Bombardier Inc., burning cash while developing the struggling CSeries jetliner, held talks on a potential business collaboration with Airbus Group SE before the two planemakers abandoned the effort.
“Such discussions are no longer being pursued,” Airbus said Tuesday in a statement. Bombardier separately confirmed that account, while repeating previous comments that it will “continue to explore initiatives such as a potential participation in industry consolidation.”
The statements followed a Reuters report that Bombardier had approached its larger rival to sell a stake in the CSeries program. The model, intended to crack the Airbus-Boeing Co. duopoly on narrow-body jets, is more than $2 billion over budget and running two years late as it heads toward a 2016 commercial debut. Bombardier also plans an initial public offering for its rail unit this year to boost liquidity.
Neither company’s statement mentioned the CSeries, the biggest jet ever offered by Montreal-based Bombardier. The plane has been a focus of investor concern because of the drain on cash and the scant interest shown by airlines.
“To make this a commercially viable program, you need somebody with deep pockets to be on your team,” Nicholas Heymann, an analyst at William Blair & Co., said in a telephone interview from New York.
Bombardier’s widely traded Class B shares jumped 15 percent to C$1.77 at the close in Toronto, the biggest advance since Sept. 10, after the Reuters report. Even with that rally, the stock is down 57 percent this year.
With Bombardier already having acknowledged the need to drum up more cash, the confirmation of possible collaboration with Toulouse, France-based Airbus may add to doubts about the CSeries, the model the company has hailed as a pillar of future revenue growth.
Bombardier, a pioneer in the regional-jet industry, is trying to succeed in a narrow-body niche where other planemakers have failed. The least-expensive CSeries seats 108 people, fewer than in the smallest offerings from Boeing and Airbus.
Bombardier has secured few CSeries orders from top-tier carriers and lessors among its 243 firm sales, shy of a 300-plane goal by the time the plane begins commercial flights. Bombardier last signed a deal for the CSeries in September 2014, when a unit of Australia’s Macquarie Group Ltd. agreed to buy 40 of the jets.
The company had $3.1 billion of cash and cash equivalents and about $9 billion of long-term debt at the end of June.