Bombardier & Airbus Unite For C Series Aircraft Partnership
Leading global aircraft manufacturers Airbus and Bombardier announced a proposed partnership in mid-October in which France-based Airbus would take 50.1% interest in Canadian Bombardier’s C Series jet program. The deal would also see Airbus move some final assembly work of C Series aircraft to its U.S. production plant but enter Airbus into an ongoing quarrel between Bombardier and Boeing stemming from a sale of dozens of Bombardier C Series jets to Delta Air Lines for what Boeing dubbed “absurdly low prices.” The sale is credited with leading the U.S. Commerce Department to enact a roughly 300% import tariff on C Series aircraft sold in the United States.
With the partnership, Airbus, which operates the A320 family of jets, plans to add a final assembly line for C Series aircraft at its manufacturing site in Alabama. Experts suggest this could potentially lessen the impact of the tariff, which essentially requires U.S. airlines buying C Series aircraft to pay a 300% tax on each aircraft. Airbus and Bombardier state that primary assembly and related functions will remain in Quebec.
In a Bloomberg report, Boeing reportedly stated via email that the Airbus-Bombardier partnership appears to be a “questionable deal between two heavily state-subsidized competitors to skirt the recent findings of the U.S. government.” Boeing added that it believes “everyone should play by the same rules for free and fair trade to work.” Bombardier has consistently denied lowering prices of aircraft sold to Delta Air Lines. Bombardier also denies having received subsidies.
About C Series Aircraft
C Series aircraft, which range from 100 to 160 seats, will complement Airbus’ single-aisle aircraft portfolio, which is concentrated on “the higher end of the single-aisle business (150 to 240 seats).” In addition to adding sales, marketing, and customer support networks, Airbus will supply chain expertise that’s expected to “generate significant C Series production cost savings.” Airbus and Bombardier project the 100 to 150-seat market segment to total 6,000-plus new aircraft over the next 20 years.
About The Partnership
Various Bombardier and Airbus executives lauded the partnership as beneficial for both parties. Tom Enders, Airbus CEO, said in a press release that the deal secures the C Series and its industrial operations in Canada, the U.K., and China while also bringing new jobs to the United States. Alain Bellemare, Bombardier president and CEO, said that Airbus’ various assets will be key to unleashing the C Series’ full potential. “This partnership should more than double the value of the C Series program and ensures our remarkable game-changing aircraft realizes its full potential,” he said.
Both companies’ board of directors and the Cabinet of the Government of Quebec have approved the partnership, which is still subject to regulatory review. The deal is expected to be completed in 2018’s second half.
Source: Airbus