October 18, 2017 / 4:30 PM / a year ago

UPDATE 1-Delta says it did not play a role in Airbus-Bombardier deal

(Adds details, background)

By Alana Wise

ATLANTA, Oct 18 (Reuters) - Delta Air Lines Inc’s chief executive on Wednesday said the carrier did not play a role in pushing an industry-changing deal between planemakers Airbus and Bombardier Inc, as a regulatory spat between the United States and Canada threatened the future of a Bombardier plane program.

Delta CEO Ed Bastian praised the deal between Europe’s Airbus and Canada’s Bombardier, which would see Airbus take an ownership stake of the troubled Bombardier C-Series program, as a net positive for the U.S. economy.

The agreement for Bombardier to cede 50.01 percent stake in the C-Series to Airbus, and likely move the plane’s final production stages from Canada to an Airbus facility in Alabama, secures the future of the jet and gives Bombardier a possible way out of a high-stakes trade dispute with rival Boeing Co .

“I’m optimistic that the Airbus-Bombardier investment will help minimize some of the political concerns,” Bastian said at the carrier’s media day in Atlanta.

Bastian maintained that he was “mystified” as to why Boeing has sought to oust the narrowbody jet program through a complaint against Bombardier to the U.S. Commerce Department.

The issue between the two manufacturers, in which Chicago-based Boeing alleged that unfair Canadian subsidies to Bombardier have allowed the planemaker to dump the C-Series in the United States at an “absurdly low” price, has pushed into a broader discussion between the United States and Canada over fair trade policies.

Delta has an order for 75 C-Series at a list price of more than $5 billion.

However, the U.S. Commerce Department has proposed a stiff tariff of 300 percent on the planes, which, if finalized in early 2018, would significantly raise the cost of the jets.

Both Delta and Bombardier have said they would not pick up the extra costs, but the Bombardier-Airbus agreement to move final production of the planes into the United States could potentially shield the plane from possible import duties.

Despite the disagreement, Bastian said that the spat between Bombardier and Boeing does not affect the likelihood that Delta would purchase Boeing planes in the future.

Reporting by Alana Wise in Atlanta; Editing by Chizu Nomiyama and Marguerita Choy

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