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2/14/2020 | 4 MINUTE READ

Airbus, Québec government become sole owners of A220 program

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Bombardier exits the commercial aircraft manufacturing business. Airbus owns 75% of the A220 program; Government of Québec owns 25%.

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Airbus A220 aircraft in flight; Bombardier divests A220 to Airbus

Bombardier exits the commercial aircraft manufacturing business. Source | Airbus

Airbus SE (Toulouse, France), the Government of Québec, Canada, and Bombardier Inc. (Montreal, Québec, Canada) on Feb. 13 announced that they have agreed upon a new ownership structure for the A220 aircraft program, whereby Bombardier has transferred its remaining shares in Airbus Canada Limited Partnership to Airbus and the Government of Québec. The transaction is effective immediately.

This agreement brings the shareholdings in Airbus Canada, responsible for the A220, to 75% for Airbus and 25% for the Government of Québec respectively. The government’s stake is redeemable by Airbus in 2026 — three years later than previously agreed to. As part of this transaction, Airbus, via its wholly owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier in Saint- Laurent, Québec.

The A220 was originally developed by Bombardier as the C Series. Airbus acquired majority ownership of the program in 2018, subsequently renaming the aircraft A220 and moving some production to Mobile, Ala., U.S. The A220 final assembly line continues to be located in Mirabel, Québec, Canada. The wings of the A220 are infused carbon fiber and manufactured by Bombardier at its facilities in Belfast, Northern Ireland. Bombadier is in the process of selling its Belfast operations to Spirit AeroSystems (Wichita, Kan., U.S.).

This new agreement with Bombardier, says Airbus, underlines the commitment of the company and the Government of Québec to the A220 program during this phase of continuous ramp-up and increasing customer demand. Since Airbus took majority ownership of the A220 program on July 1, 2018, total cumulative net orders for the aircraft have increased by 64% to 658 units at the end of January 2020.

“This agreement with Bombardier and the Government of Québec demonstrates our support and commitment to the A220 and Airbus in Canada. Furthermore it extends our trustful partnership with the Government of Québec. This is good news for our customers and employees as well as for the Québec and Canadian aerospace industry,” said Airbus CEO Guillaume Faury. “I would like to sincerely thank Bombardier for the strong collaboration during our partnership. We are committed to this fantastic aircraft program and we are aligned with the Government of Québec in our ambition to bring long-term visibility to the Québec and Canadian aerospace industry.”

“I am proud that our government was able to reach this agreement. We have succeeded in protecting paying jobs and the exceptional expertise developed in Québec, despite the major challenges we faced in this regard when we took office. We have consolidated the government’s position in the partnership, while respecting our commitment not to reinvest in the program. By opting to strengthen its presence here, Airbus has chosen to focus on our talents and our creativity. The decision of an industrial giant like Airbus to invest more in Québec will help attract other world-class prime contractors,” the Premier of Québec, François Legault, states.

“This agreement is excellent news for Québec and its aerospace industry. The A220 partnership is now well established and will continue to grow in Québec. The agreement will allow Bombardier to improve its financial situation and Airbus to increase its presence and footprint in Québec. It’s a win–win situation for both the private partners and the industry,” says Pierre Fitzgibbon, Minister of the Economy and Innovation.

With this transaction, Bombardier will receive a consideration of $591M from Airbus, net of adjustments, of which $531M was received at closing and $60M to be paid over the 2020-21 period. The agreement also provides for the cancellation of Bombardier warrants owned by Airbus, as well as releasing Bombardier of its future funding capital requirement to Airbus Canada.

“This transaction supports our efforts to address our capital structure and completes our strategic exit from commercial aerospace,” says Alain Bellemare, president and CEO Bombardier. “We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry. We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Québec and Canada. We are confident that the A220 program will enjoy a long and successful run under Airbus’ and the Government of Québec’s stewardship.”

As part of the agreement, Airbus has acquired the Airbus A220 and A330 work package production capability from Bombardier in Saint-Laurent, Québec. These production activities will be operated in the Saint Laurent site by Stelia Aéronautique Saint Laurent Inc., a newly created subsidiary of Stelia Aerospace, which is a 100% Airbus subsidiary.

Stelia Aéronautique Saint-Laurent will continue the production of the A220 cockpit and aft fuselage production, as well as A330 work packages, for a transition period of approximately three years at the Saint-Laurent facility. A220 work packages will then be transferred to the Stelia Aerospace site in Mirabel to optimize the logistical flow to the A220 final assembly line, also located in Mirabel. Airbus plans to offer all current Bombardier employees working on the A220 and A330 work packages at Saint-Laurent opportunities around the A220 program’s ramp-up, ensuring know-how retention as well as business continuity and growth in Québec.

At the end of January 2020, 107 A220 aircraft were flying with seven customers on four continents. Airbus delivered 48 A220s in 2019.

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