Bombardier exits A220 passenger jet program by selling its stake to Airbus

Marco Green
February 13, 2020

Bombardier Inc.is transferring its 33.6 per cent stake in the partnership that builds the plane formerly known as the C Series to Airbus SE and the government of Quebec, the companies said in a statement issued early Thursday.

The move provides Bombardier with approximately US$600 million in cash from Airbus and gets the company off the hook from investing a further US$700 million into the program. Airbus paid Bombardier $591 million to boost its stake to 75 per cent, while Quebec now holds the remaining 25 per cent. The C-Series program drove Bombardier to the brink of bankruptcy before it was bailed out by the Quebec government. The company's net income fell from a $318 million profit previous year to a loss in 2019 of $1.6 billion.

"We are looking at our options".

"This transaction supports our efforts to address our capital structure and completes our strategic exit from commercial aerospace", said President and Chief Executive Alain Bellemare.

Montreal-based Bombardier had once dreamed of taking on Airbus and Boeing by capturing half the global market for 100-to 149-seat planes.

The deal, which is effective immediately, cements Bombardier's exit from commercial aerospace.

The two divisions are Bombardier's main revenue streams after the Montreal-based company announced previous year it would sell its aerostructures business for US$1.2 billion, which followed the sale of its Q400 turboprop business for US$300 million in 2018.

David Chartrand, Quebec co-ordinator for the International Association of Machinists and Aerospace Workers, deemed the deal "the best scenario under the circumstances".

The company said Thursday that its commercial aviation business, which had included the Airbus A220, the Q400 and the CRJ programs, was burning approximately US$1 billion in cash and lost the company US$400 million as of 2016.

Three major rating agencies have voiced concerns this year over the finances of the firm, which acknowledged last month it is looking to lighten its massive debt load.

Other reports by Click Lancashire

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