Modular A220 concept

From Camber Aviation Management and Business Jet Interiors- link to story

BY IZZY KINGTON ON 22ND MAY 2020

Stephen Vella of Kestrel Aviation Management and Tom Chatfield of Camber Aviation Management present an A220 corporate cabin concept developed with Pierrejean Vision, F/List and Flying Colours

An alternative is required to ultra-long-range business jets with limited cabin space and airliners characterised by high acquisition costs combined with greater owner risk. In the case of the former, the attractiveness of such incredible range is limited by the requirement to carry additional flight deck crew on such long journeys, which may require use of the passenger cabin. Meanwhile, airliners are sold green, that is, without a cabin installed, requiring the buyer to contract a designer, a completion centre and an experienced project manager to oversee the complex process from aircraft purchase, through design, build, certification and entry into service. The buyer, who rarely has experience in this field, must invest considerable effort while shouldering all of the budget and schedule risk.

Camber Aviation Management, Kestrel Aviation Management and Pierrejean Vision have partnered to create a solution. This team has created and delivered numerous narrow- and wide-body Airbus and Boeing VIP aircraft for private individuals, corporations and heads of state over the past 20 years.

L-R: Tom Chatfield of Camber Aviation Management, Stephen Vella of Kestrel Aviation Management, and Jacques Pierrejean of Pierrejean Vision

Market requirements
The team canvassed the market and identified several key features that a new design would require. These included a spacious cabin capable of seating of 10-32 passengers; modular, configurable layouts to suit different missions; and global, high-speed connectivity with entertainment options that match those enjoyed on the ground. The aircraft would also need to offer a max-payload range covering 90% of the missions operated by current large-cabin aircraft; be supported by exceptional operational and technical product service worldwide; and be at least 20% less expensive to own and operate compared to direct competitors. The team concluded there was only one platform that met the defined criteria – the Bombardier CSeries 300, now the Airbus A220-300.

The A220 met all of the market’s expectations but the differentiator would centre on a unique cabin design and the quality of the finished aircraft. The team partnered with F/List and Flying Colours Corporation to refine the detail design and perform engineering studies. F/List was chosen for its exceptional skills in fabricating VIP jet cabin interiors while Flying Colours was selected for its extensive engineering and cabin integration skills. Together, the team invested over 18 months to refine the detailed design of the A220 cabin and its associated systems.

There are three fixed zones and four flexible ones

Project aims
As well as creating a beautiful, state-of-the-art cabin, it was vital to offer a broad range of aesthetic customisation options, incorporate clever engineering and production strategies to shorten the outfitting cycle, and drastically reduce cabin non-recurring costs through intelligent pre-engineering custom configurations.

The design is centred on a seven-zone modular cabin comprised of three fixed and four variable zones. The forward, mid and aft zones are fitted with common entry and galley, VIP lavatory and closet, and master suite with queen-size bed and en-suite washroom featuring a steam shower, respectively.

A guest lounge

Customisation
The flexible zones enable each buyer to create their own layout. The buyer can, for example, select a spacious lounge that converts to a dining room with a unique convertible table design, a cosy forward cabin, a bespoke media lounge with a 75in screen and tuned Dolby surround sound, an expansive private office or children’s bedroom. True customisation is achieved by applying the client’s preferred colour palette, materials and finishes.

The dining and conference area

Technology
Key equipment includes unique VIP cabin lining and lighting styles to emphasize different cabin zones; seating designed to provide comfortable sleep options; galley inserts including steam and induction ovens, an espresso maker and wine chiller; a dual AVOD IFE system with massive library and wireless streaming to monitors, tablets and personal devices; and global Ku- or Ka-band voice/data satellite communications. The lighting, IFE, window shades and flight attendant call functions can be controlled from passenger tablets.

A private office

The distinctive modular concept was developed to simplify the cabin design process, reduce completion build times, and lower production and non-recurring costs over a number of aircraft. Together, these design goals significantly reduce manufacturing and certification costs – essential in achieving the right price point in the market while providing a bespoke and highly capable aircraft. Importantly, this technology allows the team to design a cabin that combines functionality and aesthetics together with reliability and ease of maintenance, a combination that cannot be easily realized for one-off ‘prototype’ designs in legacy airliners.

The optional media lounge

About the authors: As CEO of Camber Aviation Management, Tom Chatfield leads a team of experts that guide and manage the complex process of transforming an airliner to a corporate jet. Stephen Vella is CEO Kestrel Aviation Management, which has turnkey project managed the purchase, cabin design, outfitting and sale of 50 large corporate aircraft, including the world’s first BBJ787.

Images: ©Camber Aviation Management, Kestrel Aviation Management and Pierrejean Vision 2019.

