Airbus Presses Boeing Rivalry With Jet Deal, Production Ramp-Up
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Airbus SE pledged to churn out more aircraft than ever and consolidated its ownership of the A220 jetliner, pressing home its advantage over Boeing Co. and its grounded 737 Max in the growing narrow-body market.
The European planemaker said Feb. 13 that it expects to hand over about 880 jets in 2020, building on record output last year. Deliveries of the A320-family workhorse, a direct competitor to the Max, will rise to as many as 67 a month by 2023, while the smaller A220 will also see volumes accelerate.
Together, the moves are meant to draw a line under a tumultuous 2019 after production shortcomings prevented Airbus from fully exploiting the Max crisis at its U.S. rival. The Toulouse, France-based planemaker also ran into trouble with its military transport plane, the A400M, canceled the ambitious A380 super-jumbo and settled a longstanding bribery probe for 3.6 billion euros ($3.9 billion), driving annual results to a loss.
“We’ve put a lot behind us in 2019 and are now looking at 2020 to set the foundations of sustainable growth,” CEO Guillaume Faury told reporters. “We want to continue to gain contracts, to maintain the visibility we have today.”
Airbus is paying $591 million to the A220’s developer, Bombardier Inc., to boost its stake in the program to 75%, expanding its bet on a plane that seats 100 to 150 people and complements the larger A320.
Host Seth Clevenger went to CES 2020 in Las Vegas and met with Rich Mohr of Ryder Fleet Management Solutions and Stephan Olsen of the Paccar Innovation Center to discuss how high-tech the industry has become. Listen to a snippet above, and to hear the full episode, go to RoadSigns.TTNews.com.
The promise of the new plane was underscored on Feb. 13 when Airbus announced an outline agreement to sell 50 to Nigeria’s Green Africa Airways. It’s a coup for the A220, after the startup originally ordered the Boeing Max, which has been idled since last March.
“We have opportunities with the A220,” Faury said. “We see it can be a solution for some of the needs of the market.”
For Montreal-based Bombardier, exiting the A220 program closes the book on more than $6 billion of investment that was meant to challenge the two top planemakers, but instead left it saddled with debt that has forced the company into a breakup.
Originally named the C Series, the A220 won praise for fuel-efficient engines, composite wings and an airy cabin featuring large windows. But the plane ran more than two years late and about $2 billion over budget, and had trouble attracting buyers in an industry dominated by Airbus and Boeing.
After U.S. President Donald Trump’s administration imposed tariffs of about 300% on the jet, Bombardier agreed to sell about half the program to Airbus. Still, the Canadian company was left with hundreds of millions of dollars of funding obligations. Those are now gone, and with the Feb. 13 deal the government of Quebec lifted its share in the A220 program to 25%.
After also selling its turboprop-plane business, its regional jet arm and a wing plant in Belfast, Bombardier is in advanced talks to sell its rail business to French rival Alstom SA, people familiar with the matter said Thursday. The embattled manufacturer is mulling the disposal of its corporate-jet operation to Textron Inc., maker of Cessna planes, the Wall Street Journal has said.
Shares of Airbus fell 1.6% as of 12:34 p.m. in Paris, after announcing full-year results that were blighted by one-time charges.
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