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The Feb. 4 announcement that Airbus and the Quebec government will jointly invest C$1.5 billion to expand and increase production of the A220 narrow-body jet in Mirabel and Mobile, Alabama, drew a mixed reaction from industry watchers.
Quebec will kick in $385 million, while Airbus will contribute $1.15 billion. The two parties also agreed to delay the date of when Airbus can buy back Quebec’s stake in the joint venture to 2030.
Quebec first invested in the aircraft when it was known as the Bombardier C Series in 2015, when former premier Philippe Couillard authorized Investissement Quebec to put C$1.2 billion into the program for a 49.5-percent share. Bombardier gradually handed control of the C Series to Airbus for free starting in 2018, which diluted Quebec’s stake, before exiting the venture entirely in February 2020.
The Quebec government’s decision to back the A220 drew sharp criticism from the Canadian Taxpayers Federation. “If the risk of losing $1.3 billion is too great, surely adding an extra $385 million to the pot is worse,” Renaud Brossard, head of the taxpayer group in Quebec, said in a statement. “The government needs to stop putting more money into a project that has already cost Quebecers far too much.”
Quebec’s financial contribution was also questioned by Robert Kokonis, president of Toronto-based aviation consulting firm AirTrav, who felt it wasn’t necessary.
“If this was the beginning of a new aircraft program that needed help getting off the ground, that’s one thing,” he said. “But the A220 is starting to sell well since Airbus took over, so do we really need the government to subsidize it? Politically, it looks good to the workers and the unions to protect jobs in Mirabel, but the government could find better use elsewhere for the investment.”
But Karl Moore, associate professor at McGill University, had a different viewpoint.
“The government wants to maintain and create well-paying jobs in Quebec, and you can’t play the game without government help,” said Moore. “That goes for Boeing and Embraer and all the other manufacturers. And Quebec is one of the largest aviation centers in the world and wants to remain one.”
Airbus has been trying to cut production costs of the A220 since it took control of the C Series in July 2018. It is planning to build 14 units per month by about 2025 — 10 per month at the Mirabel facility and four per month at the Mobile plant. The current production rate is five aircraft per month — four from Mirabel and one from Mobile.
Firm orders have doubled in the past three years to 680 as of Jan. 18, 2022. Airbus delivered 48 aircraft (45 A220-300s and three A220-100s) in 2021, up from 38 in 2020.
