>> An upcoming deal sealed with a cheer.>> Yee-haw
Chief executives of Airbus and Bombardier meeting in Toulouse, France on Tuesday to discuss a potential arrangement in which Airbus would take a majority stake in the Canadian company's C Series jetliner program.>> It's a perfect teaming.
This is why we've done it. And we think it's good news for airlines, customers that are already potential customers, and shareholders on both sides. That's why we call it a win win.
But the pair's U.S. rival, Boeing, did not welcome the news, calling it a questionable deal.
Bombardier was already in dispute with Boeing over the sale of 75 of the 110 to 130 seat aircraft to Delta airlines. Boeing claimed Bombardier was being subsidized unfairly by the Canadian government. And that the Delta deal would have a negative effect on Boeing's own sales. Earlier this month, the US Department of Commerce announced sales of the C Series could be subject to a 300% duty.
Threatening jobs at Bombardier plants like this one in Belfast, Northern Ireland. The new deal would see Airbus manufacture the planes for US Airlines at Airbus's Alabama assembly plant, thereby circumventing any import penalties. Bombardier said the partnership should more than double the value of the C Series program. The sale to Airbus did not come as a surprise to aviation experts.
The Canadians have had huge financial issues in recent years. Previously considering bankruptcy and expecting a $400 million loss in commercial aircraft this year. Now they're hoping to break even by 2020. Canadian Innovation Minister Navdeep Bains, who must decide whether to approve the deal, said it's very positive, on the surface at least.
The deal for 50.01% of the company comes at no cost for Airbus, Europe's largest aerospace group. And investors seem to approve. Early on Tuesday, its shares were significantly up, the biggest rise by a European blue chip stock.