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Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:18 pm
by ytz
1) Don't get why people are so concerned with cockpit commonality. At some point tech evolves and so will airlines. The cost of conversion gets taken into account. It's not absolute impediment. Or we would see far less mixed fleet airlines. I'd put money on Airbus' cockpit evolving towards the CSeries than the other way.

2) And I don't get why people are obsessed with the idea what Airbus has to protect the 320NEO. For now? Sure. But they are explicit. In 7.5 years, they will own the CSeries. Mark it in your calendar. You all now know that in 8.5 years at the latest, the CS500 will be in service. After 7.5 years, every CSeries sold will see 100% profit going to Airbus. The only question here is whether Airbus sees a business case to do this before 7.5 years. Sure they would bleed some profits to BBD. But imagine the damage the CS500 could do to Boeing, especially if combined with a newly focused 320.5 and 322. But I guess they'll probably wait.....my guess is see what Boeing announces for the MOM.

3) It's blatantly obvious that this buys Airbus a lot of room. They need to upsize the 320 to ~200 seats in LCC config and the 321 to 250 seats in LCC configs. With the CS500 covering the 150-170 seat market, they now get to cover the 180-250 seat market with a substantially more optimized aircraft family. Only two models needed. No more having to try and optimize a wing for 150 seats in 2 class config.

4) Some people are trying to sell this as somehow not a threat to Boeing. Why is the stock down then? It's blatantly obvious that Boeing played themselves. This deal might have happened. But I doubt it would have happened on such stark terms which effectively hand Airbus the whole program in 8 years. Boeing effectively helped Airbus get a 320 replacement program for very low cost. You can't make up stupidity like this. Oh.... and Boeing's defence sales in Canada and the UK are still under threat. If I were a Boeing shareholder, I'd want the CEO's head as a minimum.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:26 pm
by ytz
seahawk wrote:
It makes interesting option for a re-winged A320.

You could go with an A320+ (1 extra row) - A321 - A322 and have the CSeries cover the market below. Imho the change of a A321 stretch with a new wing has hugely increased today.


The 320 needs three extra rows to reach the 200 seat category. But I'm with you. I think the odds of a re-winged and stretched 320/321 combo just increased substantially.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:27 pm
by holzmann
Any company that attempts to bully the competition with lobbyists instead of innovation deserves to lose. I have no sadness for Boeing this morning. The whole, "let's move to Chicago and become a lobbying company instead of an aircraft builder" is really starting to show but as the #1 exporter in the US, they are indeed #TooBigToFail. If anyone or anything seriously threatens B, the taxpayer will make them Government Aircraft just like Government Motors.

Now, I have zero doubt this A+BBD scenario is one they had to have imagined. They are idiots if they didn't. They may have just been too skeptical as to the probability.

Who are the losers besides Boeing? Maybe Canada? Maybe Ireland? I see it being advantageous for Airbus to move the FAL to Mobile, AL. Yay American jobs! But what about jobs elsewhere? The first rule of M&A is consolidation, where the junior partner loses. Jobs will be lost. In the short term, BBD could even be a financial and manpower "distraction" for Airbus, taking resources from other projects.

In the long term, if Airbus plays it right, and I hedge that they will, baring any current investigations into bribing / wrongdoing, the 737 is doomed from pressure on all sides. Maybe with MOM/797, Boeing is thinking the market wants a capacity upgrade and may cede the < 200 pax plane segment completely? Doubtful. The time for MOM might be 2025. The time for the "837" might be 2035 when the Airbus+BBD competition reality is clear and their current AC (C-series and A32Xneo) are also quite long in the tooth. By then they too perhaps acquire Embraer?

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:29 pm
by speedbored
This deal has been in the works for quite a long time.

I find it hard to believe that Boeing haven't been aware of the negotiations that have been going on, and I personally suspect that a major part of the purpose of the Boeing complaint to the US Dept. of Commerce might have been an attempt to dissuade Airbus from going ahead with it.

