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Airbus SE has agreed to buy a majority stake in Bombardier Inc’s CSeries jetliner programme, giving a powerful boost to the Canadian plane and train maker in its costly trade dispute with Boeing Co.
The deal, which would come at no cost for Europe’s largest aerospace group, would give Airbus a 50.01 per cent interest in CSeries Aircraft Ltd Partnership (CSALP), which manufactures and sells the jets, the companies said.
Circumventing penalty
While Bombardier will lose control of a plane programme developed at a cost of $6 billion, it gives the CSeries improved economies of scale, a better sales network and, crucially, could change the power balance in the trade dispute with Boeing.
The 110-to-130 seat plane, which has not secured a new order in 18 months and is being threatened by a possible 300 per cent duty on US imports, would be built for US airlines at Airbus’s Alabama assembly plant, circumventing any import penalties in a move that apparently caught Boeing off guard. Bombardier said the partnership should more than double the value of the CSeries programme.
“Bombardier no longer has control of this jet, but then again, it’s better to have a 30 per cent share of a very successful programme than to struggle with a highly risky programme that was perhaps too big for them from the start,” said aerospace analyst Richard Aboulafia.
Canadian Innovation Minister Navdeep Bains, who must decide whether to approve the deal, said in a statement that “on the surface, Bombardier’s new proposed partnership ... would help position the CSeries for success”. Boeing — which is also locked in a separate 13-year trade dispute with Airbus — said it was a “questionable deal” between two of its subsidised competitors.
Airbus Chief Executive Tom Enders said the company, based in Toulouse, France, had offered to assemble some of the narrow body jets at its US plant in Alabama for orders by US carriers.
The US assembly line would mean the jets would not be subject to possible US anti-subsidy and anti-dumping duties of 300 per cent, Bombardier Chief Executive Alain Bellemare said.
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