Bombardier, Airbus deal on C Series being lauded

MONTREAL — Bombardier and Airbus have finalized a partnership agreement that will see the European aircraft manufacturer acquire a majority 50.01 per cent stake in the C Series commercial jet program effective July 1, the firms said Friday.

Bombardier Inc. will work with Airbus to ramp up production on the C Series passenger jets, which were designed with improved fuel efficiency and less seating capacity than most passenger jets offered by Airbus or its rival Boeing.

The C Series partnership’s head office and main assembly line will be located in Mirabel, Que., and a second line — yet to be built — will be based in Mobile, Alabama, to service the U.S. market.

However, Bombardier and the Quebec government will remain minority shareholders in the C Series program under previous agreements between the province and the company.

Under the final agreement with Airbus, Bombardier has also committed to fund cash shortfalls for the C Series, to agreed maximums, in the second half of 2018, and following years as the partners ramp up production and sales of the C Series.

Bombardier expects to double its C Series deliveries this year from the 17 aircraft in 2017 and is positioned to capture a large chunk of the estimated 6,000 aircraft needed in this market segment over the next 20 years.

Under terms of the deal with Airbus, Bombardier will fund any cash shortfalls during the second half of 2018 to a maximum of $225 million, then up to a maximum of $350 million in 2019 and to a maximum of $350 million (all figures US) over the following two years. Any excess shortfall during these periods will be borne by the partnership’s class A shareholders. The companies said further financial information on the transaction will be provided later this year.

Canada’s Innovation Minister Navdeep Bains issued a statement Friday morning calling the Bombardier-Airbus announcement “a good day for Canada’s aerospace sector.”

Investment Canada reviewed the deal and Bains said he is satisfied it will “benefit Canadians by growing our aerospace sector and creating good jobs. He also called the decision to maintain Mirabel as the primary site for the C Series program as “fantastic news for the talented women and men working in that important aerospace hub.”