Airbus seals Bombardier C Series deal

Plane maker to hold majority stake in tie-up, with deal set to close and take effect July 1

Airbus SE sealed its control of Bombardier Inc’s C Series, ushering in a new era for a plane with cutting-edge technology but a spotty sales record.

The European plane maker will hold a majority stake in the partnership, with the deal set to close and take effect July 1, according to a statement yesterday. All regulatory approvals have been obtained.

Airbus’ takeover of the C Series sharpens a clash with Boeing Co for dominance in the lucrative Bombardier, Canada’s biggest aerospace company designed the C Series to crack the Boeing-Airbus duopoly in single-aisle commercial aircraft. But the Montreal-based manufacturer was more than two years late and about $2 billion (Dh7.34 billion) over budget in developing the plane. Bombardier struck the deal with Airbus in October in the midst of a bitter trade dispute in the US with Boeing, which complained the Canadian plane had received illegal government aid that helped it undercut competitors in a sale to Delta Air Lines. Bombardier won relief in January from the US International Trade Commission. market for single-aisle jetliners. Bombardier CEO Alain Bellemare has predicted that C Series sales will accelerate because of Airbus’ marketing reach, while costs will drop thanks to the European planemaker’s clout with suppliers.

Boeing is seeking commercial-aircraft to forge a alliance with Brazil’s Embraer SA, Bombardier’s main competitor.

Bombardier spent more than $6 billion (Dh22 billion) to develop the C Series after launching it in 2008, equipping the aircraft with fuel-efficient engines, large windows and a wider-than-usual middle seat.

Passenger capacity ranges from 108 to 160, a step up in size from Bombardier’s signature regional jets.

In exchange for taking control of the plane programme, Airbus has agreed to provide procurement, sales and marketing expertise to the C Series Aircraft Limited Partnership, the entity that manufactures and sells the jet. Airbus executives have said they would look to extract savings from all C Series suppliers to lower the programme’s production costs.

Airbus shares fell 1 per cent to €98.66 at 9:10am in Paris, giving a market value of €77 billion ($91 billion).

Airbus has pledged to keep the headquarters and primary assembly of the C Series in Mirabel, Quebec.