In a move that should be surprising to no-one, Airbus and the Government of Quebec are to take over the ownership of the A220 programme, with Bombardier exiting the partnership.
Bombardier, he transferred its remaining shares in Airbus Canada Limited Partnership (Airbus Canada) to Airbus and the Government of Québec. The transaction is effective immediately.
This agreement brings the shareholdings in Airbus Canada, responsible for the A220, to 75 percent for Airbus and 25 percent for the Government of Québec respectively.
The Government’s stake is redeemable by Airbus in 2026 – three years later than before.
As part of this transaction, Airbus, via its wholly-owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier in Saint-Laurent, Québec. During these three years, work will continue at Saint-Laurent, with the work moving to Mirabel where the A220 is currently assembled.
So, what are the numbers?
Bombardier will receive a consideration of $591M from Airbus, net of adjustments, of which $531M was received at closing and $60M to be paid over the 2020-21 period. The agreement also provides for the cancellation of Bombardier warrants owned by Airbus, as well as releasing Bombardier of its future funding capital requirement to Airbus Canada.
The A220 programme has been ramping up since Airbus has come into the picture, with 658 frames ordered by the end of January 2020.
Currently, 107 A220 aircraft are flying with seven customers on four continents, with 48 of those frames delivered in 2019.
Airbus Chief Executive Officer Guillaume Faury said
“This agreement with Bombardier and the Government of Québec demonstrates our support and commitment to the A220 and Airbus in Canada. Furthermore it extends our trustful partnership with the Government of Québec. This is good news for our customers and employees as well as for the Québec and Canadian aerospace industry,”
“I would like to sincerely thank Bombardier for the strong collaboration during our partnership. We are committed to this fantastic aircraft programme and we are aligned with the Government of Québec in our ambition to bring long-term visibility to the Québec and Canadian aerospace industry.”
Meanwhile, Premier of Québec, François Legault, states
“I am proud that our government was able to reach this agreement. We have succeeded in protecting paying jobs and the exceptional expertise developed in Québec, despite the major challenges we faced in this regard when we took office. We have consolidated the government’s position in the partnership, while respecting our commitment not to reinvest in the program. By opting to strengthen its presence here, Airbus has chosen to focus on our talents and our creativity. The decision of an industrial giant like Airbus to invest more in Québec will help attract other world-class prime contractors,”
Alain Bellemare, President and CEO Bombardier, Inc states
“This transaction supports our efforts to address our capital structure and completes our strategic exit from commercial aerospace,”
“We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry. We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Québec and Canada. We are confident that the A220 program will enjoy a long and successful run under Airbus’ and the Government of Québec’s stewardship.”
With Bombardier trying to claw its way back to profitability, it seems that the final part of the jigsaw has slipped into place as it exits Commercial Aviation. Already, it has disposed of its Dash family to De Havilland of Canada, the CRJ maintenance line to Mitsubishi, and the A220 (C Series programme) to Airbus/Government of Quebec.
As for the private jet section of Bombardier – that too could be up for sale.
It brings to an end of work started in in 1998 with the BRJ-X programme, and launched formally as the CSeries in 2007. The first flight of which was in 2013 and first delivery in June 2016.
And as for Airbus, whilst it might have paid some more pretty pennies to get an A319neo killer, it seems to be paying off with more frames being delivered and orders coming in – as well as buying its way into the 100-150 market.
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