Airbus taking control of Bombardier program
Thrusts itself into fight with Boeing over tariffs
Airbus agreed to acquire a majority stake in Bombardier Inc.’s C Series program and will start assembling the jetliner in the U.S., vaulting a technologically advanced but slow-selling plane onto the front lines of the battle with Boeing over global aircraft sales.
Without putting up a dime at closing, Airbus will take just over half of a partnership controlling the C Series. The European manufacturer’s marketing muscle and production expertise boosts the viability of the all-new aircraft after more than $6 billion in development costs forced Bombardier to rely on government assistance.
The deal also thrusts Airbus into the middle of a bitter trade spat between the Canadian manufacturer and Boeing. Following a Boeing complaint that Bombardier sold 75 of its C Series jets to Delta Air Lines for “absurdly low prices,” the Trump administration slapped the aircraft with import duties of 300 percent in recent weeks — roiling U.S. relations with Canada and the U.K., where Bombardier makes the plane’s wings.
In a potential effort to circumvent the tariffs, Airbus will add another final assembly line for the C Series at its factory in Mobile, Alabama.
“This is a program that has been waiting for a deus ex machina, and wow, it really got one,” Richard Aboulafia, an aerospace analyst at Teal Group, said in an interview.
The deal casts Airbus as a global player, while Boeing comes off as “a bit shortsighted and protectionist. It makes Boeing look like they’ve been playing tic-tac-toe against a chess master.”
It’s too soon to say if the new Alabama production line would enable the C Series to avoid U.S. tariffs.
The duties were applied to C Series planes “regardless of whether they enter the United States fully or partially assembled,” according to a U.S. government fact sheet on the matter. Boeing said Airbus and Bombardier were just trying to get around the restrictions.
“This looks like a questionable deal between two heavily state-subsidized competitors to skirt the recent findings of the U.S. government,” Boeing, the world’s largest aerospace company, said in an emailed statement. “Our position remains that everyone should play by the same rules for free and fair trade to work.”
After the transaction, which is expected to be completed in the second half of next year, Airbus will own 50.01 percent of the C Series partnership. Bombardier will hold about 31 percent, and the province of Quebec, which invested $1 billion in the C Series after the cost overruns and delays, will have approximately 19 percent.