category is the appropriate grouping, citing prior findings and decisions from the European Commission, the Government of Canada, and even Bombardier's own marketing materials.

The bottom line is that Boeing anticipated this line of defense and Boeing's attorneys pre-emptively crafted the complaint to tie the CS100 and CS300 together.

Boeing is a complete hypocrite when it comes to pricing and everyone knows it. Will nobody give Delta's management credit for strong negotiation? They have that reputation. Regardless, Boeing can afford deep discounts and they provided United a very big discount. See this recent


example:https://www.forbes.com/sites/scottha.../#66e0915930da

Dumping in this context is about giving deep discounts in a foreign market (cross-border) as compared to normal home market prices.

Boeing is American and so is United. There's no cross-border dumping.

Let me see:

Boeing responds to the Airbus NEO with a warmed over, 50 year old airframe with several major disadvantages: significantly narrower seat, only one engine choice (because of short main landing gear geometry), etc., etc.

Five years after launch, Airbus is eating their lunch at the top of the size spectrum with Max 9 market share only 40%. At the same time, AB and Boeing have together only sold 120 aircraft in the entry level A319NEO/Max 7 segment! And Boeing blames the C Series.!!

Boeing's failure to develop a new, clean sheet product for this segment is to blame.

Things which make logical folks go Hmmm. (Red Tories aka Liberal lapdogs will differ)(Apparently the Tory brand has more incarnations than M&M's have flavors).
https://www.flightglobal.com/news/ar...er-cse-437768/
Liberals & defense procurement, a dichotomy of epic proportions. Remember they just paid Lockheed to maintain the F-35 spot???

If it stops us from wasting 4.5 billion dollars on 18 useless planes, I am in favour of giving the Liberals an excuse to back out of a badly thought out, badly executed, single source, no bid contract.

Perhaps they will actually hold their promised competition... okay, I laughed for a long time after I wrote that.

Boeing's complaint against Bombardier and C Series is a last gasp tactic and nothing more. The next large order for C series from any established American carrier will be "the end of the B737-700/7 MAX". (Boeing's words, not mine)
I doubt the A318 could be far behind.
If Delta Air Lines chose to run trans Atlantic ops with C series (eastern seaboard to London, Paris, or Amsterdam) it's likely United and American would take a second look at this aircraft.
There hasn't been much from the rumour mill regarding potential C series sales as we approach the Paris air show but we do know Air Baltic will have one of their 300s on display. The first impressions and feedback from Swiss and Air Baltic have been extremely positive.
With airlines' increasingly preferring single aisle aircraft and new technology, the C series might finally get some traction.

Willie :ok:

Actually one of the interesting tidbits is that apparently Delta can't fly trans-Atlantic using the CSeries under the terms with Bombardier.

Why? Because Bombardier reportedly sold the CS100 to Delta as a "regional jet" to compete in price with Embraer, so range restrictions were put in as part of the deal. I believe Delta can only operate the CS100 on segments of 1,000nm or less, unless they pay more.

I wrote about this last year -- that the CSeries is really competing with regional jets despite Bombardier's wishes -- but if the Delta agreement has this kind of restriction then it shows how desperate Bombardier was to close the deal.

And this kind of arrangement isn't likely to be repeated with other US majors, especially since Bombardier can't offer the same heavily-subsidized deal anymore.

Lastly I don't think it makes sense for the US majors to fly the CSeries to Paris, Amsterdam, etc. Unless we're talking niche airports like LCY, economies of scale favor larger aircraft. Even WestJet is buying 787s.

I have no idea what's in their sales agreement, but I'd say somebody's telling you little porkies.
Delta also bought the C Series without HUD. Delta needs HUD if they ever decide to operate into LCY. Mandatory kit.
Here's another tid bit for you ...
Delta are now re-considering HUD for that reason and I doubt it would be for services to Bowling Green or Valdosta.
The feasibility of using the CS100 transatlantic out of KJFK or CYUL is suspect, and would be better left to the 787s or similar types, I agree. But I doubt AC or DL would provide services from either of those points exclusively for 100 economy fares. They could run a service like that out of Kitchener, or Binghamton though. Lots of new and viable City pairs off the east and west coast. You need to think outside the box as Delta route planners and Air Canada route planners are discovering.
The C series is outside of union scope. It will not be used by any Express carrier. So, call it a go-cart, call it whatever you like. It will gradually operate on regional services presently served by their regional partners. It will eventually create secondary hubs. They will likely suffocate those Regional partners, greatly reducing their size, and eventually reclaim most of the services they surrendered in the mid-80s when they dumped the inefficient classic airliners in favour of smaller, cheaper turbo props and RJs.

Willie :ok:

The info was from Delta's own testimony before the US Trade Commission. I'd say it's pretty solid. :ok:

Wow!
Perjury.
I guess Boeing isn't the only one telling little porkies at this hearing.

