Airbus, Bombardier and Investissement Québec agree C Series Partnership closing effective July 1, 2018
Amsterdam / Montreal, June 8, 2018 – Having received all required regulatory approvals, Airbus SE (EPA: AIR), Bombardier Inc. (TSX: BBD.B) and Investissement Québec (IQ) have agreed to close the C Series transaction effective on July 1, 2018. The transaction by which Airbus will acquire a majority stake in the C Series Aircraft Limited Partnership (CSALP) was initially announced in October 2017. The Mirabel-based partnership, which was originally established between Bombardier and IQ, will benefit from Airbus’ global reach, scale, procurement organization and expertise in selling, marketing and producing the C Series – a state-of-the-art jet aircraft family in the 100-150 seat market.
Airbus will work with its partners Bombardier and IQ to fully unlock the C Series’ potential and create significant new value for customers, suppliers, employees, shareholders and the communities in which the partnership operates. The partnership’s head office, primary assembly line and related functions will be based in Mirabel, Québec.
As previously announced, Bombardier will continue with its current funding plan of CSALP. Due to the early closing of the partnership, the terms of this plan are updated according to the following schedule: Bombardier will fund the cash shortfalls of CSALP, if required, during the second half of 2018, up to a maximum of US$225 million; during 2019, up to a maximum of US$350 million; and up to a maximum aggregate amount of US$350 million over the following two years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%. Any excess shortfall during such periods will be shared proportionately amongst CSALP’s Class A shareholders. Airbus will consolidate CSALP effective from July 1, 2018 onwards. Further financial information on the transaction will be provided later this year.
The C Series program continues to ramp up. Having delivered 17 aircraft in 2017, it is gearing up to double its deliveries in 2018.
With the C Series’ demonstrated in-service performance and the finalization of this partnership, the parties expect increased demand to support a second C Series Final Assembly Line in Mobile, Alabama, dedicated to supplying U.S.-based customers. The C Series is positioned to capture a large percentage of the estimated 6,000 aircraft needed in this market segment over the next 20 years.
Airbus Chief Executive Officer Tom Enders said: “This partnership extends our commitment to Québec and to all of Canadian aerospace, and we are very glad to welcome so many C Series teammates into the extended Team Airbus. 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.”
“This marks the beginning of a very exciting new chapter for the C Series and the Canadian Aerospace industry,” said Alain Bellemare, Bombardier President and Chief Executive Officer. “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. Together, we will create tremendous new value and opportunities for airlines, suppliers, shareholders and employees.”
“By combining the world’s most innovative and efficient aerospace technology – designed and engineered in Québec – with Airbus’ market and expertise, we are creating a brand new dynamic in a promising segment,” noted Québec’s Deputy Premier, Minister of Economy, Science and Innovation and Minister responsible for the Digital Strategy Dominique Anglade. “Above all, we are ensuring the growth of the C Series and securing the more than 2,000 jobs attached to it in Mirabel. In addition to maintaining the C Series’ head office, engineering and R&D activities in Québec, this partnership positions Montréal as Airbus’ largest research and development centre outside Europe, representing tremendous opportunities for our entire aerospace industry.”
“The C Series team in Québec is proud to participate in this opportunity to drive the success of this amazing aircraft,” said Philippe Balducchi, CEO of the C Series partnership. “Our teams have worked tirelessly to merge cultures and bring operations together well ahead of schedule and are confident in our ability to make this win-win partnership a thriving commercial success. The composition of the C Series leadership team reflects our principles of bringing together the best talent that both sides have to offer. We are ready to turn outward and help our customers get their hands on the hottest aircraft in its segment.”
Category: Airbus, Bombardier, CSeries
Tags: Airbus, Bombardier, C Series, Southeast Aerospace and Defence Conference
This is the deal of the decade. Now Airbus have to make it work. Looking at single aisle in isolation they have wrapped up the market at the top and bottom end. All they need is a A320.5 to usurp the MAX 8 and they hold all the tricks. That and the increase in future productive capacity (70 for A320 and 10++ for the Cseries) is a wonderful generator of cash if they can get it right. Roll on C500 or should we call it the A250!
Good news. Agree with the 320.5 but they must wait for it until the launch of the 797 when Boeing can’t turn back on it. Throw in the 321+ as well and there could be fun. Boeing could be forced to increase 787 prices and there could be a ray of hope for the 330NEO’s.
Hey Anton, I’m with you this time.
A SA portfolio like this
Cs 100: 110-120
Cs 300: 150
CS 500: 180
A320 neo: 189/195
A321 neo: 220-240
A322 neo: 260-270 if stretched about 4m to 48/49m and 5 rows. Would be the same length as B757.
sounds quite dangerous for Boeing. A LR version of a close to 50m A321neo stretch could harm market chances for a MOM.
I don’t see much light for A380 and A330neo, so widebody wise Airbus has a single good selling plane, A359.
