Airbus takes majority stake in Bombardier’s jetliner program

Airbus, European Aerospace firm, is to take a majority stake in Bombardier’s C-Series jet project by buying a 50.01 per cent stake. As part of the deal, Bombardier and Investissement Quebec will own approximately 31 per cent and 10 per cent respectively. Airbus will not make any upfront investment in Bombardier’s jet as part of the arrangement, but the Canadian plane maker will gain access to Airbus’s expensive marketing, sales operation, customer support network and its aerospace manufacturing supply chain. The move has broad implications for the U.S. Aerospace manufacturing and the global balance of power to build jetliners for the world’s airlines. This deal gives Airbus a broad range of airplanes from 100 seats all the way through Airbus’s 555-seat A380 superjumbo, and win business over Boeing.

Earlier Bombardier, which employs over 1000 staff on the C-Series, mostly making the plane’s wings, in Belfast has faced a series of problems over the plane, most recently a trade dispute within the US. The C Series had come under attack this year from Boeing, which alleged that Canada’s Bombardier had sold the 100 and 150-seat jet to Delta Air Line at below the cost prices, which triggered the US Department of Commerce preliminarily levied a 300 percent tariff on the plane’s imports, setting a diplomatic row that has drawn in the UK and Canadian governments.

Bombardier was accused of anti-competitive practices by rival Boeing, which complained to the US authorities. Boeing accused the Canadian firm of selling the jets below cost price after taking state subsidies from Canada and the UK.

Airbus thinks it can solve the C-series tariff problem by assembling the plane for US customers inside the US at its factory in Alabama.

Bombardier’s Northern Ireland’s director Michael Ryan said the deal was “great news” for the Belfast operation.

The C Series had come under attack this year from Boeing, which alleged that Canada’s Bombardier had sold the 100 and 150-seat jet to Delta Air Line at below the cost prices, which triggered the US Department of Commerce preliminarily levied a 300 per cent tariff on the plane’s imports, setting a diplomatic row that has drawn in the UK and Canadian governments.

Bombardier was accused of anti-competitive practices by rival Boeing, which complained to the US authorities. Boeing accused the Canadian firm of selling the jets below cost price after taking state subsidies from Canada and the UK.