Airbus and Bombardier to partner over C Series Programme

 

 Airbus SE and Bombardier are to become partners on the C Series aircraft programme. A corresponding agreement was signed on 16 October, 2017. The agreement brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders.

 

  • Partnership brings together two complementary product lines, with 100-150 seat market segment expected to represent more than 6,000 new aircraft over the next 20 years
  • Combination of Airbus’ global reach and scale with Bombardier’s newest aircraft family to create significant value for customers, suppliers, employees and shareholders
  • Significant C Series production costs savings anticipated by leveraging Airbus’ supply chain expertise
  • Commitment to Québec: C Series Aircraft Limited Partnership headquarters and primary assembly to remain in Québec, with the support of both companies’ global supply chains
  • Airbus’ global industrial footprint expands with the C Series Final Assembly Line in Canada, resulting in a positive impact on operations in Québec and across the country
  • Growing market for C Series results in second Final Assembly Line in Mobile, Alabama, serving U.S. customers.

 

Airbus has signed an agreement with Bombardier to become a partner on the latter’s C Series aircraft programme. The agreement brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders.

As part of the deal, Airbus will provide procurement, sales, marketing and customer support services to C Series Aircraft Limited Partnership (CSALP), which manufactures and sells the C Series aircraft.

Airbus also expects to purchase a 50.01% interest in CSALP, thereby reducing Bombardier and Investment Québec’s (IQ) shares in CSALP to 31% and 19%, respectively. The single aisle market is a key growth driver, representing 70% of the expected global future demand for aircraft. Ranging from 100 to 150 seats, the C Series is complementary to Airbus’ existing single aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150-240 seats).

 

The world class sales, marketing and support networks that Airbus brings into the venture are expected to strengthen and accelerate the C Series’ commercial momentum. Additionally, Airbus’ supply chain expertise is expected to generate significant C Series production cost savings.                            

Following the completion of the deal, CSALP’s headquarters and primary assembly line and other functions will remain in Québec, Canada, while Airbus will be able to expand its global reach with the C Series Final Assembly Line in Canada. Production of C Series is also set to be carried out at Airbus’ manufacturing site in Alabama, US, as part of the deal.

The proposed collaboration is intended to bring together two complementary product lines, with the 100-150 seat segment configured in the C Series programme is expected to represent more than 6,000 new aircraft over the next 20 years.

“The arrival of Airbus as a strategic partner today will ensure the sustainability and growth of the C Series programme, as well as consolidating the entire Québec aerospace cluster. In the current context, the partnership with Airbus is, for us, the best solution to ensure the maintenance and creation of jobs in this strategic sector of the Québec economy," said Québec’s Deputy Prime Minister, Minister of Economy, Science and Innovation and Minister responsible for Digital Strategy, Dominique Anglade.

 

Ownership Structure and Agreement Highlights:

 

Airbus will enter into commercial agreements relating to sales and marketing support services for the C Series, management of procurement, which will include leading negotiations to improve CSALP level supplier agreements, and  customer support. At closing, there will be no cash contribution by any of the partners, nor will CSALP assume any financial debt. It also contemplates that Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million, and during the second and third years following the closing up to a maximum aggregate amount of US$350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders.

 

 

The transaction has been approved by the Boards of Directors of both Airbus and Bombardier, as well as the Cabinet of the Government of Québec. The transaction remains subject to regulatory approvals, as well as other conditions usual in this type of transaction. There are no guarantees that the transaction will be completed and that the conditions to which it is subject would be met. Completion of the transaction is currently expected for the second half of 2018.

 

 

About Airbus:

Airbus is a global leader in aeronautics, space and related services. In 2016 it generated revenues of €67 billion and employed a workforce of around 134,000. Airbus offers the most comprehensive range of passenger airliners from 100 to more than 600 seats and business aviation products. Airbus is also a European leader providing tanker, combat, transport and mission aircraft, as well as one of the world’s leading space companies. In helicopters, Airbus provides the most efficient civil and military rotorcraft solutions worldwide.

About Bombardier:

Bombardier is the world’s leading manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.

 

Source: ICAERODESIGN, 2017

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Wednesday Oct 18, 2017