The acquisition of the C Series program by Airbus is a transaction that is subject to regulatory approvals around the world, given the global nature of the aviation industry. Brazil, home country to Bombardier’s major competitor, Embraer, has now approved the transaction. It’s CADE, Conselho Administrativo de Defesa Econômica, Brazil’s antitrust authority, has approved the transaction. For those of you who read Portuguese, a link of their report follows: Public version – CADE’s clearance decision. With Embraer and Boeing also in potential merger discussions, similar competitive issues face the Brazilian company, and we also expect any Boeing-Embraer arrangements would also be cleared.
Approvals in Canada, the EU and US are expected to be perfunctory, and it now appears that the Airbus C Series transaction will close earlier than previously anticipated, likely in advance of the Farnborough Air Show in July. The question now becomes whether the C Series will appear on the Airbus or the Bombardier ramp, and how quickly the transition of employees will occur. This will be a complex endeavor, but the transaction is moving forward with considerable speed. Expect to see the Airbus CS100 and CS300 later this year.
The need for a speedy transaction was outlined by Colin Bole at the Singapore Air Show. He indicated that while long-term sales prospects strengthened as a result of the Airbus deal, in the short term it is causing delays in order decisions, as airlines try to understand the long-run implications of the transaction. While several campaigns for C Series are active, decisions may be deferred until the Airbus transaction closes, and airlines understand more fully how service and support functions will be integrated into the Airbus networks.
The Bottom Line: Airbus and Bombardier both understand the need to complete this transaction quickly, and are currently ahead of schedule in that process. With no anticipated anti-trust regulatory roadblocks, the transaction should move forward quickly and clarify issues airlines are facing in their fleet decision process.