Airbus A220 value | A little patience, ask Airbus and Quebec

New orders, reinvestments and a new tool to accelerate the production rate of the Airbus A220 will not change anything in the short term: taxpayers will have to wait a few more years before seeing their investment in the old C Series of Bombardier regain some luster.

Julien Arsenault
The Press

To Quebecers who are tapping their feet and wondering if the results will finally be there after public financial support which reaches around 1.7 billion, the Legault government and Airbus respond that they still need “a little patience”.

“All I can say is that the program is working,” said Economy and Innovation Minister Pierre Fitzgibbon on Tuesday on the sidelines of a visit to Airbus facilities in Mirabel. in the Laurentians. “I have great confidence that the value of the investment when sold will be greater than [aux sommes] invested. »

He had participated, along with the Chairman and CEO of Airbus Canada, Benoît Schultz, and Philippe Mhun, Chairman of the Board of Directors of Airbus Canada, in the media presentation of the A220 pre-assembly line.

Still in deficit, the program should break even around 2025, when the production rate will increase from 6 to 14 planes per month at Mirabel and Mobile, Alabama. Until then, in the financial statements of the Quebec government, the value of the investment on the government’s books may not change.

According to the most recent Economic Development Fund report, the “fair value” of the investment in the program was “nil” as of March 31, 2021.

“The Auditor General imposes rules that mean that today the joint venture loses money, so it’s worth zero, recognized Mr. Fitzgibbon. The order book is very well filled. You have to deliver them [les avions] and run. »

Always bread on the board

Quebec owns 25% of the A220. The Liberal government of Philippe Couillard flew to the aid of Bombardier in 2015 by extending 1.3 billion. Despite its initial skepticism about the investment, the Legault government has nevertheless just returned 380 million as part of a joint reinvestment of 1.5 billion made with Airbus to avoid seeing its stake be diluted. His speech has particularly changed. Quebec is now dangling a profit.

By loosening the purse strings, the Quebec government is postponing to 2030 the time when Airbus can buy back its stake. If the program is profitable for several years, its value should increase, which will allow taxpayers to recover some of their marbles.

More than 70 orders have been obtained since the beginning of the year. There are some 540 firm contracts in the order book, which covers several years of production.

In a separate press scrum, Mr. Schultz held the same speech as the Minister of the Economy by advocating patience, recalling that the A220 was a still recent program which had not reached its cruising speed.

“Our industry is one of fairly long cycles,” he said. You develop an airplane, it takes time. »

The European aircraft manufacturer has been saying the same thing since 2018, when it took over the controls of the aircraft: sustainability depends on reducing costs and increasing the number of aircraft assembled. This “consistency” should be viewed as a “good thing,” according to Schultz. It means things are moving in the right direction.

In service since last January, the pre-assembly line has been fitted out in the space of approximately 125,000 sq.² where Bombardier previously assembled its CRJ regional aircraft.

Essentially, the electrical wiring, floors and other modules will be installed in the fuselages, which will then end up on the assembly lines at Mirabel and Mobile. The objective of the multinational is to bring together the preparation activities of the fuselage sections in one place.

The investment has not been quantified by Airbus. This is the first channel of its kind established by the European giant outside the Old Continent.