In an effort to avoid its current stake in the former Bombardier C Series programme being diluted by a next round of financing, Quebec has agreed to contribute US$300 million to a combined total of US$1.2 billion in new investment. According to REUTERS news agency Quebec will maintain its 25% minority stake in the A220 Series while Airbus, which will invest US$900 million, will maintain its 75% majority stake.
The move will extend the time scale by which Airbus will have to buy back the Quebec government’s shares originally set as 2026 but which will now be 2030, while also helping to secure approximately 2,500 jobs. “At that time, we’re going to have a fair market value assessment and I’m very hopeful we’re going to make money and recuperate the original investment,” Quebec Economy Minister Pierre Fitzgibbon commented.
The move is seen as strategically beneficial for the government as currently the programme has yet to show a profit. As of March 31, 2021, Investissement Québec estimated the value of Quebec’s investment to be nil. However, 2025 has been targeted as the year when Airbus anticipates the programme will finally become profitable.
At the commencement of the European planemaker’s acquisition of the then Bombardier C Series for 110- and 130-seater jet aircraft, it was hoped that Airbus’ higher purchasing power and global network of suppliers would help reduce the cost of components, driving the programme into the black by now. Though sales for the A220 Series jet have grown to the point where it has a backlog of approaching 500 aircraft, Airbus has failed to win the hoped-for concessions from its suppliers. The A220 is built both at an Airbus plant in the Montreal area and at the Mobile facility in Alabama.