For the Plant of Alabama it not going to be limited to the american clients. Philippe Balducchi new head of the cseries partenership said at the bombardier financial meeting last month when ask about that specifcally: we’re not going to tie ours hands in our back. It dosen’t look good for Mirabel in the long run for the final assembly. Don’t know are they going to compete with the low cost salary of Alabama
The Canadian dollar is still on Mirabel’s side.
The cost of living and thus average wages are not.
Assembly is not the major cost. Parts are. Engines (P&W, Canada, PT6?) , gear, pumps, etc.
There is a great deal of industry in Canada much of it US owned.
Obviously its not the worlds worst place to do business.
Well done, its the advancement of aero technologies is the winner here, not airbus v Boeing etc etc, anything that advances the concept of flight is good IMHO!
Wonderful (and congrats/relief to the people at Bombardier). The c-series 100/300 and hopefully 500 would serve the short to medium passenger+baggage transport market so well, with any new a320 derivatives being oriented at passenger+cargo transport for short to medium-long (1-8/10h) flying.
Now AB… Get to work selling, studying how to leverage bombardier’s newer technology, and designing some kickass derivatives in a market that’s always present!!!
Was wondering how much (intellectual) technology/knowledge AB is getting from this deal, wing, CFRP’s, cockpit, etc. Maybe building blocks for an Airbus NMA/MoM?
The biggest plus is the carbon fiber wing and its production process and plant in Northern Ireland.
Airbus has the capability to design, test and bring into production its own brand new carbon fibre wing, but it will cost many billions $ and take years of work. However as the wing span of Cseries and the A320 types are at the same span for the typical shorthaul gate it could make sense to customise the existing Cseries design with its own flaps, wing surface contours , undercarriage bay etc to provide the A320 series a competitive advantage against the 737 which had a completely new wing in the mid 90s.
The lighter wing allows an A321 plus to be stretched without requiring a higher thrust engine.
They could even go further and add the Cseries all carbon empennage to reduce weight even more to allow a further stretch.
Duke – that plant is not part of the deal. Rather it remains with BBD and is a supplier to the JV. Now that is not to say BBD and AB could not come to terms but AB does not get it out-of-hand.
If this joint venture goes well (omens are good on this), I can see BBD and Airbus getting very cosy indeed. Helping Airbus at the higher end of the market with a CF wing should be good for the whole product portfolio, good for BBD. All in all there seems to be a whole range of exciting new airliner designs in the future.
I wonder what Boeing are going to build. It’s going to have to be very good, on time and we’ll priced. Some would say that they’ve already missed their chance.
Of course the plant doesnt come part of the deal, Airbus has been moving away from owning its major factories for some time and Bombardier remaining as a supplier would suit it well.
The main point is the close relationship of the Csalp means levering other capabilities is now much more possible. Airbus doesnt even have to pass on its IP but uses Shorts to its benefit
Well for what I hear it does. it seem that bombardier will be renting the space for the crj. There is already gate in the shop separating the cseries side from the crj side. Working for crj you cannot go on the cseries side and vise versa. I think in 7 year max the crj (if it still exist) will have move out of Mirabel plant.
Making a dedicated FAL for CS-100/300 increases its thruput, the production flow in Mirabel for the C-series is not optimal. Airbus has to figure out how to make a profit producing this “Nice little aircraft”. That might not be so easy as you have to invest in both redesign to get cost down and promise suppliers to increase volume to get good pricing, the easy way is to install as much A320neo components as possible into the CS300 in a block change.
Just trotting along with the current bill of material in the IPC and hoping for volume increse and suppliers lowering prices as volume comes up might not be realistic.
I’m not so sure a redesign is needed. I heard, forget where, that AB is looking at a 30% reduction on price of APU based on sourcing it via their supply chain. Sure it is just one example but there may be others (engines and avionics for example).
I heard Boeing is going to start building their own APUs…
The PW1500G was for exclusive use of the CS-series, will this remain?
Was wondering if there is thrust growth beyond 24Klb for it? It weighs nearly 700Kg/engine less than the PW1100G’s. An option could be to fit an PW1500GX on a lower MTOW (75T?) shorter range (2000-2500Nm) A320 with 24-26Klb thrust and possible larger 78″ fan (higher by pass ratio). Airlines such as LCC’s, those that want LD3’s an others that wants to retain fleet commonality might prefer this over an CS500. Add 737MAX wing tips an you could have an very interesting 160 seat aircraft.
AB has only 50.1% of the CS but 100% of the 320, so they could weigh such an option vs an A250?
Don’t want to talk politics but appears Mr. Trump is not warming towards Canada (and Germany) re trade issues, just as well this deal is done.
https://www.news24.com/World/News/pathetic-little-man-child-trump-takes-more-swipes-at-canada-after-arriving-in-singapore-20180611
As long as those moving throttle levers remain on the A250! Boeing can hopefully brag about the C series copying Boeing moving detents.
Cseries has passive side stick controllers like Airbus, but not ‘central moving’ yokes that are interconnected like Boeing.
So it seems having moving throttles was choosing what they thought best from the big two
https://leehamnews.com/2016/04/29/bjorns-corner-c-series-flight-controls/