We have yet to mention Bombardier Inc (OTCMKTS:BDRBF) here at Street Register prior to today. This plane and train manufacturer operates in four distinct segments: Business Aircraft, Commercial Aircraft, Aerostructures and Engineering Services, and Transportation.
The company caught our eye with the revelation of a key agreement with an absolute gargantuan in the aeronautics field, that could greatly benefit the smaller (yet still formidably-sized) Canadian company.
Bombardier Inc (OTCMKTS:BDRBF) and Airbus, the aeronautics giant which generated 67B Euro in revenues last year ( nearly $80B USD, are to become partners on the C Series aircraft programme. A corresponding agreement was signed today. The agreement brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders.
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.
CSALP’s headquarters and primary assembly line and related functions will remain in Québec, with the support of Airbus’ global reach and scale. Airbus’ global industrial footprint will expand with the Final Assembly Line in Canada and additional C Series production at Airbus’ manufacturing site in Alabama, U.S. This strengthening of the program and global cooperation will have positive effects on Québec and Canadian aerospace operations.
The single aisle market is a key growth driver, representing 70% of the expected global future demand for aircraft. Ranging from 100 to 150 seats, the C Series is highly complementary to Airbus’ existing single aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150-240 seats). The world class sales, marketing and support networks that Airbus brings into the venture are expected to strengthen and accelerate the C Series’ commercial momentum. Additionally, Airbus’ supply chain expertise is expected to generate significant C Series production cost savings.
Airbus is strongly committed to Canada and its aerospace sector with Canadian suppliers extending their access to Airbus’ global supply chain. This new C Series partnership is set to secure jobs in Canada for many years to come.
“This is a win-win for everybody! The C Series, with its state-of-the-art design and great economics, is a great fit with our existing single-aisle aircraft family and rapidly extends our product offering into a fast growing market sector. I have no doubt that our partnership with Bombardier will boost sales and the value of this program tremendously,” said Airbus Chief Executive Officer Tom Enders. “Not only will this partnership secure the C Series and its industrial operations in Canada, the U.K. and China, but we also bring new jobs to the U.S. Airbus will benefit from strengthening its product portfolio in the high-volume single-aisle market, offering superior value to our airline customers worldwide.”
“We are very pleased to welcome Airbus to the C Series program,” said Alain Bellemare, President and Chief Executive Officer of Bombardier Inc. “Airbus is the perfect partner for us, Québec and Canada. Their global scale, strong customer relationships and operational expertise are key ingredients for unleashing the full value of the C Series. This partnership should more than double the value of the C Series program and ensures our remarkable game-changing aircraft realizes its full potential.” (Source: Marketwired)
As a result of the announcement of the partnership, shares of BDRBF streaked to their highest value since early 2015. We’re going to be very interested in tracking their activity moving forward. Stay locked to Street Register for updates, and we’ll deliver important developments on BDRBF as they unfold. In the meantime, if you’ve yet to sign up for our 100% free newsletter, do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in BDRBF stock, short or long.