The A220 needs money and Quebec puts around 380 million in the program

Put back around 380 million (300 million US) in the A220 to remain a shareholder for four more years: this is the bet of the Legault government in order to have a “better chance” of recovering the “initial investment” of the State in the ex-Bombardier C Series – which has already received 1.3 billion from the Quebec state.

Julien Arsenault
The Press

Still in deficit, the program needs 1.5 billion (1.2 billion US) of additional capital to accelerate its current rate of production – the element on which the aircraft manufacturer is betting to reduce the costs of the program. Airbus will inject nearly 1.1 billion (900 million US). This money should not be used to finance other projects, such as a possible stretched version of the plane.

Fanned over the past few weeks, the details were confirmed in Montreal by the two partners of the Airbus Canada Limited Partnership (SCAC), Friday, at a press conference. Prime Minister François Legault and representatives of the European giant, including its CEO Guillaume Faury (by videoconference) and Airbus Canada President and CEO Benoît Schultz, were present.

“We obtain longer-term commitments and we have a better chance of recovering our initial investment,” argued Mr. Legault. It will make it possible to protect 2,500 jobs in Mirabel. »

In control of the program since 2018 without having had to pay a penny, Airbus is a shareholder of the A220 – whose profitability is not expected before 2025 – up to 75%. By injecting new sums after a call for capital from its partner, Quebec avoids dilution and retains its 25% stake.

The Quebec State will also remain a shareholder of the A220 at least until 2030, that is to say four additional years. If the program becomes profitable, its value should go up. By postponing the deadline at which Airbus can buy Quebec, the Legault government is opting that its participation will increase in value, which will allow it to recover some of its marbles.

Quebec says that this new support is accompanied by commitments from the European giant in terms of employment and production. New jobs should be created. Last November, Mr. Schultz had already reported that the workforce of the multinational in Mirabel would swell by about 500 people over the “coming years”.

“The global aeronautics industry has been showing signs of recovery for several months,” said the big boss of Airbus. We strongly believe in the future of the A220. »

Value “null” for now

However, there are no guarantees for taxpayers. According to the most recent Economic Development Fund (EDF) report, the “fair value” of the government’s investment in the old C Series was “nil” as of March 31, 2021. However, the last year has been better for the A220, which has started to accumulate orders again. The portrait could change.

After the turbulence of the pandemic, which was accompanied by a dearth of new orders, the A220 landed 64 firm contracts in 2021. Taking into account letters of intent and commitments, the total climbs to around 100 devices.

The production rate should soon increase to six devices per month: four in Mirabel and two in Mobile, Alabama. The rate should gradually be established at 14 aircraft per month. There are 497 aircraft to be delivered in the order book, representing several years of production.