Airbus to acquire majority stake in struggling Bombardier CSeries

Two years after Bombardier first offered Airbus a stake in its CSeries of aircraft, it has been announced that the European aerospace giant is to take a majority 50.1% interest in Bombardier’s C-Series Aircraft Limited Partnership. Bombardier and Investissement Québec will own about 31% and 19%, respectively. Airbus will contribute no cash for its majority stake.
The news comes at an opportune time for Bombardier after the result of a recent petition from U.S plane giant, Boeing, which saw tariffs of 300% being placed by the U.S. Government on all Canadian-manufactured jets imported to America. Both Bombardier and Airbus deny this latest move is intended as an immediate and direct measure to circumvent the tariffs, stating that more recent negotiations between the two companies had begun back in August, prior to the announcement of U.S. government penalties. “We are doing this deal not because of this Boeing petition,” said Alain Bellemare, Bombardier’s chief executive.
Airbus’ chief executive, Tom Enders, commented on the deal: “I have no doubt that our partnership with Bombardier will boost sales and the value of this program tremendously . . . quite a few potential C-Series customers held back because they were not entirely sure of the future of this program going forward.” Both chief executives have indicated that producing planes in Alabama for the American market would enable Bombardier to avoid the imposition of tariffs.
This latest move will put Airbus at loggerheads with Boeing, who brought the petition against Bombardier on the basis that both the Canadian and U.K. governments had been unfairly subsidizing the CSeries program, which had enabled Bombardier to sell, or ‘dump’ 75 Jets in a deal with American carrier Delta Air Lines at what is understood to be well below break-even prices. There was a certain amount of speculation surrounding Boeing’s complaint as the CSeries of aircraft was not in direct competition with its single-aisle 737.
Despite poor sales, Bombardier has always remained confident that there was a market niche for an aircraft that was larger than standard regional jets, yet smaller than the respective Boeing and Airbus single-aisle 737 and A320 jets.