Airline Passengers Are Victimized by Boeing's Crony Protectionism
Competition isn’t always pretty. In fact, it can be downright ugly. But real competition is the most effective way for consumers and industry to get improvements and innovation in products and lower prices.
The current battle between Bombardier, a Canadian plane maker, and the U.S. giant, Boeing, is a good example of what happens when competition gets ugly and more than simple competition comes into play.
This issue is important to airline passengers because it involves bringing to market an airplane that travelers want. The Bombardier C Series regional jet is a quieter, more comfortable regional jet with bigger seats and more luggage room for carry-ons.
Delta, Republic, and Swiss Air are part of a growing group of airlines that are lining up to purchase the Bombardier C Series. The new aircraft offers better fuel-use metrics, an improved plane to match with less-traveled routes and greater operational efficiency. All of this should add up to lower ticket prices and a better experience for airline consumers.
Yet Boeing recently won a dramatic preliminary trade ruling against Bombardier that if left in place will effectively stop the Canadian company from selling their aircraft in the United States.
Surprisingly, Boeing, which had no aircraft to sell in a similar size, objected to a 75-plane sale of C Series regional jets by Bombardier to Delta Airlines. In a case taken to the International Trade Commission (ITC), accusing Bombardier of dumping planes on the American market, Boeing claimed competitive harm.
In a dramatic development, Airbus, a true Boeing competitor agreed to make the Bombardier C Series planes in the U.S. to avoid the import duties. However, Boeing continued to push the case of unfair competition.
When the ruling came down from the Commerce Department, the punishment for the Canadian company was determined to be around a 300 percent tariff in order to sell their C Series aircraft here in the U.S.
After this preliminary ruling, Boeing announced that it was planning to acquire the only other firm that builds regional jets for the U.S. market, Embraer, a Brazilian firm. The loud protests of Boeing now clearly have a far different rationale than simply an unfair trade dispute. Boeing wants to sell its foreign-made Embraer planes in the U.S. while denying Bombardier the same abilities.
All of a sudden, Boeing’s concerns no longer rest with the C Series competition with its 737 aircraft, but with the aircraft of the Brazilian firm that Boeing is getting ready to purchase. Plus, Airbus reached a similar agreement with Bombardier under which Airbus promises to build their planes in Alabama. That should eliminate many of the foreign-trade questions and add to the American economy and its employment growth.
If the current rulings stand, Travelers United finds a true distortion of competition. An American company is poised to sell foreign aircraft that have poorer passenger amenities in the U.S., while its Canadian competition, superior in fuel use, consumer benefits, and industry economies, is frozen out of the U.S. regional jet market.
The flying public is best served by strong competition in all areas of the aviation industry. When Boeing uses the ITC in an attempt to stop entry of Canadian planes into the U.S. aviation system, while at the same time planning to take over the Brazilian firm that competes directly with Bombardier, it smacks of self-dealing. Consumers will ultimately be the big losers.
If anything, Bombardier should be allowed to compete openly in the regional jet market. And, may the best jet win. The results will then truly allow the free market to operate and for consumers to enjoy innovation in the regional jet market that has been missing for decades.