Canadian aircraft maker, Bombardier has agreed to give up control of its C series jetliner program to European firm Airbus. The deal is likely to help Bombardier maneuver the tough trade penalties established by the United States.
The deal stipulates that Airbus will take a 50.01% interest in Bombardier’s C Series Aircraft Limited Partnership (CSALAP). Bombardier would still own a 31% stake in industry while Investissement Quebec (IQ) would receive a 19% stake.
Under the terms, Airbus will not contribute any cash for the majority stake it has claimed. It will, however, take charge of the Canadian aircraft maker and attempt to bolster the demand for its product.
In recent months Bombardier has struggled greatly to secure orders for its aircrafts. Bombardier has also faced a series of problems with the plane, most recently the tariff of 300% that was imposed by the U.S.
Commenting on the deal, Bombardier’s director for Northern Ireland, Michael Ryan stated that the deal was “great news” for the Belfast operation.
Bombardier has also been plagued by accusations from rival aircraft maker, Boeing. Boeing has registered complaints that Bombardier has indulged in anti-competitive practices.
It stated that the Canadian maker was selling the jets below cost price after taking state subsidies from Canada and the U.K.
Airbus will attempt to change that. Airbus has also stated that it will begin jet production at its factory in Alabama. The move could help prevent the tariff imposed on planes sold to U.S. buyers.
Speaking of the deal, Airbus’ chief executive, Tom Enders said, “I have no doubt that our partnership with Bombardier will boost sales and the value of this program tremendously”.
The announcement certainly strengthens the position of the C series aircraft program on the international market.