Bombardier gets major order from Indian airline

MONTREAL— Bombardier announced the largest potential order for the Toronto-built Q400 turboprop Friday on the same day that the World Trade Organization formally established a panel to review CSeries subsidies.

The Montreal-based company said SpiceJet will become the launch customer for its largest turboprop after placing a firm order for 25 high-density Q400s, with an option for 25 others.

If all 50 planes are purchased by the Indian airline, it would be Bombardier’s biggest-ever sale of Q400s.

The establishment of a dispute settlement panel comes a month after consultations with Canada failed to resolve Brazil’s complaint that government subsidies for the aircraft are inconsistent with Canada’s WTO obligations.

No panel members have yet been appointed in what could be a lengthy process. The WTO review comes in the midst of preliminary duties being imposed on CSeries exports to the United States by the U.S. Department of Commerce. Bombardier was hit this week with nearly 220per-cent countervailing duties. It expects a large anti-dumping duty to be announced on Wednesday.

The preliminary duties, which far exceed what petitioner Boeing demanded, will be decided in the coming months.

Brazilian rival Embraer said the WTO panel will examine more than $3 billion (U.S.) in subsidies received from the governments of Canada and Quebec.

“We believe that the decision of the Commerce Department reinforces the Brazilian government’s claim in the panel opened today at the WTO,” Embraer CEO Paulo Cesar Silva said in a news release.

He said the government subsidies have allowed Bombardier to sell the CSeries at artificially low prices, that distort the global market and harm competitors. Bombardier couldn’t be immediately reached for comment, but it said in August that it was disappointed by Brazil’s request.

The company has said it was ready to respond, adding that the investments and contribution programs comply with all WTO and international trade rules.

The full SpiceJet order would have a list-price value of $1.7 billion (U.S.), although it’s typical for purchasers to get discounts for large orders.