Canada appears set to cancel a fighter jet deal with Boeing, according to a Reuters report. If true, the move would raise the possibility that Boeing’s controversial trade spat with Canadian rival Bombardier may have cost it a deal with up to $6 billion.
Citing three sources familiar with the matter, Reuters reports Canada will nix a plan to acquire 18 Boeing Super Hornet fighter jets. Instead, the news agency’s sources say Canada will buy a fleet of used F-18 fighter jets from Australia.
“The move underlines Ottawa’s anger at a decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier, which the U.S. giant accuses of dumping airliners on the American market,” Reuters writes. “It also casts into question the future of Boeing’s military sales in Canada.”
Speculation about Canada’s motives for the change stem from Boeing’s ongoing battle against Bombardier. The Quebec-based jetmaker’s new C Series jet had been struggling until Delta Air Lines inked a firm order in April 2016 for 75 of the aircraft. The deal pumped new life into the C Series line, which faced weak sales and a bleak future before Delta’s order.
IN PHOTOS: First flight of Bombardier’s C Series jetliner (story continues below)
But the order didn’t sit well with Boeing, which ultimately lodged a formal trade complaint with the U.S. Commerce Department in April 2017. Boeing alleged that Bombardier had received unfair state subsidies and then sold its C Series below cost in the U.S.
Boeing contended that could hurt its own business interests. However, Bombardier – and even Delta – countered, arguing that Boeing no longer makes a commercial aircraft that’s a direct competitor to size of Bombardier’s C Series models.
“It’s pretty hard to find how Boeing’s being harmed,” Delta CEO Bastian said this past October about Boeing’s basis for making a complaint against Bombardier.
“I don’t understand,” Bastian added when asked specifically what he thought Boeing’s motivation might be for taking the fight to Bombardier over the C Series. “When you have a platform that you decided 10 years ago you weren’t going to make it, and then you’re going to try to prevent…