Posted on: 08 June 2018 by Mark Howells
Airbus will take majority control of Bombardier’s C Series as of 1 July, earlier than originally anticipated.
The European manufacturer will acquire the majority stake in the C Series Aircraft Limited Partnership (CSALP), after all regulatory approvals required for the closing of the transaction were obtained. The head office for the partnership, as well as the leadership team and primary final assembly line, will remain located in Mirabel, Québec, while the growing market for the C Series will support a second final assembly line in Mobile, Alabama, serving US customers, says Airbus.
The 100–150 seat market segment has a forecast demand of 6,000 new aircraft over the next 20 years, according to the companies, and the addition of Airbus’s global reach will create significant value for the aircraft type’s customers, suppliers, employees, shareholders and communities, they added.
Bombardier delivered 17 C Series aircraft last year and is gearing up to double its deliveries in 2018.
The deal was first announced in October last year. Airbus will now work with Bombardier and Investissement Québec “to fully unlock the C Series’ potential,” it added.
Bombardier will continue with its current funding plan of CSALP. Due to the early closing of the partnership, the terms of this plan have been updated to the following schedule: Bombardier will fund the cash shortfalls of CSALP, if required, up to a maximum of US$225 million during the second half of 2018; up to a maximum of US$350 million during 2019; and up to a maximum aggregate amount of $350 million over the following two years. This will be 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 1 July onwards.
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 organisation will be behind the C Series. Not only will that enable this outstanding aircraft to fulfil 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 CEO. “The C Series is widely recognised as the most advanced and efficient aircraft in its class and this partnership will ensure its commercial success. Airbus’s 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.”
Québec’s deputy premier, minister of economy, science and innovation, Dominique Anglade, pointed out that in addition to maintaining the C Series’ head office, engineering and R&D activities in Québec, the partnership would also position Montréal as Airbus’s largest research and development centre outside Europe, “representing tremendous opportunities for our entire aerospace industry.”