Definitely a great deal for Airbus.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:30 pm
by NZ321
dodoma wrote:
Can anyone give some insight on which regulatory approvals are required for this deal to go through? For sure there are some Canadian government bodies involved, but what about the EU and the US?


Exactly
Love to know

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:34 pm
by Cruiser
Leahy has probably called about 20 airlines this morning...I bet he has some big leads now that this is led by Airbus.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:39 pm
by ytz
On the jobs front, I've read elsewhere that Airbus has given guarantees of current employment levels in Montreal till 2041.

The only jobs moving are the growth owing to the US market which won't mean much if Montreal gets more sales in Europe and Asia.

To those saying that Boeing knew. If they did, their PR sucks. Check out the ignorant tweets. They don't indicate foresight.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:40 pm
by Dutchy
ytz wrote:
On the jobs front, I've read elsewhere that Airbus has given guarantees of current employment levels in Montreal till 2041.

The only jobs moving are the growth owing to the US market which won't mean much if Montreal gets more sales in Europe and Asia.

To those saying that Boeing knew. If they did, their PR sucks. Check out il the ignorant tweets. They don't indicate foresight.


Guarantees till 2041(!), they have quite a foresight in developments on the job front. Automatisation will be a big factor till then. Are they planning to build Airbusses on the production lines of the CS-series? Somewhere in the mid 30-ish the CS-series won't be competitive and major investment needs to be done in either update or creating a new design.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:44 pm
by ytz
NZ321 wrote:
dodoma wrote:
Can anyone give some insight on which regulatory approvals are required for this deal to go through? For sure there are some Canadian government bodies involved, but what about the EU and the US?


Exactly
Love to know


There really can't be much in regulatory hurdles. Airbus is buying the CSeries. Not Bombardier itself. And they are building the airplanes in the US. I'd like to see someone explain how regulation can be used to stop Airbus from making and selling airplanes in the US.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:44 pm
by Polot
Dutchy wrote:
ytz wrote:
On the jobs front, I've read elsewhere that Airbus has given guarantees of current employment levels in Montreal till 2041.

The only jobs moving are the growth owing to the US market which won't mean much if Montreal gets more sales in Europe and Asia.

To those saying that Boeing knew. If they did, their PR sucks. Check out il the ignorant tweets. They don't indicate foresight.


Guarantees till 2041(!), they have quite a foresight in developments on the job front. Automatisation will be a big factor till then. Are they planning to build Airbusses on the production lines of the CS-series? Somewhere in the mid 30-ish the CS-series won't be competitive and major investment needs to be done in either update or creating a new design.

Airbus has no problem making that guarantee about current employment levels because right now the C series is staffed for a very minimal production rate. Airbus still has plenty of flexibility to move the bulk of C series production/assembly to wherever they see fit in the future assuming they can wring success out of it.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:46 pm
by ytz
Dutchy wrote:
ytz wrote:
On the jobs front, I've read elsewhere that Airbus has given guarantees of current employment levels in Montreal till 2041.

The only jobs moving are the growth owing to the US market which won't mean much if Montreal gets more sales in Europe and Asia.

To those saying that Boeing knew. If they did, their PR sucks. Check out il the ignorant tweets. They don't indicate foresight.


Guarantees till 2041(!), they have quite a foresight in developments on the job front. Automatisation will be a big factor till then. Are they planning to build Airbusses on the production lines of the CS-series? Somewhere in the mid 30-ish the CS-series won't be competitive and major investment needs to be done in either update or creating a new design.


Posted by a worker at Mirabel. Take the third hand info for what it's worth.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:49 pm
by dodoma
ytz wrote:
NZ321 wrote:
dodoma wrote:
Can anyone give some insight on which regulatory approvals are required for this deal to go through? For sure there are some Canadian government bodies involved, but what about the EU and the US?


