“Considering that Airbus is getting very good sales from the A220, what about the money invested by the Quebec government in this project? » – Gérald Mercier
Taxpayers have so far injected 1.7 billion into this plane designed by Bombardier and which is controlled by the European multinational. Since 2020, the year in which the aircraft manufacturer left the picture due to its financial setbacks, Airbus (75%) and Quebec (25%) are the two shareholders of the A220.
The Quebec State’s investment in the A220 was worth 380 million (US 300 million) as of March 31, explains the Ministry of the Economy, Innovation and Energy. This corresponds to the value of the most recent investment made by the Legault government in February 2022 with Airbus, which handed over 1.1 billion.
We will have to wait until the end of the decade before knowing whether or not the Quebec state will truly be able to recover its marbles. The answer to this question essentially depends on the aircraft manufacturer’s ability to bring the A220 out of the red. Despite a harvest of 142 firm orders in 2023 – a record – and some 600 aircraft to be delivered in the order book, this program is still losing money.
To reverse this trend, the assembly lines in Mirabel, in the Laurentians, and Mobile, in Alabama, must be able to produce 14 planes monthly, or 168 per year, says Airbus. The multinational believes it will be able to reach this cruising speed in 2026. This target is very ambitious. To achieve it, the production rate must essentially double in two years.
“It will be very difficult,” explained analyst Richard Aboulafia, general manager of the American firm AeroDynamics, in a telephone interview with The Press last month, on the occasion of the publication of the results of Airbus orders and deliveries. “The reality is that they [Airbus] depend on their suppliers. »
A deadline in 2030
The moment when the A220 generates profits is critical for the future. Airbus must buy out Quebec’s participation in this program in 2030. That is when we will have an answer to our questions. The Quebec government will have a better chance of recovering part of its investment over several profitable years. Conversely, the longer profits are delayed, the more the amount obtained at the time of repurchase risks being reduced.
The slope to go back up remains steep. The value of the initial investment of 1.3 billion (1 billion US) announced by the Liberal government of Philippe Couillard in 2015 had become “zero” in the report of the Economic Development Fund – the document which takes stock of investments of the Quebec government. The value of Quebec’s investment in the A220 is reassessed annually.
“If the real value of the investment, for the government, falls below its cost and the depreciation is expected to be long-term, the carrying value of this investment will be reduced to take into account this lasting loss in value” , underlines the Ministry of the Economy.
In other words, Quebec cannot do anything other than report any negative variation in its investment in the A220.