Blue skies ahead for Airbus and Bombardier CSeries partnership

MONTREAL (AFP) – Bombardier has ceded control of its new CSeries to Airbus, abandoning hope of ascending into the top echelons of passenger aircraft manufacturing alongside rivals Airbus and Boeing but securing US market access for its new jetliners.

“I am saddened but at the same time reassured,” by Bombardier's partnership with Airbus on the CSeries, aeronautics professor Mehran Ebrahimi at the University of Quebec in Montreal told AFP. “Everyone wins in this agreement.”

The European aircraft manufacturer took a 50.1 percent stake in the CSeries program in exchange for using its sales and marketing heft to lift CSeries sales.

The CSeries is the first new design in the 100- to 150-seat category in more than 25 years, and only just started to roll off assembly lines.

But development cost overruns and Boeing's complaint that Bombardier unfairly benefited from state subsidies that allowed it to sell 75 CSeries aircraft at below cost to Delta Airlines had put a strain on its bottom line and put the lucrative US market potentially out of reach.

With Airbus now onboard, CSeries sales are expected to take off, Ebrahimi said.

Only 360 have been ordered so far, but Airbus says it can boost those numbers to 3,000 over 20 years, grabbing a 50 percent marketshare.

Furthermore, the partnership provides a way to dodge hefty duties imposed by the US Commerce Department as a result of the Boeing complaint, by building CSeries aircraft for the US market at Airbus' Mobile, Alabama plant.

The 220 percent countervailing duties and 80 percent anti-dumping duties, if confirmed, would have effectively “closed access for Bombardier to the US market,” said Quebec Economy Minister Dominique Anglade.

But Airbus announced plans to open a second final assembly line at its facility in Alabama for the CSeries.