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Bombardier’s unexpected win at the U.S. International Trade Commission could accelerate the merger talks between Boeing and Embraer in order to offer an alternative to the C Series, some industry analysts say.
“However that could change with a partnership or acquisition of Embraer, whose portfolio is analogous to Bombardier and who has already started talking about a WTO challenge by Brazil,” analyst Chris Murray of AltaCorp Capital says.
But not everyone views the U.S. ruling as being a big impetus.
Analyst David Tyerman of Cormark Securities says “the die was cast” about a potential merger when Airbus SE agreed last fall to acquire a majority stake in the C Series.
“I would think that both Embraer and Boeing at the end of the day are probably going to be a lot better off getting together because otherwise each one of them has a competitive disadvantage versus the Airbus-Bombardier combination,” he said in an interview.
Bombardier itself wouldn’t say if it expects the ruling will ignite sales.
Bombardier’s stock surged Friday and continued higher in trading Monday. Several analysts raised their outlooks for the company’s share price partially on the removal of uncertainties on the C Series in the United States.
“The conclusion of the trade dispute removes the risk of the program’s success in the U.S., and should allow Bombardier to secure additional orders in the country, where we believe it has a lot of potential,” analyst Benoit Poirier of Desjardins Capital Markets wrote in a research note.
He pointed to JetBlue Airways, Spirit Airlines and Sun Country Airlines which expressed their support for Bombardier during the dispute.
Analyst Steve Hansen of Raymond James said he expects talks with airlines will resume.
“We expect this ruling will immediately help thaw (restart) sales discussions with other U.S. airlines — talks that have reportedly been ‘frozen’ ever since the Department of Commerce imposed preliminary tariffs (of nearly 300 per cent) back in December,” he wrote.