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An Airbus A320neo and Bombardier C Series were on display for the Airbus and Bombardier announcement near Toulouse, France.

REGIS DUVIGNAU/REUTERS

Alain Bellemare stood at a podium in Mirabel, Que., in June, 2016, and boldly told Bombardier Inc. employees that, with the plane maker's C Series airliner in production, the company "will be able to compete with anybody in the world. Boeing, Airbus, Embraer and whoever else wants to come at us, we'll be able to fight."

Fifteen months later, that looks like wishful thinking by the company's chief executive officer. Bombardier has just handed control of the C Series program – its biggest research and development effort to date, a nearly two-decades-long push that cost $6-billion (U.S.) to complete – to Airbus SE for no cash consideration. In exchange, Airbus is pledging to bring its massive procurement, logistics and sales power to help Bombardier sell thousands of C Series planes and maintain thousands of aerospace jobs in Canada.

In a rich bit of irony, the company that tried hardest to kill the C Series has come to its rescue. But in saving the C Series, Airbus has also killed the ambitions of the Canadian manufacturer to challenge the Airbus-Boeing duopoly in the global market for single-aisle airliners. Bombardier's dream to play at the high-stakes table is dead. And that raises questions about its future in commercial plane-making and whether the whole company isn't destined to break apart in the years to come.

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"They've just sold the future and they find themselves with the present," said Louis Hébert, a professor of corporate strategy at Montreal's HEC business school. "When I saw this deal, I asked myself: Is this the start of a progressive dismantling of Bombardier or a first step towards the eventual sale of the company? Suddenly, those two scenarios become more plausible than six months ago."

Not surprisingly, Mr. Bellemare offered an entirely different spin on the future of the company. After an event with Airbus chief executive Tom Enders at Montreal's Board of Trade on Friday, the Bombardier boss framed the Airbus agreement as the anchor for a much broader revenue opportunity for the C Series and Bombardier's other aerospace programs.

"We just strengthened the business in a major way by bringing such a high-quality, world-class partner in," Mr. Bellemare told The Globe and Mail, adding Airbus is bringing in huge value. "They want to do more with us. … This will open up opportunities for our people. It's not going to shut it down."

Bombardier on Monday shocked the business world with a deal that means the company will cede a 50.01-per-cent stake of the C Series program to Airbus while it becomes a minority shareholder with Quebec. Airbus has the option to buy its partners out starting in six years time and analysts expect that to happen, despite Mr. Enders's insistence that Airbus has "no intention" to do so.

The partners will launch a new C Series line at Airbus's existing assembly plant in Mobile, Ala., to serve the U.S. market in a bid to avoid paying import duties imposed on the planes."I am glad we found a really strong business partner like Airbus to push the C Series into second gear," said Charles Bombardier, an inventor and member of the founding family that controls the parent company through a block of super-voting shares. "What we are looking for is generating shareholder value over the long term and reducing risk. In my opinion, the Airbus deal goes in that direction."

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Bombardier's C Series dream began nearly two decades ago when it was facing diminishing prospects for its CRJ regional jets. The company began thinking about its next project to drive revenue for its commercial aerospace unit. And it decided to develop a 100- to 150-seat airliner from scratch to serve what it believed was an unexploited market.

From the start, there were serious doubts about the company's ability to pull off the project. And Bombardier did little to silence the critics, twice suspending its plans before reviving them in 2007 and securing launch aid from Canada and Britain. The government of Quebec stepped in with a $1-billion lifeline at a critical time, allowing Bombardier to see the project through.

The C Series made its commercial debut with Deutsche Lufthansa AG subsidiary Swiss airlines last year, about two years late to market and $2-billion over budget. Reports from customers flying the plane are glowing, with AirBaltic describing it as a high-tech workhorse that burns 21 per cent less fuel than the aging Boeing 737-300 planes they are replacing.

