372mm Bombardier bailout - APPROVED

[Go4Long]

I'm thinking the other way...I wonder if Boeing was planning EXACTLY what Airbus just did in order to get themselves a new Narrow Body single Aisle jet, since they really haven't done anything innovative in the category since the 1960's.

Granted the government would have slammed the door on them hard given their lobbying tactics.

[Xtrema]

Lack of detail on the deal seems to tell me Airbus picked this up for next to nothing. Just like that Buffet on Home Capital.

And Airbus will build Delta's order of C series in Alabama to bypass the tariffs.

Boeing got outplayed here.

[rage2]

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Lack of detail on the deal seems to tell me Airbus picked this up for next to nothing.

That's what it sounds like. No cash on the deal at all. This is like the Flames picking up Hamilton and Hamonic for draft picks.

[dirtsniffer]

so the government of Canada gave bombardier a bunch of money so they could sell planes at a huge loss and then they just gave away the company? Seriously?

[rage2]

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so the government of Canada gave bombardier a bunch of money so they could sell planes at a huge loss and then they just gave away the company? Seriously?

Just half, not the whole thing.

Honestly though, it's not really for nothing. They all of a sudden have use of a plant to build the planes in Alabama, duty free.

[kenny]

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so the government of Canada gave bombardier a bunch of money so they could sell planes at a huge loss and then they just gave away the company? Seriously?

Airbus definitely comes out ahead of Bombardier but nobody was buying the C-series, the only orders they had were preorders with no sales in almost 2 years and a big chunk of the market eliminated with the huge tariffs/duties. Now the American market is back on and global market will likely be easier to sell to with Airbus help.

[Go4Long]

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That's what it sounds like. No cash on the deal at all. This is like the Flames picking up Hamilton and Hamonic for draft picks.

They bought 100'000'000 shares at about $2.29 per share, so yes, very little cash involved. The sad reality is that it was Boeing's power play here that made the deal so cheap.

[revelations]

And in Boeing's own arrogance, the reason for the tariffs was that they were trying to prevent Bombardier from becoming a major player..... which they now became (well not quite, but certainly more plausible).

[Go4Long]

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And in Boeing's own arrogance, the reason for the tariffs was that they were trying to prevent Bombardier from becoming a major player..... which they now became (well not quite, but certainly more plausible).

See my post at the top of the page...I personally think Boeing wanted the C-Series, and was just trying to push the price further down so they could buy it.

[benyl]

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Just half, not the whole thing.

Honestly though, it's not really for nothing. They all of a sudden have use of a plant to build the planes in Alabama, duty free.

50.01% Full control, half the profits for no money. Nice.

CBC says it was free:
http://www.cbc.ca/news/business/bomb...ries-1.4357567

Bombardier Inc. announced Monday it has sold a majority stake in its CSeries passenger jet business to European aerospace giant Airbus for no cost.

This is basically a bailout by Europe. haha. Wonder what Embarer thinks of this.

[rage2]

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50.01% Full control, half the profits for no money. Nice.

CBC says it was free:
http://www.cbc.ca/news/business/bomb...ries-1.4357567



This is basically a bailout by Europe. haha. Wonder what Embarer thinks of this.

Apparently they did buy 0.5% of bombardier shares to get 50.1% interest in the C Series LP. But yea, basically peanuts.

It'd be funny if Delta was still the only deal going forward. They've been trying to sell these C Series forever without much luck. Maybe someone in the industry here can shed some light on what makes the C Series so undesirable?

[revelations]

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See my post at the top of the page...I personally think Boeing wanted the C-Series, and was just trying to push the price further down so they could buy it.

I read an article about this - Boeing apparently was fearful of a re[eat of what happened 20-30 years ago with Airbus and they, back then, did not act aggressively enough (in their opinion) to deal with the rising competitor. This time they decided to act - even though it was inappropriate.

[kenny]

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Maybe someone in the industry here can shed some light on what makes the C Series so undesirable?

