Bombardier considers exit from A220 partnership

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January 17, 2020
Bombardier Airbus A220
A worker on the A220 final assembly line in Alabama. Photo: Airbus

Bombardier has warned it might exit its partnership with Airbus to build the A220 passenger jet.

The Canadian company announced it was hopping into bed with Airbus in 2017 and consummated the partnership to produce what were then its C Series passenger jets on July 1, 2018.

Airbus took a controlling interest in the partnership and rebranded the C Series as the A220 while Bombardier and the Quebec provincial government took minority stakes.

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Bombardier subsequently announced it was exiting commercial aircraft manufacturing and would sell its regional jet business to Mitsubishi Heavy Industries and its aerostructures manufacturing business in Belfast to Spirit Aerosystems.

It is now mulling an exit from the Airbus Canada Limited Partnership and raised the prospect in a preliminary fourth-quarter earnings report that anticipates a $C130m pre-tax earnings loss.

“With its exit from Commercial Aerospace, Bombardier is reassessing its ongoing participation in ACLP,’’  Bombardier said.

“While the A220 program continues to win in the marketplace and demonstrate its value to airlines, the latest indications of the financial plan from ACLP 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.

“This may significantly impact the joint venture value. Bombardier will disclose the amount of any write-down when we complete our analysis and report our final fourth quarter and 2019 financial results.”

Airbus has been pushing the regional jet for the 100 to 150 seat market and as a complement to its A320 family.

It also decided to establish an A220 final assembly line in Mobile, Alabama, and officially began manufacturing the plane in the US in August 2019.

The first US-made A220 – an A220-300 destined for Delta Air Lines – is scheduled for delivery in the third quarter of 2020.

Airbus aims to produce between 40 and 50 A220 aircraft per year at the facility from the middle of this decade.

The plane is also produced in Mirabel in Canada.