Air Canada adds A220 Toronto – Vancouver service in June 2020

News from Routes Online – link to story

By Jim Liu | Posted 18 May 2020

Air Canada Airbus 220-300

Air Canada in June 2020 is adding 5th daily service on Toronto – Vancouver route, including the addition of Airbus A220-300 aircraft. The A220-300 will operate as AC111/122 service. Additional changes to planned operation remains likely.

AC107 YYZ0700 – 0854YVR 333 D
AC103 YYZ0805 – 0950YVR 789 D
AC111 YYZ1245 – 1448YVR 223 D
AC123 YYZ1800 – 2100YVR 321 D
AC125 YYZ1930 – 2115YVR 788 D

AC106 YVR0800 – 1528YYZ 321 D
AC108 YVR0900 – 1620YYZ 788 D
AC116 YVR1330 – 2055YYZ 333 D
AC118 YVR1430 – 2150YYZ 789 D
AC122 YVR1645 – 0018+1YYZ 223 D

AC111/122 operates with A319 on Day 1 from 16JUN20. The A220 briefly operated this route on selected dates in late-April 2020.

Why the new Airbus A220 is popular with airlines during the coronavirus pandemic

News from the Points Guy UK – link to story

Edward Russell ~ 14 May 2020

There are winners and losers of every crisis in the aviation industry. The coronavirus pandemic has already forced some airlines, like Virgin Australia, into restructuring. It’s also grounded many large aircraft like the Airbus A380, but an emerging winner may be a Canadian jet that recently got a new lease on life and is now proving its worth.

That jet is the Airbus A220, formerly the Bombardier CSeries. The plane benefits from its small size and low operating costs coupled with operating capabilities that rival larger planes like the Airbus A320 and Boeing 737. These are proving assets to airlines looking to slash expenses while maintaining a minimal flight schedule through the COVID-19 crisis.

“When we come out of the other side of this we continue to be excited about the A220s and the benefit that can bring to JetBlue”, JetBlue chief financial officer Steve Priest told analysts and investors on 7 May. “The economics of this aircraft are spectacular”.

The coronavirus crisis has prompted something of a reckoning at airlines. For years fleet planners pushed for larger and more efficient narrow-body models that could fly, for example, transcontinental routes in the U.S. with a full load of passengers. Airbus and Boeing delivered hundreds of their largest narrow-body models, the Airbus A321 and 737-900ER respectively, to airlines across the world.

Then the spread of COVID-19 and fear of the virus halted most air travel in just a few months. Globally, the number of flights was down 81% year-over-year on 5 May, according to flight-data firm Cirium. In a slight positive note, the number of flights was up 19% compared to the week before.

More than half of the global A220 fleet was tracked flying during the week ending 4 May, the data shows. This is a higher percentage than for either the A320 family, 737 family or Embraer E-Jet family.

“Airlines want jets that offer equivalent range and equal or better economics than bigger models, but fewer seats”, Teal Group analyst Richard Aboulafia told TPG. “The A220 is one of the very few products that bring this to the table”.

The A220-300 can fly as far as the A320, about 3,855 miles, but more efficiently and with fewer passengers. The A220 is lighter than the legacy Airbus narrow-body and benefits from the latest generation of engines.

Those advantages play out in the decisions airlines are making during the pandemic.

For example, Delta Air Lines is parking all 62 of its A320s but still flying its 31 A220-100s. The Atlanta-based carrier fits 109 seats on the latter jets compared to 157 seats on the former. In addition, the smallest A220s can fly nearly 100 miles further than the A320s.

(Photo by Zach Griff / The Points Guy)
Onboard a Swiss A220-300. (Photo by Zach Griff / The Points Guy)

More A220s may also be good for passengers. The aircraft are quieter than most larger jets and, in many cases, offer a better onboard experience than comparably sized planes. In the U.S., Delta has even installed seat-back inflight entertainment where most other carriers — excluding JetBlue — have removed systems from their planes.

Even in Europe, where first class often means a blocked adjacent seat, the A220 is a comfortable option for travellers.

“The 2-3 configuration, large and modern bathrooms, big windows and modern touches combine to make for a pleasant flying experience”, wrote TPG’s Zach Griff after two A220 flights on Swiss last summer.

Zurich-based Swiss operates 29 A220-100s and -300s. Many of the planes remain in the air, with the A220 operating 83% of the airline’s flights in May, according to Cirium schedules.

Related: Why I’m a fan of Delta’s Airbus A220

Demand for new A220s continues apace. Air Canada maintains plans to take its full allotment of the jet this year, with 14 A220-300 deliveries still pending. The move comes as the Montreal-based carrier retires its 14 E190s and 65 more Airbus A319 and Boeing 767 jets due to the crisis.

