Airbus and Bombardier are set to become partners on the C Series aircraft programme. The surprise move, announced on October 16 is, the Canadian plane maker says, a “strategic” decision and follows its unsuccessful attempt to form a partnership with Airbus back in 2015.
Alain Bellemare, Bombardier’s President and CEO remarked: “We are doing this deal here not because of the Boeing petition [claiming it received unfair subsidies], we are doing it because it is a strategic move for Bombardier.”
The US Department of Commerce upheld Boeing’s claim and proposed trade duties of 300% on Canadian-manufactured C Series aircraft imported into the US
However, industry observers believe the partnership aims to circumvent the department’s tariff ruling, which followed accusations by Boeing that Bombardier benefited from illegal state subsidies from Canada and UK governments. Boeing maintained this allowed the Canadian company to “dump their aircraft at absurdly low prices”.
In a short statement immediately after the announcement Boeing said: “This looks like a questionable deal between two heavily state-subsidised competitors to skirt the US government findings. Everyone should play by the same rules for free and fair trade to work.”
Airbus and Bombardier say the deal brings together the European manufacturer’s global reach and scale with Bombardier’s newest jet aircraft family, positioning them to fully unlock the potential of the C Series. For Bombardier’s Northern Ireland factory, which builds the aircraft’s wings, the deal has been described as “great news” and could help to secure 1,000 engineers working on the programme.
Airbus says it will provide procurement, sales and marketing as well as customer support expertise to the C Series Aircraft Limited Partnership (CSALP), the entity that manufactures and sells the C Series. It will acquire a 50.01% majority stake in CSALP while Bombardier will own approximately 31% (previously 62%) and Investissement Québec (an agency of the Government of Québec) 19% (38%).
The deal, which is subject to regulatory approval by Canadian Innovation Minister, Navdeep Bains, is expected to take between six and 12 months to complete. When finalised there will be no cash contribution by any of the partners, nor will CSALP assume any financial debts. Bombardier will continue with its current funding plan and meet any cash shortfalls during the next three years.
The CSALP headquarters, comprising a primary assembly line and related activities will remain in Québec, with support from Airbus, while a second C Series final assembly line (FAL) will be established at the company’s manufacturing site in Alabama, US.
Tom Enders, Airbus Chief Executive Officer, remarked: “This is a win-win for everybody! The C Series offers a great design and economics and is an ideal fit with our existing single-aisle aircraft family. It rapidly extends our product offering into a fast-growing market sector. Not only will this partnership secure the C Series and its industrial operations in Canada, the UK and China, but it will also bring new jobs to the US.”
“We are very pleased to welcome Airbus to the C Series programme,” Bellemare added. “Airbus is the perfect partner for us, Québec and Canada. This partnership should more than double the value of the C Series programme and ensures our remarkable game-changing aircraft realises its full potential.”