Bombardier Nearing Joint Venture with Airbus for CSeries Jet Business

Andrew Cummings
October 17, 2017

Bombardier's aerospace division has been under pressure because of lackluster demand for its turboprops and regional jets, and more recently because of a trade dispute with USA planemaker Boeing Co over the CSeries.

The agreement between Airbus and Bombardier aims to allow for significant production savings on the C-Series aircraft and to make use of Airbus's worldwide reach for sales, the two groups said in a statement.

"I have no doubt that our partnership with Bombardier will boost sales and the value of this programme tremendously".

The program's production headquarters will remain in Quebec.

Last month, the Commerce Department upheld Boeing's complaint and proposed duties of up to 300 percent on each C Series plane Bombardier sells in the U.S.

Canada's Bombardier Inc is continuing to look at strategic options for its aerospace division but no deal is imminent, people familiar with the matter told Reuters on Monday. And, he said, "it will create additional US employment".

"Ranging from 100 to 150 seats, the C Series is highly complementary to Airbus' existing single aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150-240 seats)". It has been hurt by lackluster sales and was bailed out by governments in Quebec and Canada. He rejected a deal to acquire it three years ago but said circumstances have changed, saying the plane is now certified and receiving rave reviews. The deal also provides Airbus warrants exercisable to acquire up to 100m Class B Shares of Bombardier, the companies said.

Under the deal, Bombardier will own about 31 percent, while Investissement Québec, the investment arm of the province of Quebec, will hold 19 percent once the deal closes.

Chicago-based Boeing's complaint claims Bombardier's new C Series passenger aircraft receives Canadian government subsidies that give it an advantage internationally. The tariffs have put huge pressure on Bombardier, and unions said workers in Northern Ireland were holding their breath as they waited for the verdict of the trade dispute, fearing their jobs were at risk. "Ultimately, The U.S. actions have created a stronger Bombardier".

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