Airbus to close Bombardier CSeries deal July 1

Airbus will take over majority control of Bombardier’s CSeries program on July 1, after the two parties receive all regulatory approvals and final negotiations over financial details of the transaction have been completed.

Airbus will become the majority shareholder of the CSeries Aircraft Limited Partnership (CSALP), holding a stake of 50.01%. Bombardier will control 31% and Investissement Quebec (IQ) will retain 19%. CSALP was initially set up by Bombardier and IQ to allow Quebec to inject state funds into the financially struggling aircraft program.

“Not only will that enable this outstanding aircraft to fulfill its market potential, but we are convinced the addition of the CSeries to our overall aircraft product offering brings significant value to Airbus, our customers and shareholders,” Airbus CEO Tom Enders said.

“The CSeries is widely recognized as the most advanced and efficient aircraft in its class and this partnership will ensure its commercial success,” Bombardier president and CEO Alain Bellemare said. “Airbus’ unmatched global scale, strong customer relationships and operational expertise are necessary ingredients for unleashing the full value of the aircraft.”

The deal reduces the number of Western commercial jet manufacturers from four to three—Boeing, Embraer and the Airbus/Bombardier partnership. Bombardier continues its Q400 turboprop business separately from CSALP. Airbus can take full control of CSALP in early 2026 based on a call option agreed when the deal was initially announced in October 2017.

Separately, Boeing and Embraer are continuing negotiations to move the Brazilian manufacturer’s commercial aircraft division into a joint venture. These negotiations are far advanced according to industry sources. However, the upcoming general elections in Brazil in October 2018 will likely delay a decision, possibly until 2019.

Despite the fact the deal has now closed around half-a-year earlier than expected, Bombardier alone is still covering cash shortfalls of CSALP during the remainder of 2018. In 2019, the company must pay up to $350 million and a maximum of another $350 million in 2020 and 2021. Any additional cash requirements will be covered by CSALP’s shareholders proportionately.

Airbus plans to consolidate CSALP from July 1 and said it will provide further financial details later this year.

The partnership’s head office and primary final assembly line for the CSeries will remain in Montreal. CSALP also confirmed its plans for the US, where Airbus already builds A320 family aircraft. The partners “expect increased demand to support a second CSeries final assembly line in Mobile/Alabama.” The line is going to be “dedicated to supplying US-based customers.”

Having delivered 17 CSeries aircraft in 2017, CSALP expects to double output in 2018.




Zied Hamama

Digital Manager of Firnas Aero