Bombardier eyes Asian markets amid U.S. trade spat with Boeing

NEW DELHI (Reuters) – Bombardier Inc is betting on fast-growing markets like India to boost sales of its Q400 and CSeries narrow-body planes, a senior executive said on Thursday, at a time when the Canadian planemaker faces a trade row over sales to the United States.

“The company is very focused on expanding into Asia, as we see Asia, and India for sure, as the growth engines of the sector,” said Francois Cognard, head of Asia Pacific sales at Bombardier, adding this would be its focus region irrespective of how a heated trade spat with larger rival Boeing Co pans out.

Cognard said he saw India’s regional connectivity scheme as “well designed” and likely to boost demand for its aircraft in the country.

India is one of the world’s fastest growing aviation markets and the government’s launch of the regional connectivity scheme last year to boost air connectivity to smaller towns and cities, is seen as a boon for small planemakers such as Bombardier and its European rival ATR.

Bombardier last week finalised a deal to sell up to 50 Q400 planes to India’s SpiceJet valued at $ 1.7 billion by list prices, its largest single order to date for the turboprop plane which will boost its presence in the country.

Rival ATR, the market leader in turboprops, has also secured a provisional order for 50 ATR 72-600 aircraft, worth over $ 1.3 billion at list price, from Indigo, India’s biggest airline by market share.

In turboprops, Bombardier still trails ATR, which controls about 75 percent of the market and is co-owned by Airbus SE and Leonardo SpA. Brazilian rival Embraer SA has also said it would consider returning to the prop market.

“There are still a lot of markets where you can’t beat a turbo in terms of economics,” said Cognard, adding Bombardier’s move to increase the number of seats on the Q400 gave the plane a cost edge in the category.

BOEING SPAT

The focus on Asia comes at a time when Bombardier is locked in an acrimonious trade spat with U.S. rival Boeing.

The U.S. Commerce Department last week slapped preliminary anti-subsidy duties of 220 percent on Bombardier’s new jets, after a complaint from Boeing, which could effectively triple the price of the aircraft and shut it out of the U.S. market if upheld.

“We see this as an abuse of trade laws by Boeing to attempt to block us from penetrating the U.S. market,” Cognard said.

The U.S. jetmaker alleges the CSeries would not exist without hundreds of millions of dollars in launch aid from the governments of Canada and Britain, or a $ 2.5 billion equity infusion from the province of Quebec and its largest pension fund in 2015.

The Commerce Department’s penalty against Bombardier will only take effect if the U.S. International Trade Commission (ITC) rules in Boeing’s favour.

“We expect the final ruling on this early next year,” said Cognard, adding that its customers were not concerned about the spat and more focused on the economics of the jet, which boasts impressive fuel efficiency.