PPRuNe Forums - View Single Post - US Dept of Commerce slaps 220% tax on Bombardier c series
Old 6th Nov 2017, 02:24
  #269 (permalink)  
peekay4
 
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Well remember that Bombardier will only get 31% of any CSeries future profit, since the majority of the profits now will go to Airbus instead. It's tough to make the ROI when your business case has been cut to 1/3rd of its original value.

And even assuming the program "breaks even" in 2020, Airbus can simply buy out part or all of Bombardier's shares sometime in 2024 or 2025 depending on when the deal closes.

That means Bombardier potentially only has 4 or 5 years to recoup its investments in CSeries while only earning 31% profits during that time.

It's clear that the "sale" to Airbus was a de-risking move from Bombardier -- effectively dumping a troublesome asset for $1 -- aimed primarily to limit liability rather than to realize future profits.
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