By Pádraig Hoare
Some 1,000 jobs have been cemented in Belfast as Canadian aviation parts producer Bombardier reached a partnership agreement with Airbus on its C-Series line.
Airbus is set to close a deal to take a controlling stake in Bombardier’s C-Series jetliner programme on July 1, the companies said, in a move expected to kickstart the European planemaker’s ability to put its marketing and cost-cutting muscle into the Canadian plane programme.
Bombardier agreed in October to sell Airbus a 50.01% stake in its flagship commercial jet for a symbolic Canadian dollar, as the plane programme battled sluggish sales and low production, which made it harder to keep a lid on costs.
It is the latest in a series of boosts for one of Belfast’s largest workforces, after Bombardier said last month that it will produce 30 CS300 passenger jets with an option for a further 30 for Latvian carrier airBaltic, as well as an order from American Airlines to buy 15 new CRJ900 regional jets with an option for a further 15.
Bombardier employs around 4,000 in total in Belfast. Around a quarter of the staff work on the C-Series aircraft programme.
It is believed the workers have been assured that Belfast is integral to its future C-Series production.
With the latest agreement, Airbus will be able to offer airlines deals by packaging the C-Series with its own jets and is expected to use its purchasing prowess to drastically cut the price of parts, along with improving efficiencies internally.
Bombardier will now own about 31%, while Investissement Quebec, the investment arm of the province of Quebec, will hold a 19% stake.
Bombardier raised its guidance for 2018 consolidated earnings before interest and tax by $100m (€85m) to a range of between $900m and $1bn, to reflect the separation of the C-Series jetliner programme.
Bombardier also said it cut its revenue guidance by $500m to $16.5bn. The company added that its C-Series results will no longer be consolidated in its results from July 1.
The Quebec government, through its financing arm, took a 49% stake in the C-Series programme in 2015 for $1bn. Quebec’s share, most recently worth 38%, slipped to 19% following the deal with Airbus.
The deal was announced at a time when Bombardier was locked in a trade dispute with US planemaker Boeing, which led to concerns in Belfast over the future of the 4,000-strong workforce.
The dispute ended in March when Boeing said it will not appeal a US trade commission ruling that allows Bombardier to sell its C-Series in the US without hefty tariffs.
Additional reporting Reuters