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The Airbus A220 assembly line at the company’s facility in Mirabel, Que., in January, 2019.Ryan Remiorz/The Canadian Press
Airbus SE EADSY is set to unveil one of its biggest ever orders for its Canadian-made A220 airliner, a multibillion-dollar sale to budget carrier AirAsia that further cements Quebec as one of the key global hubs for commercial aircraft production.
The European aerospace giant will provide details Wednesday of a long-awaited order for as many as 150 planes from AirAsia, according to a senior federal official. The Globe and Mail is not naming the source because they are not permitted to speak for the companies.
Prime Minister Mark Carney is expected to join Quebec Premier Christine Fréchette and Airbus officials for the announcement at the Airbus complex in Mirabel, Que., the main site for A220 assembly. Union leaders and local politicians confirm that they’ve also been invited.
“Politically, there’s something important here” in showcasing Canada’s capability as an aerospace manufacturing power, said Mehran Ebrahimi, an aerospace specialist at the University of Quebec at Montreal.
This is a big deal for more than 100 jets that are designed and built largely in Canada and not in Europe or the United States, he said, referring to the global bases of Airbus and Boeing Co.
“It slides right into Mr. Carney’s strategy of saying ‘We can sell internationally and broaden our export markets,’” Mr. Ebrahimi said. “The fact this is a buyer in Asia, where he’s put a lot of emphasis recently and travelled there, is significant.”
Airbus seeks to expand defence footprint in Canada
AirAsia is a major multinational low-cost airline based in Malaysia that operates an all-Airbus fleet of about 250 planes. Launched by businessman Tony Fernandes, it was hit hard during the height of the COVID-19 pandemic and forced to restructure but is now pushing to expand.
Among its plans, the carrier is aiming to launch a Middle East hub in Bahrain that would serve as a springboard for flights into Europe.
The order highlights the effort by the Carney government to double non-U.S. exports within the next decade in a bid to untangle Canada’s economic dependence on the United States, which has unleashed a wave of tariffs that are crippling many Canadian companies selling to U.S. customers. Export Development Canada is expected to help finance the aircraft.
For Airbus, it is validation of its decision to take over the A220 program from Bombardier Inc. in 2018. The European plane maker has made progress on sales and production flow since Bombardier relinquished ownership of the aircraft, previously called the CSeries.
But significant obstacles remain, namely achieving a manufacturing cadence that delivers a return for Airbus and the Quebec government – its partner in the venture.
‘No debate’ within Airbus that Bombardier jet program takeover was worthwhile, CEO of Canadian unit says
Airbus has said it needs to produce 14 A220 jetliners a month at its facilities in Mirabel and Mobile, Ala., for the program to break even. That threshold has proved elusive. The new target is now to stabilize output at 12 jets a month this year from the current seven or eight, with no specific timeline for the 14 level.
A spokesperson for Airbus declined to comment Tuesday. Staff at AirAsia did not respond to a request for comment.
Airbus has struggled with supplier and labour issues, blaming bottlenecks in airframe components and cabin materials for the delays in shipping aircraft out to clients. The A220’s geared turbofan engines have been another major problem. Pratt & Whitney, the manufacturer, disclosed in 2023 a major and widespread defect in the motors because of what it said was contaminated powder metal used in production.
A number of airlines grounded their A220 jets as Pratt worked through a fix and at least one, Egyptair, sold off its A220 fleet entirely. The engine maker has hatched a solution that is gradually being swapped into all A220s in service while newly built A220s are now being fitted with upgraded engines, according to Airbus.
Independent of Airbus’s A220 manufacturing challenges, analysts have been saying that the company needs to generate more sales for the plane to secure its viability.
Airbus to start sales drive for larger A220 jet, sources say
As of the end of December, Airbus had struck deals for 949 A220s from 32 different customers, including major carriers like Delta Airlines, Jet Blue and Air Lease Corp. It had a backlog of 467 jets ordered but not yet delivered, which is about five years of work at current rates.
“This new order puts the program on the path to profit,” said Ernest Arvai of U.S. aerospace consultancy AirInsight. “It certainly gets it much closer to the break-even point, and it gives the airplane some additional market momentum.”
Quebec, which had invested US$1-billion in the A220 program to help Bombardier avoid financial collapse, held a 16-per-cent stake when Airbus took control and later boosted its share to 25 per cent, while Airbus owns the other 75 per cent.
The province has since written off the initial US$1-billion investment and, last fall, reduced by half the estimated value of its current stake in the limited partnership, pegging it at US$300-million.
Airbus employs roughly 5,000 people in Canada, its largest footprint outside the European Union. The company is pushing to deepen its relationships in the country in the years ahead, including winning more work for its defence unit from the federal government.
The company recently dispatched chief executive Guillaume Faury to meet with senior lawmakers in Ottawa to more fully understand the government’s objectives.
