MONTREAL (AP) — Bombardier Inc.said Thursday it is completing its exit from commercial aviation by selling its remaining stake in the A220 jetliner for nearly $600 million.
Bombardier said it agreed with Airbus SE and the Quebec government to transfer its shares to Airbus and the province, its latest move to emerge from more than $9 billion in debt.
The A220, with 100 to 150 passenger seats, used to be known as the Canadian Bombardier C-Series, but Airbus bought the program as part of a joint venture after Boeing pushed a trade war over it. The C-Series program drove Bombardier to the brink of bankruptcy before it was bailed out by the Quebec government.
Montreal-based Bombardier had once dreamed of taking on Airbus and Boeing by capturing half the global market for 100-to 149-seat planes. It had marketed the plane as being 20 percent more fuel-efficient than the comparable Airbus A320 and Boeing 737.
The latest deal boosts Airbus’s share in the A220 program to 75 percent from just over 50 percent, while Quebec’s stake rises to 25 percent from 16 percent.
In exchange, the agreement hands Bombardier $591 million, including $531 million immediately.
The announcement came as Bombardier reported a loss of $1.61 billion for 2019. Rumors continue to swirl about the potential sale of one of its two main divisions later this year.
“We are looking at our options. As you can understand, it’s very sensitive,” chief executive Alain Bellemare said on a conference call with investors Thursday.
“The reason why we’re looking at strategic options is to accelerate deleveraging of the business,” said Bellemare, who took the helm in 2015. “The strategy was always to exit commercial aircraft.”
Under the new deal, work on the A220 and A330 single-aisle planes will be transferred to Airbus through the Europe-based aircraft giant’s subsidiary Stelia Aerospace, securing 360 jobs in Quebec, Bombardier said.
David Chartrand, Quebec coordinator for the International Association of Machinists and Aerospace Workers, deemed the deal “the best scenario under the circumstances.”
“Bombardier’s complete withdrawal from the construction of commercial aircraft represents the end of an era,” he said in a statement.
Bombardier said that in 2016 — the year before it sold a controlling stake to Airbus — its commercial aerospace segment lost about $400 million and was consuming roughly $1 billion in cash.
Three major rating agencies have voiced concerns this year over the finances of the company.