Exactly
Love to know


There really can't be much in regulatory hurdles. Airbus is buying the CSeries. Not Bombardier itself. And they are building the airplanes in the US. I'd like to see someone explain how regulation can be used to stop Airbus from making and selling airplanes in the US.


Well one thought comes to mind: With the industry moving more to a duopoly again the antitrust authorities might have a say in it. Anyone here who know their way around this stuff?

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:51 pm
by rheinwaldner
Noshow wrote:
If Airbus builds the C Series in Alabama they eat into their own market of A319 and A320. Which leads to my speculation that their narrowbodies are set to grow way above A321neo sizes. The next single aisle familiy can start bigger (like from 180 to 200 seats) and better counter the upcoming middle of the market stuff from Boeing.

I cant imagine that Boeing in order to get a MOM is giving up a market several times as big as the MOM market -> No MOM will appear anytime soon IMHO.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 12:52 pm
by bmacleod
Is it very likely that the US Dept of Commerce will soon back down from its 300% tariffs on Bombardier?

Or will it wait for an ITO ruling?

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:02 pm
by william
speedbored wrote:
This deal has been in the works for quite a long time.

I find it hard to believe that Boeing haven't been aware of the negotiations that have been going on, and I personally suspect that a major part of the purpose of the Boeing complaint to the US Dept. of Commerce might have been an attempt to dissuade Airbus from going ahead with it.

Definitely a great deal for Airbus.


Stop being rational, this is an emotional thread with over the top jumping to conlusions....... :lol: :lol: :lol:

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:02 pm
by BaconButty
sxf24 wrote:
I think you missed my point: what can Airbus do tomorrow, or next month, or even next year to help the C-Series sell better without taking away A320 profits? There is certainly lots of opportunity, and very little risk to Airbus, but I'm struggling to see how the future for the C-Series is quite as rosy as many portray.

OK, but is that relevant? Any modern aircraft program is going to run at a loss initially, the 787 has not long reached production break-even, the A350 is targetting 2020 I believe.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:03 pm
by par13del
ytz wrote:
There really can't be much in regulatory hurdles. Airbus is buying the CSeries. Not Bombardier itself. And they are building the airplanes in the US. I'd like to see someone explain how regulation can be used to stop Airbus from making and selling airplanes in the US.

Since there are hundreds or even thousands of Airbus a/c presently flying in the land of protectionism, why would anyone want to prevent more Airbus a/c flying in the USA?

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:05 pm
by DL747400
I am all about supporting American companies, but I believe that Boeing got exactly what they deserve in this case. Let Airbus and Bombardier join forces to support a free market. Let Boeing go away the loser, licking their wounds and hopefully learning a lesson. DL should think twice before ordering any more Boeing aircraft. Long live the CSeries!

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:08 pm
by incitatus
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:09 pm
by Revelation
KarelXWB wrote:


Very nice illustration of the size difference, and the room that is available for the CS to grow into, if Airbus decides to swing the investment that way.

The ST article linked above says:

The CSeries comes in two models so far, the 110-seat and 130-seat versions, the larger of which could stretch to 150 seats.

Enders indicated that Airbus no longer expects to sell any more of its own smallest model of that size, the A319, which hasn’t won an order in five years.

And he said the next Airbus model up, the A320, is focused on 180 seats and higher.

So there's quite the opportunity for the CS for those customers who want something with its size/range.

ytz wrote:
3) It's blatantly obvious that this buys Airbus a lot of room. They need to upsize the 320 to ~200 seats in LCC config and the 321 to 250 seats in LCC configs. With the CS500 covering the 150-170 seat market, they now get to cover the 180-250 seat market with a substantially more optimized aircraft family. Only two models needed. No more having to try and optimize a wing for 150 seats in 2 class config.

