Published: Tue, October 17, 2017
Money | By Armando Alvarado

Airbus, Bombardier see boost in CSeries sales under deal

Airbus, Bombardier see boost in CSeries sales under deal

Bombardier 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.

Airbus will acquire a 50.01 percent interest in the C Series Aircraft Limited Partnership, which manufactures and sells the plane.

Bombardier won a 75-plane order for the C Series from US -based Delta Air Lines in 2016.

The program's production headquarters will remain in Quebec.

Canada's Bombardier Inc is continuing to look at strategic options for its aerospace division but no deal is imminent, people familiar with the matter told Reuters on Monday.

Financial terms of the deal weren't immediately clear, although Airbus CEO Tom Enders said his company would not provide any "upfront" money after the deal closes in the second half of 2018.

"It brings certainty to the future of the program. which means we will increase volume", Bellemare said.

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Chicago-based Boeing's complaint claims Bombardier's new C Series passenger aircraft receives Canadian government subsidies that give it an advantage internationally.

The move comes after lackluster sales and after the U.S. Commerce Department imposed harsh duties on Bombardier, charging the Canadian company is selling the C Series planes in America below cost and receiving government subsidies. The Delta order, which is for up to 125 planes, is considered key to the success and longevity of the C Series program.

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.

But he later said that by assembling the C Series in Alabama, those planes delivered to USA airlines "wouldn't be subject to duties" the Commerce Department has proposed.

"No, this was not motivated by anything our competitors were doing", he said.

During a conference call for the airline's third quarter results, Delta chief executive Ed Bastian said the duties imposed on the C-Series were "nonsensical", and vowed not to pay the additional tariffs.

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