Airbus takes control of Bombardier CSeries in rebuff to US threat
Airbus agreed on Monday to buy a majority stake in Bombardier’s CSeries jetliner programme, grabbing control of a struggling competitor at the second attempt and giving the Canadian plane-and-trainmaker an unexpected boost in its costly trade dispute with Boeing.
The deal, which would come at no cost for Toulouse, France-based Airbus, would give the European planemaker a 50.01 per cent interest in CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the jets, the companies said.
While Bombardier will lose control of a plane programme developed at a cost of $6 billion, it gives the CSeries improved economies of scale and a better sales network. The 110-to-130 seat plane has not secured a new order in 18 months and is being threatened by a possible 300 percent duty on US imports.
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”.
Airbus Chief Executive Tom Enders said the company has offered to assemble some of the narrowbody jets at its US plant in Alabama for orders by American 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 on a media conference call.
Bellemare called the deal with Airbus, which was first attempted unsuccessfully in 2015, a “strategic” decision that is expected to close in the second half of 2018.
“We’re doing this deal here not because of this Boeing petition. We are doing this deal because it is the right strategic move for Bombardier,” Bellemare said, referring to Boeing’s complaint that the Canadian firm received illegal subsidies and dumped CSeries planes at “absurdly low” prices.