We agree on the need. It's pretty easy for Airbus to justify giving the 100-150 seat market to CS. Enders just pointed out that they haven't sold any A319s in five years. It's a more difficult process IMHO for Airbus to justify giving the 150-170 market to the CS. I'm not saying they won't get to that point, but it raises a lot of issues related to product placement, corporate structure, labor agreements, etc.

bmacleod wrote:
Is it very likely that the US Dept of Commerce will soon back down from its 300% tariffs on Bombardier?

Or will it wait for an ITO ruling?

This doesn't change the basis for its ruling, but yes, both sides will let the process play out, IMHO.

From Boeing's point of view, if nothing else it forces the expense of creating and certifying Mobile as a CS FAL. Of course Airbus doesn't mind this extra cost, because BBD just gave them an entire new product line with no cash down.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:11 pm
by B747forever
incitatus wrote:
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.


Why would they be obliged to sell to the highest bidder? They could argue that Airbus offers them better opportunities and thus decline Boeing’s bid.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:13 pm
by WaywardMemphian
Here's a simple fact. The C Series program was worth about 2 to 2.5 Billion in US dollars. Boeing could have offered about that in cash to Bombardier to take on the C-Series for itself with the promise of keeping the Quebec line open for the CS100s and some CS300s while getting a lot of the investment back by shopping a new final assembly line location for CS300S and an CS500. I would have also worked with Bombardier about developing a C Series Mini Me that had lots of the same features of the C Series but in a 2x2 tube for the modern regional jet market that would fall in with scope clauses. It would have made Boeing a one stop shop from regional jets to the 777x. Talk about packaging and bundling syngeries that could create while picking up a new line for peanuts compared to new clean sheet. Boeing could have then ditched the 7Max and concentrated on Max8s and Max10s whill investing on the MOM clean sheet.

Major blunder on Boeing's part, just major. I hate it for them as an American but innovate like they want to with the MOM instead of playing the bully. For crying out loud, Airbus basically got it for free just for the promise that Bombardier be the major subcontractor for it. Boeing farts 3 billion away on things that never see the light of day, they could have got a new, innovative plane on the cheap.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:14 pm
by dodoma
incitatus wrote:
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.


There is no obligation at all. It's as if you were saying any company could be forced to be sold to the highest bidder even if they didn't want to.

This is what capitalism is about. Under normal circumstances anyone can choose their business partners.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:17 pm
by ytz
incitatus wrote:
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.


Fairly sure this announcement was a closed deal.

And Boeing has poor chances of buying up business in Canada after what they did with De Havilland. Boeing would face substantially more scrutiny than Airbus.

This is the second time Boeing has stabbed Canada in the back, as far as Canadians are concerned.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:18 pm
by incitatus
dodoma wrote:

This is what capitalism is about. Under normal circumstances anyone can choose their business partners.


Absolutely not true. Hostile takeovers.

And what would be the reason for BBD to reject a Boeing counter-offer besides bad blood? There is none.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:21 pm
by Arion640
incitatus wrote:
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.


Hasn't the deal gone through?

Boeing would be the complete laughing stock if they attempted a counter offer.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:23 pm
by ytz
incitatus wrote:
dodoma wrote:

This is what capitalism is about. Under normal circumstances anyone can choose their business partners.


Absolutely not true. Hostile takeovers.

And what would be the reason for BBD to reject a Boeing counter-offer besides bad blood? There is none.


This is Bombardier selling the CSeries. Not the company. You get the difference right?

As for why to reject a Counter-offer:

1) Because they closed on a deal with Airbus already.

2) Boeing would face substantial scrutiny by the Canadian and Quebec governments after their ITC complaints and history of behaviour with De Havilland.

The time to present a counter offer was months ago when Bombardier revealed they were in talks with Airbus. Too late, now.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:27 pm
by KarelXWB
Boeing’s Bombardier Fight Blows Up in Its Face

Boeing thought it was picking on a pipsqueak. Instead it has drawn its biggest rival to the fight.

