Bombardier lines up US$700 million for its C Series aircraft program

Bombardier Inc has lined up US$700 million in commitments from the Canadian, British and Quebec governments in support of its proposed $3.1 billion C Series passenger jet program. Canada’s largest aerospace firm is also seeking an equal amount from suppliers before greenlighting the project, which will be the largest jet ever built in Canada.

Development of the aircraft is estimated at $2.1 billion, while engine development is projected to cost $1 billion (R$, December 7/04).

The federal government commitment of $262.5 million is being made through a new program for large-scale aerospace and automotive R&D projects that has yet to be announced. The Quebec government’s share is $87.5 million. The largest single commitment ($340 million) comes from the British government through its Launch Investment and Selective Financial Assistance programs. If the project is given the go-ahead, the repayable R&D funding will ensure that Bombardier Aerospace Belfast is a key supplier to the parent company.

The government assistance packages were chosen by Bombardier from a short list of four jurisdictions that included New Mexico and were whittled down from an initial list of 12. Montreal has been chosen as the location for final assembly of the aircraft while Belfast was selected for development of the wings, portions of the engine and tail assembly.

Federal assistance will go to support pre-competitive R&D of technologies required for the C Series aircraft, although neither the government nor Bombardier will provide specifics. The funding was accounted for in the latest federal Budget, which has yet to receive final approval due to the volatile political situation in Ottawa.

Industry Canada is tight lipped about the Bombardier assistance and the source of the funding. A departmental spokesperson would only say that the funding is conditionally repayable and that the terms and conditions are closely modelled on those used by TPC.

(All amounts in US dollars).

R$