Chi­nese state air­craft maker in tie-up talks to re­vive strug­gling Bom­bardier

Financial Times USA - - FRONT PAGE - DON WEINLAND — HONG KONG PEGGY HOLLINGER — LONDON

China’s Co­mac and Bom­bardier have held talks on a deal that could in­ject new life into the debt-laden Cana­dian com­pany’s pas­sen­ger jet busi­ness.

The state-owned Chi­nese air­craft man­u­fac­turer is work­ing with at least one bank on a tie-up that could in­volve it in mak­ing an in­vest­ment in Bom­bardier’s com­mer­cial aerospace arm or tak­ing a stake in the CSeries 100-150 seater pas­sen­ger jet pro­gramme, ac­cord­ing to peo­ple fa­mil­iar with the dis­cus­sions. “Ev­ery­thing is on the ta­ble,” said one. Ac­cess to the CSeries pro­gramme and its new-gen­er­a­tion air­craft tech­nol­ogy would boost Co­mac’s am­bi­tion to be­come a global avi­a­tion leader, com­pet­ing with Air­bus and Boe­ing.

The com­pa­nies are un­der­stood to have been in dis­cus­sions on a deal for some time, although no de­ci­sion is im­mi­nent, the per­son said.

Co­mac did not re­spond to a re­quest for com­ment. Bom­bardier also de­clined to com­ment.

The Cana­dian com­pany, which has re­ceived nearly $3bn in pub­licly funded cash in­jec­tions over the past two years, is ex­plor­ing a sim­i­lar in­dus­trial tie-up with Siemens for its rail busi­ness.

An at­tempt in 2015 to res­cue the costly CSeries pro­gramme by in­ject­ing it into a joint ven­ture with Air­bus col­lapsed in ac­ri­mony.

The Chi­nese ap­proach to one of Canada’s most-prized in­dus­trial as­sets comes after at least one other gov­ern­ment-con­trolled Chi­nese com­pany launched talks with the group, which have since ended.

Bom­bardier has sought partners in its aerospace and trans­port di­vi­sions to mit­i­gate the un­ex­pect­edly high costs of bring­ing its CSeries pas­sen­ger jet into ser­vice, with the pro­gramme run­ning bil­lions over bud­get.

The jet is widely ac­knowl­edged to be highly ef­fi­cient but it has strug­gled in re­cent months to win big new or­ders, with both Boe­ing and Air­bus cut­ting prices on their small­est air­craft.

In re­cent weeks Co­mac has launched a test flight of its first short-haul com­mer­cial pas­sen­ger air­craft aimed at com­pet­ing with Air­bus and Boe­ing. But the C919 is still mainly an assem­bly of parts from other for­eign man­u­fac­tur­ers.

Co­mac and Bom­bardier have been close for years. In 2012, the com­pa­nies signed an agree­ment to find common fea­tures be­tween the C919 and Bom­bardier’s CSeries to re­duce train­ing and main­te­nance costs.

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