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Bombardier exploring options for aerospace businesses: Reuters

Canadian train-and-plane maker Bombardier Inc is exploring options for its aerospace businesses, including a sale of some operations, Bloomberg reported on Sunday.

The company is considering disposal of assets including its Q400 turboprop and CRJ regional-jet unit, the report said, citing people familiar with the matter. Bombardier is also looking at partnerships with other aerospace companies, Bloomberg reported. According to the report, Europe’s Airbus SE is among the prospective buyers.

Bombardier declined to comment on the report. Airbus said it did not comment on market rumors.

Bombardier, which is now in the middle of a five-year turnaround plan after considering bankruptcy in 2015, has previously weighed strategic options for parts of its aerospace division. In 2015, it held talks with Airbus for a majority stake in the company’s CSeries jet but those discussions were called off, Reuters reported in October 2015.

Aviation industry sources Reuters spoke with on Sunday, however, cast doubt over Airbus’ interest in the Q400. The European plane-maker is a stakeholder in ATR, which already controls 75 percent of the turboprop market and such a deal would likely raise anti-trust concerns.

Bombardier’s aerospace division, nevertheless, has been under pressure because of lacklustre demand for its turboprops and regional jets, and more recently because of a trade dispute with U.S. plane-maker Boeing Co over the CSeries narrow-body jets.

Earlier this month, the U.S. Commerce Department notched up proposed trade duties on the 110 to 130 seat CSeries jet to nearly 300 percent, following Boeing’s complaint that the Canadian company received illegal subsidies and sold the planes to American carriers for “absurdly low” prices.

While Bombardier is now in a stronger financial position than it was in 2015, the company has held informal talks in recent months with potential Chinese companies with the goal of delivering an investment in the CSeries jets and improving the aircraft’s sales through better access to the fast-growing Chinese aviation market, two sources familiar with the matter told Reuters earlier this fall.

But those talks have been complicated, among other reasons, by the agendas of various stakeholders, including the Québec government, which owns a 49 percent stake in the plane program.

“There are a lot of conditions that have to be met for these things to work,” said one of the sources. “Logic doesn’t win always.”

The sources declined to be identified because the talks are private.

(Reporting by Kanishka Singh, Allison Lampert and Tim Hepher; Writing by Denny Thomas; Editing by Andrew Hay and Mary Milliken)

Photo courtesy of Reuters/Edgar Su