The fact is the B737-700 was out of production before the C series was even certified. Boeing claims in this hearing that Bombardier's dumping of the C series will kill, or has already killed the 700 and MAX 7, (porkie). It was already dead and C Series had very little to do with it. Okay, let's agree with Boeing. C Series unfairly killed the 700 due to dumping, (another porkie). Either way, the 700 is dead.

By Boeings own admission at this hearing they sold 737-700s to United at fire sale prices just to cut Bombardier out of a sizeable order. Their spin on it is that they had to, (another porkie, poor Boeing) because Bombardier were dumping C Series in Delta's lap at way, way below fair market prices.
HA!
What? Just like practically everybody else, including Boeing. Hilarious!
Those aircraft, I believe, were hermetically sealed in the Arizona desert. You can decide for yourself whom to accuse of dumping, but business is business. If Delta had taken the 700s over the CS100s (bearing in mind Delta say the 737-700 wasn't even in the running. You may recall Boeing tried to hawk used EMB190s, not 700s) I seriously doubt Boeing would be making these outlandish claims.

Now, let's discuss the C series as a Regional Jet.
It's not a regional jet, unless Bombardier want to label it that. So far, they haven't. If the manufacturer wants to call it a regional airliner, it's a regional airliner, just like every airliner ever built could be called, labelled, or considered a regional airliner. We might even call them whisperliners. Whatever it gets labelled, it's a label and nothing more. (maybe we could call it a Dreamliner? Star Liner? Astro Jet?)

In China, the CAAC temporarily halted airline industry startups due to a number of safety concerns. They decided all new startups could no longer operate an aircraft type of their choosing. They had to henceforth only operate regional jets or the CAAC would not issue an OC. With potential sales for Bombardier in jeopardy, Bombardier now calls the C series for the Chinese market a regional jet. Problem solved.

Sounds like this regional jet, regional airliner label has crept into this 3 ring circus Boeing has decided to perform. You believe what you like, my sources tell me a very different version.

Willie

Willie...

You seem to know the C Series so I'd like to ask a few questions if I may...

The C Series' cockpit is basically the same as the Global's 6000/7000 and 8000 cockpits except it as an extra screen in the middle (wider cockpit).

From your comments above we know HUDs are available as an option on the aircraft so...

Does the C Series have synthetic vision like the Globals do?

Does the C Series have EVS like the Globals do?

Does the C Series have autoland capability?

Is the C Series CAT III capable and if so, is it a manually flown CAT III assuming no autoland?

Thanks.

And why would Delta perjure themselves to help Boeing in this case?

The 737-700 remained in production long after the CS100 was certified (Dec 2015) and throughout the Delta deal (April 2016). In 2016 Boeing delivered 737-700s to Air Algerie (2), Kunming Airlines (3), Ruili Airlines (1), Lucky Air (2) and the US Navy (1).

Eg., MSN 61341 for Air Algerie only had its first flight on September 2016. In fact technically the 737-700 is still in production, with Kunming Airlines scheduled to take two more deliveries.

The C Series' cockpit is basically the same as the Global's 6000/7000 and 8000 cockpits except it as an extra screen in the middle (wider cockpit).
No. The CS130 has a different cockpit from the GX6/7 and 8. The C series has the same Collins Proline 21 avionics with some differences and FBW with a side stick controller. It will have the same FBW control laws.

From your comments above we know HUDs are available as an option on the aircraft so...

Does the C Series have synthetic vision like the Globals do?
No. But it is wired for later installation should a customer decide to install it. (Great idea by the way)

Does the C Series have EVS like the Globals do?
No. EVS should be available as above, but I'd have to check.

Does the C Series have autoland capability?
Yes. It is under certification now as is ETOPS.

Is the C Series CAT III capable and if so, is it a manually flown CAT III assuming no autoland?
It will be Cat III capable once autoland is certified. This also makes it tougher to push HUD as an option in a Cat III autoland capable aeroplane. Especially dual HUD installations.

Willie :ok:

peekay

Try a broader search, the 700 is by 'special order' I believe. Boeing could build a brand new one tomorrow if you liked. Essentially it's out of production (my opinion). Like the 600. Only the 600 if it were special ordered, Boeing would have to find the jigs to build one. I guess they could always go to the desert for one though.

Willie

Not sure what you are saying here...

I saw the C Series sim in Montreal and aside from the extra screen it looks exactly like the GEX 6000's cockpit which will also be used in the GEX 7000/8000, the Global Vison or Collins Fusion cockpit as I believe they are known which is the latest Pro Line 21, am I not correct?

Of course there will be some differences in aircraft systems between the GEX 6000 and the FBW 7000/8000.

Thanks for the info.