Canadian Bombardier sold a majority stake in its C Series passenger jet business to European Airbus for no cost which will manufacture the planes in its facility in the US.
Airbus and Bombardier expect the order book for the C Series to double from the 300 currently to 600 over 10 -15 years.
The move by Bombardier could be a way around the duties being imposed on the C Series planes in the US. The C Series headquarters will remain in the Montreal area but a second assembly line for the 100- to 150-seat plane will be set up at Airbus' facility in Mobil, Alabama, so the plane can be sold in the United States as a locally-made product, agencies reported.
U.S. rival Boeing called it a questionable deal by two state-subsidized competitors.
The move comes after the U.S. Commerce Department imposed harsh duties on Bombardier, charging the Canadian company is selling the C Series planes in America below cost and receiving government subsidies.
The Commerce department recently announced it would impose an 80 percent duty comes on top of duties of nearly 220 percent. The case has been a win for U.S.-based rival Boeing which brought the complaint.
"This looks like a questionable deal between two heavily state-subsidized competitors to skirt the recent findings of the U.S. government. Our position remains that everyone should play by the same rules for free and fair trade to work," Boeing spokeman Dan Curran said in a statement.
Airbus Chief Executive Office Tom Enders said an aircraft produced at an U.S. Airbus facility would not be subject to duties under the pending U.S. investigation.
Enders said the acquisition extends the company's product offering into the fast-growing 100-150 seat market sector. The current Airbus A320, a rival for the C Series, is for 180 passengers or more and Airbus hasn't sold an A320 in three years.
Enders said some airlines have been reluctant to purchase Bombardier's plane because of doubts the program would continue. It has been hurt by lackluster sales and was bailed out by governments in Quebec and Canada.
"Some customers will be convinced it will be a great product and it is here to stay," Enders said.