Over the past few weeks, Bombardier, the Canadian aircraft manufacturer and Boeing have been having a bit of a spat. To put it mildly.
At the heart of the argument has been a dispute between the two firms about subsidies given from the Quebec and Canadian government to Bombardier’s C-Series Jet.
It’s a new passenger jet launched by the firm to cater for the 100 to 130 seat aircraft market. I flew on a few months ago from Geneva to London with Swiss, which I wrote about on the blog. I wasn’t actually that impressed with it to be honest, although there were some nice touches.🇲🇳
The largest customer for the aircraft to date has been the US carrier Delta, which has placed a firm order for 75 of the type, ostensibly to replace its ageing MD-80 fleet.
Boeing has been arguing for some time now that the Quebec government has been illegally subsiding the programme.
This came to a head earlier this year with the US Department of Commerce placing 300% tariffs on the aircraft, essentially meaning that it became commercially unviable for Bombardier and Delta.
However last night, in what was a surprise to pretty much everything, Airbus and Bombardier signed an agreement where Airbus would take a majority stake in the holding company making the jets. Their press release spells out some of the details:
Under the agreement, Airbus will provide procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership (CSALP), the entity that manufactures and sells the C Series. At closing, Airbus will acquire a 50.01% interest in CSALP. Bombardier and Investissement Québec (IQ) will own approximately 31% and 19% respectively. What’s also very interesting about this, is that the aircraft for the US market will actually be assembled in the Airbus plant in Alabama, neatly sidestepping the tariff row. In addition, all of the jobs at the Bombardier factory in Northern Ireland, where the wings are manufactured, should also now be safeguarded.
All in all, this is a very shrewd move from both parties, which will be sure to infuriate Boeing. I don’t think this will be the end of the saga though, by any means.