Airbus SA, Bombardier Inc., and the government of Québec agreed on terms for Airbus to acquire a 75% stake in the C Series Aircraft Limited Partnership, a joint-venture established in July 2018 to manage the narrow-body aircraft program now known as the Airbus A220 series. Québec will raise its share from 19% to 25%.
Bombardier — which developed the original C Series jets with financial support by Québec —will receive $591 million for its stake, $531 million at closing, and is released of its future funding requirements anticipated by the earlier partnership agreement.
The sale agreement also transfers to Airbus the A220 and A330 production capabilities in Saint-Laurent, Québec, which will be operated by Stelia Aéronautique Saint Laurent Inc., a new subsidiary of the Airbus wholly owned subsidiary Stelia Aerospace. Bombardier employees at Saint-Laurent and at the A220 assembly operations in Mirabel, Québec, will be retained as Airbus workers.
Stelia Aéronautique Saint-Laurent will continue producing A220 cockpits and aft fuselages, as well as A330 aerostructures, for approximately three years. Then, the A220 packages will be transferred to the Stelia Aerospace site in Mirabel to optimize logistics with the A220 final assembly line in Mirabel.
The Québec stake in the partnership is redeemable by Airbus in 2026, three years later than indicated in the earlier partnership.
"This agreement with Bombardier and the government of Québec demonstrates our support and commitment to the A220 and Airbus in Canada," stated Airbus CEO Guillaume Faury. "This is good news for our customers and employees as well as for the Québec and Canadian aerospace industry.”
Bombardier reportedly invested over $6 billion to develop the C Series/A220, and the jet’s commercial debut came in July 2016. The twin-engine aircraft are sized to carry 108-133 passengers (A220-100) and 130-160 passengers (A220-300), which “perfectly complement(s) Airbus’ existing best-selling A320neo family,” the OEM stated when it rebranded the program in 2018.
A220 series jets are powered by Pratt & Whitney PW1500G geared turbofan engines, which promise “at least 20% lower fuel-burn per seat compared to previous generation aircraft,” according to Airbus.
Selling its A220 stake would effectively close-out Bombardier's position in the commercial aviation market. In October 2019 it agreed to sell its aerostructures business to Spirit AeroSystems Holding Inc. Earlier, in June 2019 Bombardier sold its Canadair Regional Jet program to rival Mitsubishi Heavy Industries for $550 million plus liabilities estimated at $200 million.
Bombardier's new business model is centered on its rail business and the Global business aircraft series.
Airbus acquired the A220 stake in 2016 for a nominal C$1.00, plus the acquisition of program liabilities.
The A220 program has performed well since the Airbus takeover in 2018. Currently, there are 107 A220 jets in service with seven airline customers. Airbus records 658 total orders for A220 aircraft, including from Delta Air Lines, JetBlue, and Moxy, the start-up airline venture led by JetBlue founder David Neeleman.
In addition to Mirabel, the A220s are assembled at Mobile, Ala., and both operations are being expanded to to address the order backlog.
Relatedly, the Alabama site has been exempted from the list of tariffs proposed by the Trump Administration in response to the World Trade Organization's ruling in favor of the U.S. case for $7.5-billion worth of counter-tariffs on industrial goods from the European Union and certain EU member states — a case that stems from a long dispute between Airbus and Boeing Co., each alleging the other benefitted from government subsidies.
