PREMIUM 2018.13 Airbus and the Montréal Cluster – Opportunity and Risks

With Airbus and Bombardier nearing an agreement for their joint venture for the CSeries, the new company, which we will call ABC (Airbus Bombardier Canada), will be taking over supply chain relationships for the CSeries, including the procurement relationships with a number of small and medium-sized enterprises in Quebec.  We’ve highlighted a number of them in our Down the Supply Chain series here

, here, and here, and will continue to feature them throughout the year.

As the world’s third-largest cluster of aerospace manufacturing, the Montréal aerospace cluster is a driver of the Quebec economy.  Today, Montréal has four major aerospace OEMs, Bombardier, Pratt & Whitney Canada, Bell Helicopters, and CAE.  Airbus will add a fifth leg, presenting new opportunities for suppliers for potential growth.  Many of the suppliers, including small and medium-sized suppliers, are enthusiastic about the opportunity to develop a relationship with Airbus that could expand to other products, in addition to higher projected sales for CSeries.

Airbus is likely to re-launch the CSeries and take the opportunity to rename the product to bring it into the Airbus product family, much like Boeing renamed the MD-95 to the 717.  The launch of the tentatively named (by us) A210 and A230 could provide a new impetus to sales and increased volume to the supply chain.  Of course, the potential to qualify as a supplier for other Airbus products, including A320, A330, A350, A380, Airbus Helicopters, and the A400M is attractive to the Montréal cluster, which has the linguistic advantage of being francophone.