Belfast Telegraph

Bombardier and Airbus link-up 'is massive lift for C Series jet'

 

By John Mulgrew

Airbus could end up acquiring Bombardier's entire C Series programme after the European plane-maker revealed it was taking a majority stake in the aircraft in a bid to outmanoeuvre Boeing and secure thousands of Northern Ireland jobs.

Bombardier was left with the potential loss of a multi-billion pound US deal for its aircraft following a challenge by Boeing that could have seen a 300% tax slapped on sales to America.

Now Airbus will expand its own US facility and complete the aircraft build in the country, after taking a 50.01% share of the C Series programme.

As a result production rates and sales will rise with more C Series planes taking to the skies, according to Paul Everitt, chief executive of ADS, the premier trade organisation for the UK aerospace, defence, security and space sectors

Mr Everitt said "this partnership looks a true win-win for both companies, their workforces and suppliers".

"While this is a new programme, production rates are set to rise and ever more C Series aircraft will take to the skies.

"The partnership agreement between Airbus and Bombardier means the whole aerospace industry in the UK and Northern Ireland has new grounds for optimism and can start to examine the future growth opportunities that the deal offers.

"The workforce and the hundreds of Bombardier suppliers in the UK and Ireland can be reassured that the future of the C Series as an enduring fixture of the aerospace market is now assured."

Martin Craigs, former marketing man for Short Brothers - which was taken over by Bombardier in 1989 - described the news as a "pure blue sky opportunity for Northern Ireland".

"The sun, it seems, still shines on the righteous, and their uplifting wings," he said.

Bombardier builds the C Series wings and part of the fuselage at its specialist Belfast plant.

Airbus can buy out Bombardier after seven years, and the Quebec Government's stake in 2023.

The deal means Bombardier will lose control of the huge C Series project.

But it will benefit from economies of scale from Airbus, as well as the potential of producing wings for Airbus aircraft at its C Series factory in the future.

Dr Esmond Birnie, economist with the Ulster University Economic Policy Centre, said one of the striking things about the Bombardier-Boeing tariffs dispute was that it pointed to the extent that Bombardier was a relatively small player compared to the global aerospace giants, with 2016 turnover of about $9bn compared to 10 times that at Boeing.

"So, a quest for greater scale may be part of the rationale for this link-up with Airbus," he said.

"Also, as the various launch aid and other subsidies from the NI, UK and Quebec governments indicated, Bombardier had been struggling to cover the research and development costs.

"The fact that Airbus have been willing to buy a stake indicates they have some confidence in the long-term potential of the C Series."

Airbus chief executive Tom Enders said the deal was a "win-win for everybody".

Ulster Bank chief economist Richard Ramsey said the Airbus announcement potentially offered a solution to the tariffs row.

"However, concerns and uncertainty remains as to how Bombardier would operate with Northern Ireland/UK, outside of both the customs union and single market.

"Leaving both could significantly disrupt the European aerospace supply chain," he cautioned.

TIMELINE

2008 - C Series is revealed

2013 - The maiden test flight of the CS100 passenger plane

June 2015 - The CS300 plane flies into Belfast for first time

October 2015 - Bombardier and Airbus talks fall through

October 2015 - Canada's regional Quebec government buys a $1bn stake in C Series

FEBRUARY 2016 - Bombardier cutting 1,080 NI jobs

APRIL 2016 - Delta Air Lines deal for up to 125 planes

SEPTEMBER + OCTOBER 2017 - Rulings could see 300% tariff on US sales of C Series

OCTOBER 2017 - Airbus takes on majority stake in C Series

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