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June 17, 2024
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Airbus will be the white knight to rescue the C Series through a joint venture with Bombardier, announced earlier today.  The agreement will include a second assembly line in Mobile, Alabama to produce C Series aircraft for the US market.  As additional details are released, we will provide more information as events ensue.  But there are several key implications that are quite clear:

The production of the C Series in the  US will effectively kill Boeing’s trade complaint against Bombardier, and enable Delta to take delivery of its 75 CS100 models on order from the Mobile assembly line.

The C Series also provides Airbus with an all-new narrow-body platform that has the potential to dominate the 100-150 seat market, as Boeing lacks a viable competing aircraft in this segment.  This will increase Airbus dominance in narrow-body aircraft over Boeing.

Embraer will be facing a much more formidable competitor in the combination with Airbus than Bombardier itself and may be forced to move closer to Boeing with its E2 product line, which would fill a product line gap for Boeing.  Could another joint venture be forthcoming as a result of this deal?

China has lost an opportunity to rapidly acquire a technologically advanced platform and the opportunity to spur its aerospace expertise.  The C Series would also have been complimentary to the C919 program at COMAC, are could have provided them an instant acquisition of advanced capabilities.

As this story continues to unfold, we will look behind the headlines to discuss the implications of the transaction and likely impacts on competition, the supply chain, and other industry players.

The Bottom Line:  The joint venture between Airbus and Bombardier for the C Series changes the competitive dynamics for narrow-body aircraft, and will make a 737 replacement even more critical for Boeing.  The dynamics and timing of new aircraft programs in Seattle may need to be re-aligned to the new competitive realities.

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