Canada’s Bombardier is moving as fast as it can to bail out of commercial aircraft manufacturing, and that could mean an increase in production of A220 planes by Airbus at its plant in Alabama.
Following fourth quarter financial reports last week that wrapped up a dismal 2019 performance by its commercial aircraft division, Bombardier gave shareholders every reason to expect an early “deleveraging” from its 33.5 percent stake in the A220.
Airbus bought a majority stake in the aircraft in 2018 and said it planned to end up owning 100 percent, but now it seems that might happen sooner rather than later.
There is no indication by Airbus that it will stop making A220s in Quebec, where the first A220s were produced in 2018.
But plans described in Airbus’ public disclosures call for both a 20 percent cost cutting in the A220 program and a ramp-up in A220 production.
The financial plan for the A220, say company officials, “calls for additional cash investments to support production ramp-up, pushes out the break-even timeline, and generates a lower return over the life of the program.”
As clear as Bombardier’s intentions to bail out of commercial aircraft manufacturing, observed a recent article in Aerotime, “Airbus’ intentions are also very clear: it plans to increase its A220 output by the middle of the decade in Mobile, Alabama alone.”
In a recent interview Airbus Canada LP CEO Philippe Balducchi declined to say how many A220s Airbus expects to produce in 2020 but said by 2025 Airbus expects to be making 10 A220s a month in Montreal and four a month in Mobile.
Airbus will deliver its first Alabama-made A220 this year.
In 2018, Airbus’ Mobile plant became the second plant to make the midsize, midrange A220, after Airbus came to Bombardier’s rescue by buying a 50.6 percent stake in the company’s C Series model, now branded the A220 series.
Airbus and Boeing viewed the C Series as a competitive threat to a niche demand by airlines for smaller, midrange jets. Boeing challenged sales before the U.S. Trade Commission, saying Bombardier was dumping product at below market prices.
Under threat of a 300 percent tariff the Commission was about to drop, Airbus bought a majority stake in the Canadian aircraft and skirted the tariff levy by opening a plant in Alabama and declaring the aircraft U.S.-made.
