Honeywell heads to court over Bombardier engine pricing dispute

Montreal — Honeywell said it will ask Canada’s top court to hear an engine pricing case involving business jet maker Bombardier, in a dispute that has raised concerns among rival plane makers about revealing confidential terms of business negotiations.

It comes after a Quebec judge in December ordered Honeywell to share records containing engine pricing information with an independent auditor, creating a stir within the discrete world of business jet manufacturing, industry sources said.

The Quebec Court of Appeal last month refused Honeywell’s request to immediately hear the case.

Honeywell “intends to pursue relief before the Supreme Court of Canada in the appropriate time,” the company said in an emailed statement to Reuters. Canada’s Supreme Court selects which cases it hears and it is unclear whether Honeywell will succeed in its efforts.

Bombardier, which uses Honeywell engines in its popular Challenger 350 business jets, has alleged the US supplier was selling propulsion systems to its rivals on more favourable terms, despite guarantees that the Canadian plane maker would get the best price, according to court filings.

Engine pricing, a key cost in business jet production, often comes with steep discounts and is guarded closely between suppliers and plane makers to avoid giving a competitive advantage to rivals.

The court order is raising fears that an audit could reveal sensitive information about rivals such as Textron and General Dynamics Corporation’s Gulfstream Aerospace, according to filings and sources.

It is the latest dispute over such concerns in aerospace.

A recent court dispute between Airbus and Qatar Airways triggered a three-way battle with Boeing over who could see one of the US planemaker’s contracts with the airline.

Such court cases, which were relatively rare before the pandemic, have shone a spotlight on the inner workings of the $150bn global jet industry.

In its February 15 decision, the Quebec Court of Appeal also refused Cessna business jet maker Textron’s request to act as an intervener. Textron had argued that steps such as using an auditor do not adequately protect information “which risks being found in the hands of its rivals, primarily Bombardier,” filings show.

Textron and Gulfstream declined comment.

Bombardier said it welcomed the February 15 decision by the Court of Appeal, in line with the original ruling and would contest any motion to seek leave to appeal to the Supreme Court of Canada.

Reuters