Airbus to take majority stake in Bombardier’s C Series jet

Airbus will take a majority stake in Bombardier’s C Series passenger jet program, both companies announced late Monday.

Airbus will acquire a 50.01 percent interest in Bombardier’s C Series Limited Partnership, the companies said in a joint news release.

Airbus, based in Toulouse, France, will establish a second production line for the 100-150 seat jet at its assembly site in Mobile, Ala. That site will assemble C Series planes ordered by U.S. airlines.

The C Series primary assembly line and the partnership’s headquarters will remain in Quebec. But Montreal-based Bombardier will have a smaller stake in the C Series partnership, about 31 percent.

The deal is expected to bring more orders for the composite narrowbody airliner now that it’s aligned with a manufacturer that has a global reach in the commercial airliner business.

Financial terms of the deal weren’t immediately clear, although Airbus CEO Tom Enders said his company would not provide any “upfront” money after the deal closes in the second half of 2018.

“This was the right time for both companies to strike a deal over an aircraft that is fully certified,” Enders said during a trans-Atlantic conference call Tuesday night with reporters and Bombardier CEO Alain Bellemare.

“It brings certainty to the future of the program ... which means we will increase volume,” Bellemare said.

The future of the C Series was uncertain because of a complaint filed by Boeing with the U.S. Commerce Department and International Trade Commission. Boeing alleged that $1 billion in subsidies from the Quebec government allowed Bombardier to dump its planes in the U.S. by selling them to Delta Air Lines at below the cost of manufacturing them. The Delta order, which is for up to 125 planes, is considered key to the success and longevity of the C Series program.

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.

Enders denied that Airbus got involved in the C Series because of Boeing’s trade complaint.

“No, this was not motivated by anything our competitors were doing,” he said.

But he later said that by assembling the C Series in Alabama, those planes delivered to U.S. airlines “wouldn’t be subject to duties” the Commerce Department has proposed. And, he said, “it will create additional U.S. employment.”

Bombardier employs 1,600 people in Wichita, where it manufactures Learjet business jets, operates a business jet service center and flight tests all of the company’s aircraft, including the C Series.

This story was originally published October 16, 2017 at 7:05 PM with the headline "Airbus to take majority stake in Bombardier’s C Series jet."