June 8, 2018, © Leeham News: Airbus assumes its 50.01% majority stake in the Bombardier C Series program July 1, the two companies announced today.
The company is called C Series Aircraft Limited Partnership, or CSALP.
The CS100 and CS300 may be renamed the A210 and A230, according to a previous press report.
A C Series Final Assembly Line will be constructed in Mobile (AL), next to the Airbus A320 FAL, to serve the US market.
The transaction is closed well ahead of the original schedule, said Harald Wilhelm CFO Airbus, during a conference call.
Combining Airbus’ global reach and scale with the C Series platform will “unlock” the potential of the C Series, he said. Airbus’ marketing, procurement and product support system will benefit C Series, he said.
John di Bert, CFO of Bombardier, said the partnership means the aircraft can reach its full potential. “This is a defining moment for the C Series…and a game-changing moment for the 2,000 employees of the C Series program.”
Di Bert also praised the government of Quebec for its support.
Philippe Balducchi is the new CEO of the C Series Program. There is no announcement about rebranding the aircraft today, he said. A previous press report suggested the airplane will be renamed the CS210 (CS100) and A230 (CS300).
Wilhelm downplayed the prospect of a stretched C Series, the oft-talked about CS500, which would complete directly with the A320. Focus is on the ramp up of the C Series and ramp up of the A320 production to 60 next year and as much as 70 in the near future.
Construction of the Mobile (AL) Final Assembly Line begins next year for an initial capacity of 4/mo. The first aircraft will be delivered from the plant in 2020, officials said.
The plant is intended to supply aircraft for the US market. Whether the production rate for the Mobile plant increases beyond 4/mo depends on US demand.
The Mobile A320 plant had an initial rate of 4/mo and a capacity of 8/mo. The rate is going to 6/mo.
Mirabel remains the main C Series assembly plant with a maximum planned rate of 10/mo.
The combination presents a major challenge or Boeing and Embraer.
For Boeing, Airbus now has a brand new airplane design at the lower end of the mainline aircraft market, competing with the 737-7 MAX. Following Boeing’s redesign of the 7 MAX, adding 12 seats, LNC’s analysis is that that 7 MAX and the CS300—now called the A230—are about equal on seat-mile costs. (The CS300 had a significant advantage over the original 7 MAX design.)
The A230 continues to have a trip cost advantage over the 7 MAX, LNC’s analysis shows.
But Airbus now has a viable 100-seat product offering in the CS100 that Boeing does not have.
Against Embraer, the marketing heft of Airbus breathes new life into the C Series that the struggling Bombardier just could not achieve.
The CS100 competes with the Embraer E190-E1/E2. The E190 is slightly smaller than the A210 and has slightly less range but operationally for most airlines, the in-service use places the two aircraft in the same category.
The Airbus marketing and global product support network gives the C Series an advantage over Embraer.
These factors almost certainly led Boeing and Embraer to pursue to combination to create a new company (“Newco,” as we call it) that will likely be confined to EMB’s Commercial Aviation division and be super-majority owned by Boeing.
Brazilian press reports suggest an agreement could be reached by year-end.
A combination would give the EJet the same type global marketing and product support system that C Series gets from the Airbus combination—although it is noted Embraer’s product support system is better than Bombardier’s on a stand-alone basis.
While the E195-E2 and, to a lesser extent, the E190-E2, help fill in Boeing’s product line below the 7 MAX, the C Series seems a better fit for Airbus than EJet is for Boeing.