Airbus, Bombardier to enter into partnership

Airbus, Bombardier to enter into partnership

PARIS - Agence France-Presse
Airbus, Bombardier to enter into partnership

In the face of a bitter trade dispute with Boeing, Airbus announced it would take a majority stake in Bombardier’s marquee C-Series airliner program, as the Canadian firm battles a stiff tariff ruling in the U.S.

The landmark agreement comes after the U.S. administration slapped a 220 percent countervailing duty, as well as an 80 percent anti-dumping tax, on Bombardier CS100 and CS300 aircraft imported into the United States. Boeing accuses Bombardier of manufacturing its 100-150 seat planes with public subsidies and selling them at a loss to Delta Air Lines.

The agreement between Airbus and Bombardier aims to allow for significant production savings on the C-Series aircraft and to make use of Airbus’s international reach for sales, the two groups said in a statement.

“It’s a win-win deal for everyone,” said the president of Airbus, Tom Enders.

“I have no doubt that our partnership with Bombardier will boost sales and the value of this program enormously.”

A Boeing spokesman told AFP that the deal represented “a questionable agreement between two competitors, both heavily dependent on state subsidies, to circumvent,” recent American decisions on tariffs and anti-dumping taxes.

Airbus will take approximately 50.01 percent of the shares in CSALP, the entity which manages the C-Series program, with Bombardier and Investissement Quebec holding 31 and 19 percent respectively.

The program’s production headquarters will remain in Quebec.

“We are very happy to welcome Airbus to the C-Series program,” Bombardier’s CEO Alain Bellemare said.

“Airbus is the perfect partner for us, Quebec, and Canada,” he added.

A deal between the two companies had been mooted previously but discussions stalled two years ago. The C-Series is a state-of-the-art aircraft largely built from composite materials. It complements Airbus’ medium-range carrier, the A320, which can carry some 140 passengers. “The single aisle market is a key growth driver, representing 70 percent of the expected global future demand for aircraft,” according to a statement from Bombardier.