Aerospace & Defense

Airbus to Close Deal for Bombardier C Series on July 1

European aircraft maker Airbus and Canadian manufacturer Bombardier announced Friday morning that the deal struck last October giving Airbus control of Bombardier’s C Series program will close on July 1.

Airbus will provide support for Bombardier’s C Series aircraft in exchange for a 50.01% stake in “C Series Aircraft Limited Partnership” (CSALP), a firm formed in 2015 that included Bombardier (62%) and Investissement Québec (38%). Once the deal closes, Bombardier will hold 31% of CSALP, Quebec will hold 19% and Airbus the controlling stake.

According to Friday’s announcement, CSALP plans to open a second final assembly line at the Airbus plant in Mobile, Alabama, “dedicated to supplying U.S.-based customers.” Whether that will serve as an end-run around potential U.S. tariffs on Canadian imports isn’t an issue yet, but it may become one depending on how nasty the relationship between Trump and Canada becomes.

Airbus CEO Tom Enders said:

The strength of the entire Airbus organization will be behind the C Series. Not only will that enable this outstanding aircraft to fulfill its market potential, but we are convinced the addition of the C Series to our overall aircraft product offering brings significant value to Airbus, our customers and shareholders.

Bombardier CEO Alain Bellemare added:

The C Series is widely recognized as the most advanced and efficient aircraft in its class and this partnership will ensure its commercial success. Airbus’ unmatched global scale, strong customer relationships and operational expertise are necessary ingredients for unleashing the full value of the aircraft.

Bombardier employs more than 2,000 workers at its Mirabel, Ontario, location which will remain the company’s headquarters. Global demand for C Series-size aircraft is estimated at around 6,000 and CSALP expects to capture “a large percentage” of that market segment over the next 20 years. The CS-100 is a single-aisle jet with a seating capacity of 100 to 150, and the CS-300 offers seating for 130 to 160 passengers.

Boeing Co. (NYSE: BA) currently has no competing aircraft in the CS-100 class, but the lower end of its 737 MAX family will be challenged by the CS-300. Bombardier delivered 17 C Series airplanes last year and is “gearing up” to deliver twice as many in 2018. Boeing delivers more than that number of 737s every month.