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The new line will likely start operating sometime around 2021, CEO Philippe Balducchi says. Airbus has ample land in Mirabel to expand.
FRÉDÉRIC TOMESCO – July 18, 2019
Airbus is leaning toward building a new plant in Mirabel within about two years to speed up production of the jetliner formerly known as the C Series.
The proposed pre-assembly facility will be tasked with preparing complete sections of the A220 plane before they are moved to the final assembly line. A decision on whether to proceed with the investment will be make in the coming weeks, according to Philippe Balducchi, chief executive officer of the Airbus Canada Limited Partnership.
“Our goal with this pre-assembly facility is to protect the final assembly line,” Balducchi told the Montreal Gazette Thursday in a telephone interview from Toulouse, France, where Airbus is based. “We are very probably going to build this pre-assembly facility, and we will do it in Mirabel.”
The new line will probably start operating sometime around 2021, Balducchi said. Airbus has ample land in Mirabel to expand, he added.
Airbus inherited Bombardier’s Mirabel facilities a year ago when it took control of the Montreal-based company’s C Series program, which it later renamed the A220. Bombardier retains a 34-per-cent stake in the partnership, while the Quebec government owns 16 per cent.
About 2,500 employees now work on the A220 in Mirabel, up from about 2,200 a year ago. While hiring for the program will continue in the months ahead, “it won’t be massive,” Balducchi said.
Having shipped 21 A220s in the first half of the year, Airbus is aiming to reach about 45 deliveries for all of 2019. Mirabel’s capacity is about 120 planes a year.
Output should climb further next year when a second A220 final assembly line in Mobile, Ala., begins deliveries. The first plane sections have already arrived in Mobile, and assembly work will begin in the coming weeks, Balducchi said. When fully operational, the U.S. factory will be capable of building up to 50 jets per year.
In the meantime, Airbus has begun negotiating with suppliers in a bid to lower production costs of the A220 by more than 10 per cent. In exchange, Airbus can offer suppliers higher volumes as orders pile up for the jet.
“This is a clear effort to reduce costs,” Balducchi said. “We’ve started engaging our suppliers on this, and have reached some agreements. We are looking for double-digit reductions, and we see a lot of potential. We’re also ready to discuss improvements and changes in design with our suppliers in an effort to reduce costs, as long as it doesn’t impact the performance of the plane.”
Prospects for the A220 and its suppliers have been buoyed by last month’s announcement at the Paris Air Show that U.S. carriers Delta Air Lines and JetBlue were ordering additional units of the jet.
“Delta already operates the plane, which shows that people who fly the A220 like it and they want more,” Balducchi said. “Today, we see appetite from airlines in every region of the world.”
Airbus Canada’s CEO is also encouraged by recent commitments from leasing specialists Air Lease Corp. and Nordic Aviation Capital, which should result in the A220 being deployed at new airlines over the coming years.
“ALC and Nordic are very influential lessors, and they are going to allow us to accelerate the dissemination of the plane,” he said. “In the future we will see new orders because of these successes we had in Paris.”