In the U.S., New York-based JetBlue plans to take its first of 70 A220-300s by year-end, Priest said this week. The airline has accelerated A220 deliveries even as it postponed the arrival of 22 new A321neos to beyond 2022 amid broad efforts to cut expenses. The airline will configure its A220s with between 130 and 140 seats compared to 200 seats on its A321neos.

And in Europe, Latvia-based Air Baltic plans to emerge from the crisis as an all-A220 operator after retiring its last 737-300s and ATR turboprops. The airline operated 22 A220-300s and had orders for 28 more at the end of April, according to Airbus orders and deliveries data.

AMSTERDAM SCHIPHOL AIRPORT, HAARLEMMERMEER, NOORD-HOLLAND, NETHERLANDS - 2018/06/30: Bombardier and Airbus combined forces resulting in re-naming the CS-series aircraft into Airbus A220 series. (Photo by C. Van Grinsven/SOPA Images/LightRocket via Getty Images)
An Air Baltic A220 departs Amsterdam Schiphol. (Photo by C. Van Grinsven/SOPA Images/LightRocket via Getty Images)

The jury remains out on whether the coronavirus will prove a pivotal moment for the A220. Airbus had just 529 outstanding firm orders for the aircraft — compared to 6,156 for its A320neo family — at the end of April. And the planemaker has not received any new A220 commitments since the crisis began.

Airbus continues to produce four A220s a month even as it has slowed rates for other passenger jets. However, plans to increase production are indefinitely postponed.

“As preferred as it may be to acquire aircraft to match the need of the network, with coronavirus, the airlines are no longer afforded this luxury”, wrote The Air Current managing director of analysis Courtney Miller in a piece on 7 May. Existing commitments for the A220, as well as the E-Jet-E2, are likely to be delivered and utilized. But new orders from cash-starved airlines are unlikely, he said.

With global aviation bumping along the bottom, there’s been a renewed focused on small jets. But are they really the future of flying? @miller22 explains the case against the Airbus A220 and Embraer E2. The case against the Airbus A220 and Embraer E2Coronavirus brings challenges for both Airbus’s A220 and Embraer’s E2 in adoption of the small narrow-body. TAC Analysis makes the case against their adoption.

Jon Ostrower

Take American Airlines, for example. The messaging of its plans to retire or park five aircraft types from its mainline fleet — including its smallest, the 99-seat E190 — focuses on simplifying its fleet, not adding new optimally-sized models like the A220. In fact, the carrier is even spending money to reduce fleet complexity, moving forward with work adding seats to some A321s and 737-800s. The effort, part of American’s “Project Oasis” updates, comes with the expectation of operational savings after the coronavirus subsides.

But fleet simplification, as American and others are undertaking in a big way, does not necessarily mean orders for new types will dry up completely. Boeing CEO David Calhoun made just such a point during the planemaker’s first quarter earnings call on 29 April.

“This is that moment where rationalization efforts get big”, he said. “And believe it or not, in some cases, it even requires that maybe new aeroplanes [be] ordered”.

Featured image courtesy of Airbus.

Hundreds of Quebec aerospace workers to be laid off at Airbus and Pratt & Whitney

News from City News 1130 – link to story

BY THE CANADIAN PRESS ~ Posted May 1, 2020

Air Canada Airbus 220-300

MONTREAL — Nearly 700 workers are to be laid off in Quebec by two of the province’s main aerospace companies, Airbus Canada Limited Partnership and Pratt & Whitney Canada.

Half of the employees will be laid off Monday for an undetermined period of time in Mirabel, where the A220, the former Bombardier C Series, commercial aircraft is assembled.

Airbus Canada spokeswoman Marcella Cortellazi says the layoffs will last until it has “a clearer visibility” of its activities.

Engine manufacturer Pratt says it will cut more than 343 jobs on May 22 when its order book is reduced due to the airline industry being hit hard by the COVID-19 pandemic.

The Quebec government is allowing manufacturing companies to restart their operations on May 11, but restrictions on the number of employees that can work won’t be lifted until May 25.

Concerned about not being eligible for the federal emergency wage subsidy, Airbus says it will nevertheless pay $847, less applicable deductions, to more than 470 of its workers next week while awaiting their return on May 11.

This report by The Canadian Press was first published May 1, 2020.

The Canadian Press

As Most Airlines Scrap Jet Orders, One Tiny Carrier Is Throttling Up

News from BNN Bloomberg – link to the story

Christopher Jasper, Bloomberg News

A passenger aircraft operated by Air Baltic Corp AS stands at a passenger boarding gate at Munich airport in Munich, Germany, on Tuesday, Jan. 29, 2019. Deutsche Lufthansa AG has decided to speed up growth at Munich and develop it into a hub with a focus on Asia. Photographer: Michaela Handrek-Rehle/Bloomberg

A passenger aircraft operated by Air Baltic Corp AS stands at a passenger boarding gate at Munich airport in Munich, Germany, on Tuesday, Jan. 29, 2019. Deutsche Lufthansa AG has decided to speed up growth at Munich and develop it into a hub with a focus on Asia. Photographer: Michaela Handrek-Rehle/Bloomberg , Bloomberg

(Bloomberg) — Airlines are doing everything they can to scrap or delay jetliner deliveries amid an unprecedented collapse in air travel. Not Air Baltic Corp.

