Airbus Takes $500M Hit as A220 Ramp Slows |

Airbus is optimistic about winning strong A220 sales from ongoing campaigns, CEO Guillaume Faury said on Thursday. He must be desperate, because the program’s business case is far from positive, according to Airbus's financial statements. The airframer recognised a $500 million impairment related to the program’s intangible assets. “The impairment was primarily triggered by significant updates to the program’s long-term business case. The recoverable amount of the tested assets was determined using a value-in-use methodology. Cash flow projections used for the impairment testing are mainly impacted by the acquisition of certain Spirit Aerosystems businesses with a revision on the projected costs of production and the A220 updated production rate trajectory”, it says in the financial statements. Spirit AeroSystems The primary reason for updating the business case is the acquisition of various segments of Spirit AeroSystems, which was completed in December. These include wing production and mid-fuselage assembly in Belfast (Ireland), engine pylons in Wichita (USA), and components in Casablanca (Morocco). In the earnings call, Faury said that the integration of the wing work package will take time. In the financial statements, Airbus says: “The A220 production ramp-up is ongoing and still paced by the integration of Spirit AeroSystems work packages and the balance between supply and demand. As the Company continues to make tactical adjustments on this ramp-up trajectory, it is now targeting a rate of 13 aircraft a month for the A220 program in 2028.” Not mentioned here is the uncertainty around PW1500G deliveries, but they must also be factored in now that Airbus and Pratt & Whitney disagree on contractual numbers. Remember that the production rate was supposed to hit 14/month this year, but Airbus revised this to 12/month last October. It effectively gives you some 18 extra months to increase the rate to 13/month in 2028 at the two production sites in Mirabel (Canada) and Mobile (USA). An analysis of Bank of America guides 110 deliveries this year, stabilising at 115 for each of the three years from 2027. ACLP There is more sombre news about the A220, especially for the Canadian shareholder Investissement Quebec (IQ). It holds a 25 percent stake in Airbus Canada Limited Partnership (ACLP), established in 2018 when Airbus took over the CSeries program from Bombardier. Since Bombardier exited the program in 2020, ACLP is a 75/25 joint venture. Since 2016, the Canadians have invested some $2.1 billion. In 2022, Airbus invested $900 million and IQ $300 million, which, according to Canadian media reports, eventually amounted to $413 million. What’s left of this if IQ were to decide to sell its stake right now? Not much. The financial statements say: “As of 31 December 2025, the fair value of the written put options on non-controlling interests (“NCI puts”) relating to ACLP amounts to €0 million (2024: € 18 million).” That’s zero. While worrying at first sight, IQ has still some time to recoup its investments. Its 25 percent stake in ACLP is redeemable only in 2035, having been extended by five years as part of the 2024 agreement with Airbus. Only when Airbus really buys back the Canadian shares will the value be determined. At the same time, the government of Quebec seriously considered reducing the book value to zero as early as last December, Le Journal du Quebec reported. Orders The only way to overcome the concerns is for the A220 to win some good orders. Last year, it won 49 gross orders from LOT Polish Airlines (40) and an undisclosed customer (9), but five cancellations resulted in 44 net orders. The backlog for the smallest A220-100 stands at 44 aircraft out of 118 sales. For the larger -300, there are still 420 aircraft to be delivered from 831 sold. At the current production rate of some eight per month, that keeps the line busy for just five years. Faury must be hoping that Tony Fernandes puts pen to paper soon and commits to what could be an order for up to 100 A220s for AirAsia. The eagerly anticipated stretched A220-500 doesn’t seem that imminent after all. While new Commercial Aircraft CEO Lars Wagner indicated at the Singapore Airshow that the variant could be launched this year, Faury downplayed this on Thursday. Airbus has enough on its plate right now to launch the -500 anytime soon, though it is a matter of “when” rather than “if”. We have heard that a few times before from Christian Scherer, Wagner’s predecessor.

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