Economy

Airbus and Bombardier to partner in aircraft programme

Bombardier Inc.is in discussions to roll its CSeries passenger jet business into a joint venture with Airbus SE as the Canadian company struggles to overcome stalled aircraft orders and harsh USA trade tariff rulings, people familiar with the talks said.

The deal, which would come at no cost for Airbus, would give the European planemaker a 50.01 percent interest in CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the jets, the companies said.

Crucially, Airbus will establish a second final assembly line for the jetliner in Mobile, Alabama, where the European plane maker now builds larger single-aisle jets for US airlines.

The landmark agreement comes after the USA administration slapped a 220% countervailing duty, as well as an 80% anti-dumping tax, on Bombardier CS100 and CS300 aircraft imported into the United States.

Airbus Chief Executive Officer Tom Enders said: "This is a win-win for everybody".

He said it would use its financial muscle in procurement and sales, while Bombardier's manufacturing operations would continue to build the planes.

"It's an entirely different situation", he said.

Bombardier will own 31 per cent and the Quebec government's investment agency will hold 19 per cent. The deal also provides Airbus warrants exercisable to acquire up to 100m Class B Shares of Bombardier, the companies said.

The two aircraft manufacturers announced the partnership on Monday evening, weeks after Bombardier was hit by a 300% import levy by the United States following a complaint from rival Boeing that the company had dumped its C Series jets at "absurdly low" prices. The U.S. government has slapped steep preliminary anti-subsidy duties on sales of the C-Series jets over that dispute.

"This looks like a questionable deal between two heavily state-subsidised competitors to skirt the recent findings of the USA government", a Boeing spokesman said.



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