April 25, 2018 / 5:18 PM / in 2 months

Airbus, Bombardier hope to close CSeries deal by late May: sources

MONTREAL (Reuters) - Airbus SE (AIR.PA) and Bombardier (BBDb.TO) aim to close a deal giving the European planemaker a majority stake in the Canadian company’s CSeries jetliner program by the end of May, ahead of an initial timetable, two people familiar with the matter told Reuters.

FILE PHOTO: An Airbus A320neo aircraft and a Bombardier CSeries aircraft are pictured during a news conference to announce a partnership between Airbus and Bombardier on the C Series aircraft programme, in Colomiers near Toulouse, France, October 17, 2017. REUTERS/Regis Duvignau/File Photo

An early closure of the deal would accelerate orders and efforts to reduce costs, the people said this week. A third source said the finalization is now “very close.” The deal was originally expected to close in late 2018, and then mid-year, pending regulatory approval.

The companies have almost completed the process of seeking clearances which must span multiple jurisdictions, one of the sources added.

Airbus is also considering whether to rebrand the CSeries planes as the A200, a fourth source said, confirming an earlier report by Bloomberg.

“This would be a way to leverage the Airbus brand,” the source said.

The rebranding of the 110-and-130-seat CSeries planes as part of the Airbus family would be a response to critics, such as a former Airbus executive who once referred to the two jets as “orphan aircraft.”

All of the sources spoke on condition of anonymity because the talks are private.

An Airbus spokesman cited comments by Chief Executive Tom Enders who said this month the deal would close by mid-year.

Bombardier said it had no updates to share.

In October last year, Airbus agreed to buy a majority stake in Bombardier’s CSeries jetliner program, which has performed well but struggled to cut costs and win new orders.

Completion of the venture could kick-start orders from airlines sitting on the sidelines at a time of industry consolidation.

Bombardier said in February there had been a “bit of a pause” in orders for its narrowbody jets as airlines waited for the company to complete the partnership deal.

Separate talks aimed at a tie-up between planemakers Boeing Co (BA.N) and Embraer SA (EMBR3.SA) are also said to be advancing.

U.S. carrier JetBlue Airways Corp (JBLU.O) has said the talks between the two sets of planemakers prompted it to delay a decision whether to replace its fleet of about 60, 100-seater E-190 jets, in a campaign that pits the CSeries against its Brazilian rival’s latest model, the E190-E2.

“The timing of the review moved a little based on what was happening out in the market with the OEMs,” JetBlue Chief Financial Officer Steve Priest told Reuters this month, referring to planemakers. “We’ve been taking that into consideration as we’re going forward.”

Reporting by Allison Lampert in Montreal and Alana Wise in New York; Editing by Susan Thomas and Matthew Lewis

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