Airbus and Investissement Quebec (IQ) will invest a combined $1.2 billion in the A220 program, they have announced on February 4. This confirms earlier reports about a capital increase, which will be used to accelerate production of the smallest member of the Airbus family. Airbus A220 benefits from $1.2 billion investment.
Airbus will invest $900 million while Investissement Quebec has committed to $300 million in Airbus Canada Limited Partnership, the joint company in which the airframer has a 75 percent share and the investment company of the Quebec government the remaining 25 percent. IQ’s investment is higher than was anticipated. As reported in January by AirInsight, IQ was expected to invest $200 million.
“Today’s announcement is important to our aerospace industry. We will invest $300 million in Airbus’ A220 program. This will protect 2.500 well-paying jobs in Mirabel”, said Francois Legault, prime minister of Quebec, in a media statement. “Airbus is a good partner for Quebec. The company continued to rely on Quebec engineering to build one of the most promising aircraft in the world.”
Quebec gets four more years to recoup its investment
With its own investment, Airbus is committed to the long-term future of the A220 and the secure the position of 2.500 jobs at Airbus Canada and associated partners, ensuring economic spin-offs for the Quebec region. To give IQ more time to recoup its investment, it has been agreed that it will four more years until 2030 before its share can be redeemed by Airbus. When Airbus took a majority share in the program from Bombardier, the maturity date was set for 2023. This was later amended to 2026 and now until 2030.
“We get longer-term commitments and we have a better chance of recovering our initial investment, including the amount of $1 billion. We are proud to partner with Airbus, which now plays a key role in our aerospace ecosystem, and we hope it will be here for a long time”, said Pierre Fitzgibbon, Minister of Economic Affairs and Innovation for Quebec. The Economic Development Board (FDE) said in a March 2020 report that Quebec’s investment of a combined $1.4 billion (the original investment of $117 million in 2008 plus $1.3 billion in 2016) had no longer any value after a $745 million write-off and $292 million impairment charge.
Airbus has increased the production rate of the A220 to six per month this year for both the Mirabel site in Montreal and the Mobile (Alabama) plant in the US. It plans to ramp up the rate to fourteen per month in 2025. Tier-1 supplier Spirit AeroSystems said earlier this week that at this higher rate, the program will become breakeven. Since taking over in 2018, Airbus has worked hard to improve efficiency and reduce costs. One of the steps is the opening of pre-assembly lines, where fuselage sections are outfitted before they go onto the final assembly line. This will reduce the time per frame in final assembly and allow for higher rates.
“We strongly believe in the future of the A220, a technologically advanced aircraft, which is already recognized by our customers for its performance and reduced carbon footprint”, said Airbus CEO Guillaume Faury. “As previously announced, as the majority shareholder of the program, Airbus continues to invest in the partnership and in Quebec to accelerate the monthly production rate of the A220 aircraft to ensure the anticipated success of the program in the middle of the decade.”
Active as journalist since 1987, starting with regional newspaper Zwolse Courant. Grand Prix reporter in 1997 at Dutch monthly Formule 1, general reporter Lelystad/Flevoland at De Stentor/Dagblad Flevoland, from 2002 until June 2021 radio/tv reporter/presentor with Omroep Flevoland.
Since mid-2016 freelance aviation journalist, since June 2021 fully dedicated to aviation. Reporter/editor AirInsight since December 2018. Contributor to Airliner World, Piloot & Vliegtuig. Twitter: @rschuur_aero.