Airbus EADSY -0.31% ’ surprise deal announced late Monday to take control of Bombardier’s CSeries jet program is a coup for the European aerospace giant. Boeing had just last month successfully got the Commerce Department to impose a 300% tariff on the new line of Bombardier jets.

Now Airbus will move some assembly of the CSeries to its Alabama plant, a neat workaround to Bombardier’s tariff problem.


So instead of killing off CSeries in the US, the aircraft will be haunting Boeing for a long time to come.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:27 pm
by dodoma
incitatus wrote:
dodoma wrote:

This is what capitalism is about. Under normal circumstances anyone can choose their business partners.


Absolutely not true. Hostile takeovers.

And what would be the reason for BBD to reject a Boeing counter-offer besides bad blood? There is none.


Yes but then you had to talk to the shareholders, not Bombardier themselves.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:32 pm
by tlecam
My take:
- I am glad that the C-Series will be built. I think it's a win for the flying public.
- I wish that the duopoly had some real competition - that would be better for the flying public.
- It is wild to think that Airbus and Bombardier will now own the 100-150 seat segment that Boeing and MD owned 30 years ago. What a turn of events.
- I was not supportive of Boeing's complaint to the DoC
- I don't believe that Boeing is shocked by this - these things are never surprises to the players. Boeing very well could have made the complaint to the DOC knowing full well that these talks were under way.
- I agree that Airbus will look (or has looked?) at revised strategy for the single aisle segment that allows them to maximize the investment and development in the C series and the 32x series and that likely includes stretches / wings at the large end of the segment for the 32x series.
- Boeing's strategy now is less clear - do they fast track the NSA? What's the impact to the 797 program?
- Congrats to Airbus, Bombardier and C-Series customers.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:32 pm
by Noshow
Looking back: Boeings supertough mode versus Bombardier must have been their first reaction to Airbus rumors.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:32 pm
by Chaostheory
This monty python scene is appropriate:

Image

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:36 pm
by tlecam
KarelXWB wrote:
Boeing’s Bombardier Fight Blows Up in Its Face

Boeing thought it was picking on a pipsqueak. Instead it has drawn its biggest rival to the fight.

Airbus EADSY -0.31% ’ surprise deal announced late Monday to take control of Bombardier’s CSeries jet program is a coup for the European aerospace giant. Boeing had just last month successfully got the Commerce Department to impose a 300% tariff on the new line of Bombardier jets.

Now Airbus will move some assembly of the CSeries to its Alabama plant, a neat workaround to Bombardier’s tariff problem.


So instead of killing off CSeries in the US, the aircraft will be haunting Boeing for a long time to come.


Good, frank assessment.

However, the WSJ would do well to invest in more copy editors:

"Boeing had just last month successfully got the Commerce Department to impose a 300% tariff on the new line of Bombardier jets." :old:

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:54 pm
by aircanadaa330
so does this mean Boeing is going to stop with those commercials telling us how Boeing Stands with Canada?

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:55 pm
by rheinwaldner
tlecam wrote:
- I don't believe that Boeing is shocked by this - these things are never surprises to the players. Boeing very well could have made the complaint to the DOC knowing full well that these talks were under way.

I had a chance to see an internal bulletin of a global financial institution about Bombardiers C-Series prospects. Dated October 16 (yesterday) it contains not the slightest hint of the Airbus deal!! Until yesterday even for industry insiders the focus was on "don't know", "still weighting options" "the Chinese should take it". So I am not sure whether Boeing anticipated this deal much earlier than all of us.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 1:58 pm
by fokkerf28
Well played Airbus/Bombardier......

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:13 pm
by BaconButty
rheinwaldner wrote:
I had a chance to see an internal bulletin of a global financial institution about Bombardiers C-Series prospects. Dated October 16 (yesterday) it contains not the slightest hint of the Airbus deal!! Until yesterday even for industry insiders the focus was on "don't know", "still weighting options" "the Chinese should take it". So I am not sure whether Boeing anticipated this deal much earlier than all of us.

