MONTREAL – European aircraft giant Airbus Group is buying a majority stake in Bombardier’s CSeries program.
The two aircraft manufacturers announced the partnership Monday evening, weeks after the United States announced 300 per cent preliminary duties on exports of the aircraft following a complaint from Airbus rival Boeing.
The partnership is expected to result in significant CSeries production costs savings by leveraging Airbus’ supply chain expertise but Airbus won’t be paying any money for the acquired stake.
Airbus will acquire a 50.01 per cent interest in the CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the plane.
Bombardier will own 31 per cent and the Quebec government’s investment agency will hold 19 per cent.
Bombardier (TSX:BBD.B) CEO Alain Bellemare said Airbus is the perfect partner for the company, Quebec and Canada.
“Their global scale, strong customer relationships and operational expertise are key ingredients for unleashing the full value of the CSeries,” he said in a statement.
“This partnership should more than double the value of the CSeries program and ensures our remarkable game-changing aircraft realizes its full potential.”
Airbus chief executive Tom Enders called the partnership a “win-win for everybody.”
“The CSeries, with its state-of-the-art design and great economics, is a great fit with our existing single-aisle aircraft family and rapidly extends our product offering into a fast growing market sector,” he stated.
Enders said the partnership will secure industrial operations in Canada, Britain and China and bring new jobs to the U.S.
Quebec economy, science and innovation Minister Dominique Anglade said the strategic partnership will ensure the sustainability of the CSeries and consolidate Quebec’s aerospace cluster.
“In the current context, the partnership with Airbus is, for us, the best solution to ensure the maintenance and creation of jobs in this strategic sector of the Quebec economy,” she stated.
Federal Minister Navdeep Bains said the government will review the deal under the Investment Canada Act due to the significant proposed investments in Canada by non-Canadians.
“On the surface, Bombardier’s new proposed partnership with Airbus on this aircraft would help position the CSeries for success by combining excellence in innovation with increased market access and an unrivalled global salesforce,” he stated in a separate news release.
With this deal, Canada would become Airbus’s fifth home country and first outside Europe.
The CSeries headquarters will remain in the Montreal area but a second assembly line for the 100- to 150-seat plane will be set up at Airbus’s facility in Alabama.