Airbus and Spirit Aero have finalized a transaction to carve out A220, A320 and A350 related work after the Boeing re-acquisition of the company. The facilities include:
- Kinston, North Carolina, USA that builds A350 fuselage sections,Â
- St. Nazaire, France, that also builds A350 fuselage sections,Â
- Casablanca, Morocco that builds A220 and A321 components,Â
- Wichita, Kansas, USA that builds A220 pylons, Â
- Belfast, Northern Ireland that builds A220 wings, and potentially the A220 mid-fuselage,
- Prestwick, Scotland for A320 and A350 wing components
Spirit, which was losing money at these locations, is compensating Airbus with a payment of $439 million at closing to provide cash needed to maintain the viability of the operations in the short-term. Spirit was also a bottleneck for Airbus with component delays. The transaction complies with the acquisition agreement announced on July 1st, 2024, with the amount slightly smaller than earlier anticipated. The transaction is expected to close in the third quarter of 2025, at which time the transfer of operations will occur, subject to regulatory approvals. In the interim, Airbus is providing a $200 million interest-free line of credit to support their component production.
“For many years, Spirit’s collaboration with Airbus allowed us to deliver aerostructures for some of their most important aircraft programs,” said Irene Esteves, Spirit AeroSystems Executive Vice President and Chief Financial Officer. “Entering into this agreement is a significant milestone as we work towards the closing of the Boeing acquisition, to the benefit of Spirit, its stockholders and other stakeholders.”
The Belfast facility which produces the A220 mid-fuselage, is on the market by Spirit Aero, with a takeover by Airbus to occur if a suitable buyer cannot be found. British Unions, including Unite, appear to be focused on a single buyer for the former Short Brothers and Bombardier facility, a major employer in the region. The Belfast operation also produces components for Bombardier business jets, as well as Airbus. Some of the non-Airbus work could transfer to Boeing post acquisition. The union is petitioning the government to try and keep a single owner for the facility.
The Bottom Line
The Spirit facilities, like Spirit Aero itself, have been consistently losing money on their contracts with both major aircraft OEMs. Given the importance of Spirit operations, Boeing was forced to re-acquire the company as a key supplier and spin off the work being done for Airbus. That process is now complete, but the hard work now begins – reducing costs and improving the efficiency of those operations to at least bring them back to break-even. That could take some time, and cash flow, from both new owners in 2025 and 2026.
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