Interesting. I imagine the fact that a significant amount of due diligence was done two years ago would have helped move things quickly.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:13 pm
by ytz
@rheinwaldner

I really don't get people who say Boeing anticipated this. Nothing about their reaction or their actions the last few months says they did.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:19 pm
by Noshow
Why would Boeing have attacked Bombardier the way Boeing did? A small competitor without money.
But Boeing used the big artillery against them. They must have known something.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:26 pm
by BaconButty
Noshow wrote:
Why would Boeing have attacked Bombardier the way Boeing did? A small competitor without money.
But Boeing used the big artillery against them. They must have known something.

Two potential reasons. Boeings bread-and-butter narrowbody is more reliant on it's smaller family members than Airbus, and therefore has more to lose from a competitor like the C-Series. Secondly, analysts have been speculating that China was going to invest in the program - and the raft of IP that come with it - killing a significant market would have made it less attractive. That may even be a factor in the revival of Airbus bid.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:28 pm
by PanAm788
Lots of smart people have given their opinion but nonetheless here's mine.

Winners: Airbus
- Airbus by far is the biggest winner here. They pick up a state of the art program that perfectly compliments their lineup essentially for free. BBD is the on the hook for the first couple hundred million dollars of additional investment and they have all the leverage in buying out the entire program a couple years down the road. Next to no risk, almost all the reward

Neutral/Winner: Trump Admin
- Basically this gives credence to the initial price dumping/free trade complaint and the resolution to the issue is additional investment into American manufacturing in Mobile. While it isn't a total victory as I'm sure they'd rather have it be a US company paying US corporate taxes, I think they'll take it.

Neutral: Delta
- Won some brownie points with Airbus/BBD for sticking with the program but will get their a/c late. Probably done with Boeing for awhile.

Neutral/loser: Boeing
- Despite all the comments in this thread this is not an apocalyptic result for Boeing. Their primary goal has always been to preserve the duopoly and that's exactly what they did. No current Boeing aircraft seriously competes with the CS100 or CS300 so there is really no immediate impact.

For now Airbus does not have a huge incentive to invest in the CS500 (Boeing's real concern) since it would eat into A320neo sales. Even if it would be a superior aircraft on paper, the capex needed to get CS500 production on par with the well oiled machine that is A320 production would be very very high. It is a possibility down the road though and Boeing definitely doesn't like being cornered in the market which they now are. They now have to spend billions develop an NSA when Airbus got one for free. Depending on the specs of the 797 ("752" or "763") I think a partnership with Embraer to develop a 3-2 seater aircraft is a real possibility.

Loser: BBD
- BBD is all but dead and even if Airbus turns the Cseries into a massive success, they can limit BBD's upside with their call option. At best BBD will remain a small biz jet manufacturer as the CRJ and Q offers slowly dry up. Even though I think there is a great business case for a CRJneo since all other regional jet manufacturers seem to be in scope clause limbo, it's basically a pipe dream at this point. At least BBD's engineers can hold their heads high with the Cseries.

Loser: Embraer
- Embraer must be super pissed that not only did the production costs of their biggest competitor get totally slashed overnight, but it also got taken over by one of the two largest aircraft manufacturers in the world and all the marketing and manufacturing expertise that comes with it. All of Embraer's advantages are now gone since the CSeries is likely a superior small mainline jet than the E2 and the smaller E2 jets can't be sold to US regionals due to scope issues. The two possible saving graces for Embraer is that Boeing will now likely be a more willing partner going forward and scope clauses changes are now more likely to be implemented now that the CRJneo possibility is dead: big for the E2-175.

Overall fascinating development. Cheers.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:29 pm
by StTim
Noshow wrote:
Why would Boeing have attacked Bombardier the way Boeing did? A small competitor without money.
But Boeing used the big artillery against them. They must have known something.



