Bombardier ceases talks with Airbus & pursues investment in C Series

Bombardier has officially ended talks with Airbus about a potential deal to sell a majority stake in its C Series jet.

Bombardier had hoped to secure a significant order for its C Series from the US aircraft manufacturer, a partnership which would help the Montreal-based aircraft manufacturer in its ambition to capture half the global market of 100 to 149 seat planes.

But shortly after the discussions between the two parties became public, Bombardier confirmed that the talks with Airbus were no longer being pursued.

The recent talks were first reported by Reuters last week, which involved Bombardier making an offer to Airbus for a majority stake in its C Series jet.

The business partnership would have involved Airbus helping Bombardier complete the development of the aircraft in exchange for a controlling stake in the programme.

The proposed agreement would have effectively ended Bombardiers previous independent efforts to break into the lower end of the global airline market dominated by potential business partner Airbus and Boeing.

A deal with Airbus would have been big boost for a company struggling to attract orders for its flagging C Series programme.

Bombardier’s $5.4bn (£3.49bn) programme for the C-Series jet has been plagued with a number of problems, and is currently billions of dollars over budget and two years late from its schedule.

The company has also been unable to secure a new firm order in more than a year, including being unable to secure a single order for the C Series at the Paris Airshow in June.

The aircraft manufacturer is still short of its target of 300 firm orders for the time the C Series aircraft enters service scheduled for mid-2016.

The C Series project has also proved costly to Bombardiers’ bottom line, contributing to their $9b debt in long- term debt (as of June 30) after $808m in free cash flow was spent by the company in the second quarter of 2015.

Despite the setback of the Airbus talks and the problems associated with its C Series programme, a silver lining could still exist for the Canadian company.

Bombardier recently announced that it is in advanced talks to sell its C Series airliners to North American carriers.

Although the potential buyers were not disclosed, sources close to the deal have indicated Bombardier has been in talks with Southwest Airlines and American Airlines Group as well as other US airlines.

Bombardier C Series Aircraft Certification Program Over 90% Complete

Bombardier announced on October 14 that its all-new CS100 aircraft has successfully completed nore than 90% of the certification program and is now in the final stage of flight testing that will include a few weeks of function and reliability tests.

Bombardier also confirmed that production ramp-up is underway, including the first aircraft for launch operator, SWISS.

“It’s a thrill to announce that we’re in the final stage of certification. Following a comprehensive flight test program, we’re now on the cusp of validating that the CS100 aircraft is ready for operation with SWISS,” said Fred Cromer, president, Bombardier Commercial Aircraft.

“Thanks to the dedication and hard work of many people from around the world, over many years, today we’re proud to announce that this last phase of flight testing puts us on track to certify by the end of 2015.”

Rob Dewar, vice president, C Series Aircraft Program, Bombardier Commercial Aircraft, commented: “The tremendous discipline and efforts of our employees, suppliers and customers will be on display over the next few weeks as the CS100 aircraft takes to operating on a commercial airline-type schedule from key airports in North America.

“This function and reliability testing will include airfield performance; landings and airport turnarounds; and on-ground operations – all to ready the CS100 aircraft for operation with SWISS in the first half of 2016.”

“The function and reliability test flights, which will be conducted using typical airline flight routings and operational procedures, will include about 15 representative airports in Canada and 20 in the United States,” added Dewar.