But the C Series technology wasn't enough to win new customers. Many had doubts that Bombardier, saddled with a nearly $9-billion debt, would be around in the long term to support the aircraft. Publicly, Boeing and Airbus took every opportunity to ridicule the plane as a serious market entrant and Airbus was first to offer a new engine for its smallest aircraft in response.

Speaking at Airbus' annual press conference in January, 2016, John Leahy, the company's chief salesman, called the C Series "a nice little plane," an "orphan" that was probably forever doomed to be a poor seller because of its limited appeal as a two-model offering. Bombardier offers two C Series options, the 100-to-135 seat CS100 and the CS300, which seats up to 160 in a dense configuration.

Now, the "orphan" will be an Airbus product. And the tone from the Amsterdam-based plane maker about it has shifted. Mr. Enders said the C Series has a cockpit and avionics that are unmatched in the industry and that Airbus intends to see whether it can use the technology on its own single-aisle aircraft. He predicted Airbus and Bombardier would together sell thousands of C Series planes in the years ahead.

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Where does that leave Bombardier?

The company today is essentially a collection of different industrial businesses, including train equipment manufacturer Bombardier Transportation, luxury business jet maker Bombardier Business Aircraft and aerostructures, a $1.7-billion division that supplies engine nacelles and other plane parts for Bombardier and other clients. As for Bombardier's commercial aircraft unit, its biggest asset is the C Series, which has eclipsed the CRJ regional jet and Q400 turboprop lines in importance.

"The whole strategy was 'we need to build the next airplane.' But now, the next airplane is built and there's nothing left to build," said Chris Murray, an analyst at AltaCorp Capital in Toronto. "We're going to see, I believe, over time, an unwind of the corporation."

For Bombardier's board, it will be an exercise in portfolio management over the coming years, Mr. Murray said. In other words, deciding what businesses make the best sense for the company to own, sell or buy. He noted Bombardier started as a snowmobile maker and could make a surprise shift in direction again, although its path suggests otherwise.

"Maybe [they decide] the best thing we can do is we become a financial company, just basically a big holdco," Mr. Murray said. "Maybe we're just a Canadian version of something like United Technologies. I think that's kind of where we're heading."

Bombardier continues to explore strategic opportunities for its train business. It has already sold a 30-per-cent stake in the unit to the Caisse de dépôt et placement du Québec and last month made a proposal to merge it with Germany's Siemens AG. Faced with political pressure for a pan-European solution, Siemens chose France's Alstom SA instead.

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A senior banking source said the company is shopping the CRJ and turboprop lines. Both were once major revenue generators but have dropped off in recent years against tougher competition. Private jets remain a bright spot for Bombardier's profitability, however, and could become an even more important piece of its corporate strategy if the market for luxury jets rebounds as expected next year.

"There's going to be a realignment at the company," said Mehran Ebrahimi, an aerospace specialist at the University of Quebec at Montreal. "Bombardier conquered the world with their regional jets and they thought they could do the same with the C Series. But in this story, David did not slay Goliath."

The question of whether Bombardier will be able to retain all the engineers and designers that created the C Series now that it has ceded control of the project is a key one. Mr. Bellemare has evoked this repeatedly as a risk to the company, noting that after the Global 7000 private jet comes to market next year, Bombardier won't have any new plane programs in its development pipeline.

Will those people bolt out the door or stay with Bombardier as new opportunities open up with Airbus? The European partner could help develop a larger C Series variant. Others have even evoked the possibility of Bombardier becoming a key supplier to Airbus on military contracts in the future.

In the end, Bombardier's desire to become a major force in single-aisle plane making has been wrestled away by an incumbent. What it gains in added value from the C Series program with Airbus's arrival it also loses in independence.

"We went to war with water guns," Pierre-Yves McSween, a Quebec business commentator, told Montreal radio station 98.5 FM this week. "They made Quebeckers dream, they told us to invest, they said we had world-beating engineering that would sustain 40,000 jobs. Now we're working for a foreign company on a technology we developed."

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