What they did would, if anything, have driven Bombardier to accept lesser terms from Airbus. This is hardly what they would have ever desired.

What all this says to me is that Boeing have played a fairly strong hand but been beaten on the last card that the supposedly weaker player had.

I look forward to reading the Harvard Business Review case studies on this in years to come. They will make interesting reading.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:32 pm
by Bimboslice
As a true Canadian I'm absolutely ecstatic, let the orders roll in!

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:32 pm
by rnav2dlrey
another winner: pratt/UTC.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:38 pm
by BaconButty
PanAm788 wrote:
Neutral/Winner: Trump Admin

I wonder what effect the upcoming Alabama senate election will have in this? The election should be nailed on GOP win, but these are strange times, and Roy Moore a strange guy. A republican president threatening job creation in the state by threatening to fight the deal? I think Trump could spin this both ways, he may be wiser to spin it as a win. But this is the Donald we're talking about.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:39 pm
by Super80Fan
Congrats to Bombardier and Airbus. I wish I had a camera to see Boeing's executives today. Innovation and the future win today, the bigots at Boeing lost.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:39 pm
by WIederling
incitatus wrote:
What is the chance Boeing can assemble a counter offer? Airbus is for sure getting a sweet deal. BBD has an obligation to sell to the highest bidder.


They did. going by precedence Boeing would expect money from The CAN government coming with that offer.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:40 pm
by ssteve
PanAm788 wrote:
For now Airbus does not have a huge incentive to invest in the CS500 (Boeing's real concern) since it would eat into A320neo sales. Even if it would be a superior aircraft on paper, the capex needed to get CS500 production on par with the well oiled machine that is A320 production would be very very high. It is a possibility down the road though and Boeing definitely doesn't like being cornered in the market which they now are. They now have to spend billions develop an NSA when Airbus got one for free. Depending on the specs of the 797 ("752" or "763") I think a partnership with Embraer to develop a 3-2 seater aircraft is a real possibility.

Loser: BBD
- BBD is all but dead and even if Airbus turns the Cseries into a massive success, they can limit BBD's upside with their call option. At best BBD will remain a small biz jet manufacturer as the CRJ and Q offers slowly dry up. Even though I think there is a great business case for a CRJneo since all other regional jet manufacturers seem to be in scope clause limbo, it's basically a pipe dream at this point. At least BBD's engineers can hold their heads high with the Cseries.


Does Airbus truly have a controlling stake? The management stays in Quebec, and the continuing funding will come from Quebec.

Certainly they can decline to assemble the putative CS500 in Mobile... but I'm not sure Airbus controls the strategy to the extent that you say here. There is also a put option.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:42 pm
by cledaybuck
Bimboslice wrote:
As a true Canadian I'm absolutely ecstatic, let the orders roll in!
Why? I am not sure this deal is all that great for Canada.

Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Posted: Tue Oct 17, 2017 2:49 pm
by rheinwaldner
Noshow wrote:
Why would Boeing have attacked Bombardier the way Boeing did? A small competitor without money.
But Boeing used the big artillery against them. They must have known something.

The fact that they used the big artillery proves that they knew nothing. Doing just nothing would have resulted in a better outcome for Boeing. It seems they went full steam on operation "extinction" and greatly misjudged the chances of a bailout by Airbus.

I mean, I ask you what objectives Boeing was able to materialize in their fight against BBD...

- Put C-Series out of business? Failed
- Suppress a CS500? Failed (many narrowbody aircraft designs did grow 50% to 100% in capacity over their lifespan, here we are talking about a ~15% increase)
- Clear the US market from the C-Series? Failed
- Deliver Superhornets to Canada? Failed

IMHO there is not a single reason why Boeing today still could say "we did super, we draw great benefit from the case we opened against BBD!!". Not a single benefit remains. I mean, not one. Have you thought about that? Or do you see one?