Airbus and Bombardier announce C Series partnership

Airbus SE and Bombardier are to become partners on the C Series aircraft program, according to an agreement signed on Oct. 16, 2017.  The deal brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders.

Under the agreement, Airbus will provide procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership (CSALP), the entity that manufactures and sells the C Series. At closing, Airbus will acquire a 50.01 per cent interest in CSALP. Bombardier and Investissement Québec (IQ) will own approximately 31 per cent and 19 per cent respectively.

CSALP’s headquarters and primary assembly line and related functions will remain in Quebec, with the support of Airbus’ global reach and scale. Airbus’ global industrial footprint will expand with the final assembly line in Canada and additional C Series production at Airbus’ manufacturing site in Mobile, Ala. This strengthening of the program and global cooperation will have positive effects on Quebec and Canadian aerospace operations.

The single aisle market is a key growth driver, representing 70 per cent of the expected global future demand for aircraft. 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 to 240 seats). The world class sales, marketing and support networks that Airbus brings into the venture are expected to strengthen and accelerate the C Series’ commercial momentum. Additionally, Airbus’ supply chain expertise is expected to generate significant C Series production cost savings.

Airbus is strongly committed to Canada and its aerospace sector with Canadian suppliers extending their access to Airbus’ global supply chain. This new C Series partnership is set to secure jobs in Canada for many years to come.

“This is a win-win for everybody! The C Series, 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. I have no doubt that our partnership with Bombardier will boost sales and the value of this program tremendously,” said Airbus chief executive officer Tom Enders. “Not only will this partnership secure the C Series and its industrial operations in Canada, the U.K. and China, but we also bring new jobs to the U.S. Airbus will benefit from strengthening its product portfolio in the high-volume single-aisle market, offering superior value to our airline customers worldwide.”

“We are very pleased to welcome Airbus to the C Series program,” said Alain Bellemare, president and chief executive officer of Bombardier Inc.  “Airbus is the perfect partner for us, Quebec and Canada. Their global scale, strong customer relationships and operational expertise are key ingredients for unleashing the full value of the C Series. This partnership should more than double the value of the C Series program and ensures our remarkable game-changing aircraft realizes its full potential.”

“The arrival of Airbus as a strategic partner today will ensure the sustainability and growth of the C Series program, as well as consolidating the entire Quebec 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,” said Quebec’s deputy premier and minister of Economy, Science and Innovation and minister responsible for Digital Strategy, Dominique Anglade.

The transaction has been approved by the Boards of Directors of both Airbus and Bombardier, as well as the Cabinet of the Government of Quebec. The deal remains subject to regulatory approvals, as well as other conditions usual in this type of transaction. There are no guarantees that the transaction will be completed and that the conditions to which it is subject would be met.

“The C Series leads the industry in design, efficiency and environmental standards,” said Innovation, Science and Economic Development minister Navdeep Bains in Oct. 16 remarks. “It is the benchmark for excellence in narrow-body aircraft and a cutting-edge Canadian innovation. It is no surprise that the C Series is attracting interest from all corners.”

He said the deal is subject to review under the Investment Canada Act, and that it will be evaluated to see how it will “benefit Canadians, support our aerospace sector and create good jobs.”

The C Series is the largest plane assembled in Canada, and it provides work to 238 suppliers located in every region of the country.

“On the surface, Bombardier’s new proposed partnership with Airbus on this aircraft would help position the C Series for success by combining excellence in innovation with increased market access and an unrivalled global salesforce,” said Bains.

“Canada has a highly skilled workforce and a climate that fosters innovation. That’s why our aerospace sector is strong, diverse and well-positioned to take advantage of the opportunities that could arise from this deal, including new pathways into global supply chains across all of the company’s business lines and products.

“With this proposed partnership, Airbus would commit to making Canada its fifth home country and the first outside Europe. Airbus already employs a Canadian workforce of 1,900 people across seven provinces and generates $1.2 billion of Canadian supply chain spending. This presents further opportunity to grow our aerospace industry and create well-paying middle-class jobs across the country,” he concluded.

The deal comes shortly after U.S. trade officials slapped duties of almost 300 per cent on exports of the C Series jet to the American market, in response to a complaint filed by The Boeing Company.

Completion of the transaction is currently targeted for the second half of 2018.