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Airbus swoops for control of Bombardier jet program

China Daily | Updated: 2017-10-18 07:34

MONTREAL/PARIS - Airbus SE has agreed to buy a majority stake in Bombardier Inc's CSeries jetliner program, giving a powerful boost to the Canadian plane and train maker in its costly trade dispute with Boeing Co.

The deal, which would come at no cost for Europe's largest aerospace group, would give Airbus a 50.01 percent interest in CSeries Aircraft Limited Partnership, which manufactures and sells the jets, the companies said.

While Bombardier will lose control of a plane program developed at a cost of $6 billion, it gives the CSeries improved economies of scale, a better sales network and, crucially, could change the power balance in the trade dispute with Boeing.

The 110-to-130 seat plane, which has not secured a new order in 18 months and is being threatened by a possible 300 percent duty on US imports, would be built for US airlines at Airbus's Alabama assembly plant, circumventing any import penalties in a move that apparently caught Boeing off guard.

Bombardier said the partnership should more than double the value of the CSeries program.

"Bombardier no longer has control of this jet, but then again, it's better to have a 30 percent share of a very successful program than to struggle with a highly risky program that was perhaps too big for them from the start," said aerospace analyst Richard Aboulafia.

Canadian Innovation Minister Navdeep Bains, who must decide whether to approve the deal, said in a statement that "on the surface, Bombardier's new proposed partnership ... would help position the CSeries for success".

Boeing - which is also locked in a separate 13-year trade dispute with Airbus - said it was a "questionable deal" between two of its subsidized competitors.

The Boeing-Bombardier dispute has snowballed into a bigger multilateral trade dispute, with British Prime Minister Theresa May asking US President Donald Trump to intervene in order to save British jobs.

Bombardier is the largest manufacturing employer in Northern Ireland. May's Conservatives are dependent on the support of the small Northern Irish Democratic Unionist Party party for their majority in parliament.

Reuters

(China Daily 10/18/2017 page12)

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