Airbus is pushing back the estimate for A220 programme break-even to the middle of the current decade, several years later than the 2020 timeline for which Bombardier had been aiming.
It has disclosed that it has taken a larger share, 75%, of the programme by picking up part of Bombardier’s stake in Airbus Canada Limited Partnership.
Speaking in Toulouse on 13 February, Airbus chief financial officer Dominik Asam said that achieving break-even required a “decent fill rate” at both final assembly lines, Mirabel and Mobile.
Airbus delivered 48 A220s last year but, at maximum output, the two plants should be capable of turning out 160-170 jets annually, says Asam.
He says Airbus foresees the break-even point occurring “in the middle of this decade”.
Bombardier had cautioned that the latest financial plan for Airbus Canada Limited Partnership called for additional investment to support production ramp-up – and would push back the break-even point.
Speaking during Bombardier’s own full-year results briefing, also on 13 February, chief executive Alain Bellemare said that the decision to divest the remaining interest in the partnership would mark Bombardier’s “final exit” from commercial aviation.
“It is a big deal,” he says, but says the A220 will “achieve its full potential” under Airbus’s control.
Selling the shareholding will generate nearly $600 million in proceeds but will also free Bombardier of previous commitments, amounting to some $700 million, to support the A220 programme.
Bellemare points out that in 2016 – when Bombardier had estimated a 2020 break-even for the then-CSeries programme – the company’s commercial aerospace activities had lost $400 million and was consuming over $1 billion in cash.
“Addressing this was critical to the turnaround,” he says, adding that the company has “successfully dealt with our underperforming assets”. Bombardier has recently sold businesses including its Q400 turboprop line and its CRJ regional jet production.
Combined with other divestments, Bellemare says, the A220 transaction will help generate over $1.6 billion in cash and eliminate $2 billion in liabilities and future commitments.
“We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry,” he adds.
“We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Quebec and Canada.”
Airbus’s 75% share of the A220 programme will be complemented by the Quebec government’s 25% stake.