Friday, May 19, 2017

China is reportedly in talks to buy into Canada's Boeing rival

Bombardier may be about to receive a fresh injection of cash from the far east.

According to the FT's Don Weinland and Peggy Hollinger, the Commercial Aircraft Corporation of China (COMAC) has held discussions to either buy a stake in Bombardier's beleaguered commercial aircraft division or its next generation C-Series airliner program.

"Everything is on the table," a person familiar with the talks told the FT.

Even though the two companies have held discussions, the FT clarified that no decision is "imminent".

Over the past few years, Bombardier's commercial aircraft division has struggled to recoup the billions of dollars invested in the development of the company's attempt to compete with the Boeing 737 and Airbus A320 families of airliners.

Even though the Bombardier C-Series has received critical acclaim, the aircraft has been beset by delays and slow sales. Delta Air Lines is the C-Series's largest customer with an order for 75 aircraft valued at $5.6 billion at list prices.

As a result, Bombardier has been forced to accept roughly $3 billion in public bailouts over the past two years.

COMAC, China's state-owned commercial aircraft manufacturer, recently launched two new aircraft types. The ARJ21 regional jet is currently in service, while the Airbus A320-sized C919 airliner flew for the first time this month. Even though both represent the latest in Chinese commercial aviation engineering, neither aircraft can approach the performance capabilities and cutting-edge technology of Bombardier's C-Series.

However, the two companies are no strangers when it comes to cooperation. Bombardier and COMAC have been working together for the better part of a decade to find synergies between the C-Series and the C919 programs.

Bombardier was not immediately available for comment.

(Benjamin Zhang - Business Insider)

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