Just a guess, but the CSeries goes against what airlines have been doing the past few years (cramming in seats as tight as possible). I think the seating on CSeries is like premium economy seating in a regional jet config. Its 5 seats per row instead of 6.

[revelations]

Basically, the C series was designed and optimized all the way through for a very specific market. This places it (in theory) above other products that have been just modified for that market (aircraft that have been reconfigured and re-engined).

10-20% better mileage apparently as a result. Even the engines were optimized for the aircraft (which is a way that more large aircraft are going to).

Corporate promo:

http://commercialaircraft.bombardier...echnology.html

[Go4Long]

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Just a guess, but the CSeries goes against what airlines have been doing the past few years (cramming in seats as tight as possible). I think the seating on CSeries is like premium economy seating in a regional jet config. Its 5 seats per row instead of 6.

They're actually not lagging all THAT much in terms of orders. Here's the outstanding orders:

◾Republic Airlines – 40 CS300
◾Macquarie Air Finance – 40 CS300
◾Ilyushin Finance Co. – 32 CS300
◾Swiss – 20 CS100, 10 CS300
◾Falko Regional Aircraft – 24 CS100 (commitment)
◾Zhejiang Loong Airlines – 20 CS100 (commitment)
◾Lease Corporation International – 3 CS100, 17 CS300
◾flymojo – 20 CS100 (commitment)


The C100 is a narrow body regional type. It's a closer competitor to the CRJ than the 737, so it's not the layout that's the issue as most of the types are a 3-2 layout, or a 2-2 layout.

I think a lot of it has to do with being the first adapter to a new platform. Concerns about stability on the part of Bombardier. Concerns about setting up a whole new maintenance program. Familiarity to the existing offerings. And a lot to do with global distribution and marketing issues. All the other offerings have a lot more money to spend on marketing efforts.

Bombardier's private jets have a huge maintenance network already set up. But this is a whole nother animal.

Another thing that drives the desirability of the CS100/300 UP is when fuel prices go up, as they're somewhat more fuel efficient than the competitors, and fuel represents a huge portion of the operating costs.

The other issue is the list price. The CS100 is ~$10 million more than the Embraer E195-E2 from a list price perspective. It beats it in fuel burn by a healthy margin. Beats it in range, but that really isn't that big of a draw in the regional jet market.

I guess the short version is that there's lots of reasons that it could be a tough sell, but I think it WILL sell under the wing of Airbus.

[benyl]

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Maybe someone in the industry here can shed some light on what makes the C Series so undesirable?

Look at the title of the thread. Bombardier is basically insolvent. Would you buy a fridge today from Sears? haha

[benyl]

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Another thing that drives the desirability of the CS100/300 UP is when fuel prices go up, as they're somewhat more fuel efficient than the competitors, and fuel represents a huge portion of the operating costs.

When is that going to happen? Oil companies are shifting to an abundance model for oil.

Lowering fuel burn is probably the driver rather than the price. They just pass that on to the consumer like they did in the past with the "fuel Surcharge."

[Go4Long]

I'm not a bombardier fan boy, honestly, but it's really hard to deny that the CS300 is the best aircraft in the segment...they're just having trouble breaking in to the segment.

I found this chart comparing the various aircraft in segment on a cost per flight mile and a cost per seat mile basis. this is for a SHORT (relatively at 600nm) flight. The belief is that longer the flight the more down and right the C series moves.

[dirtsniffer]

So with the recent news, did bombardier give away half of the jet for nothing?

[Go4Long]

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So with the recent news, did bombardier give away half of the jet for nothing?

Depends on how you look at it. They gain access to a massive distribution network and marketing powerhouse, access to additional production capacity, and the added stability of adding the Airbus name to their perceived stability (or prior to this, their perceived lack of stability)...so in terms of a short term gain, yes, could be deemed to be a bit of a loss...long term wise, probably a win.