The East European carrier has started talks with Airbus SE to accelerate handovers of its A220 model, Chief Executive Officer Martin Gauss said in an interview. The existing plan to assemble a fleet of 50 of the narrow-body jets by 2025 could come to fruition a couple of years early, he said.

Air Baltic is among a handful of carriers pledging to lean into the coronavirus crisis that’s handed the aviation industry its biggest demand slump ever. The rebound could offer a chance to win market share, Gauss said, adding that one potential step could be geographical expansion in the neighboring Nordics.

While Air Baltic, like others, has had to temporarily ground its fleet, the carrier has been blessed by good timing. It had already decided to permanently ground some older aircraft when the coronavirus hit, and was able to bring those plans forward. It’s also standardizing on the A220, a model smaller and cheaper to operate than other single-aisles like Airbus’s A320 or Boeing Co.’s 737 Max.

Smaller Planes

Gauss predicts the A220 will be ideally suited to the tougher travel market, favoring efficiency and flexibility over size, that emerges from the coronavirus pandemic.

“I always said that come the next crisis we wouldn’t be left with an aircraft that was too big,” Gauss said by phone. “Would you rather have 145 seats like the A220 or 186 on a larger narrow-body? The answer is obvious.”

Air Baltic plans to resume flying on May 14, a day after Latvia’s travel lockdown is due to end, initially serving 12 routes from Riga — though the resumption could be pushed back a week at a time. (Industry executives say they expect low occupancy levels to persist for months.) The network, with secondary hubs in Tallinn, Estonia, and Vilnius, Lithuania, should feature 60 routes by year-end, down from 80 served by the original fleet.

Air Baltic is the third-biggest operator of the A220, formerly the Bombardier Inc. C Series, with 22 currently in the fleet. After the Covid-19 outbreak reached Europe, the airline stood down four 737s and 12 turboprops earlier than it had planned.

The carrier is slated to get four A220s in 2020, though the first due next month will be delayed with Airbus’s Canadian production line closed, Gauss said. Talks with Airbus include scenarios for accelerating future handovers, while adjusting the schedule in the near term, he said.

“We’re always in discussions with customers regarding their fleet, those discussions are confidential,” an Airbus spokesman said.

Nordic Expansion?

The carrier has 30 more options for A220s that it could convert to expand its business, most likely to the Nordic region, though Gauss said that’s not currently on the agenda. Norway’s Braathens Regional Airlines became a casualty of the virus this month, applying for a court restructuring. Discounter Norwegian Air Shuttle ASA is also hanging by a thread, with a pivotal debt-to-equity swap plan being studied by creditors.

While Airbus and Boeing have both suffered cancellations and delivery postponements, some carriers have continued adding planes to their fleet, with a few discount operators seeking to move up in the Airbus queue.

Wizz Air Holdings Plc, Europe’s third-biggest discount carrier, said this month it will take delivery of hundreds of new jetliners as planned despite idling 90% of capacity in response to the virus, including all 15 Airbus planes due this year. Chief Executive Officer Jozsef Varadi plans to position for a post-virus rebound and seize on expansion opportunities as rivals teeter.

State-owned Vietnam Airlines will also seek to accelerate jet deliveries, according to a local report.

©2020 Bloomberg L.P.

Air Canada announces establishment of Airframe Maintenance Centres of Excellence with AAR in Trois-Rivières and Avianor in Mirabel

Provided by Air Canada/CNW

MONTREAL, Feb. 24, 2020 /CNW Telbec/ – Air Canada has entered into letters of intent with each of AAR Aircraft Services Trois-Rivières ULC (“AAR”) and Avianor Inc (“Avianor”) regarding long-term agreements for airframe maintenance, subject to completion of its planned merger with Transat, A.T. These long-term agreements would enable each of AAR and Avianor to develop Airframe Maintenance Centres of Excellence in Quebec for the aircraft types within their areas of expertise, both stimulating new investment in aerospace in Quebec and creating more high-quality aircraft maintenance jobs.

The larger combined Airbus A330 fleet of Air Canada and Air Transat would enable Air Canada to move wide-body A330 maintenance work for both airlines from abroad to AAR in Trois-Rivières, in addition to maintaining and expanding AAR’s airframe maintenance work in Quebec on the A320 family, including all new A321 neo aircraft.

In addition, Avianor would establish a new Centre of Excellence for Air Canada’s new Airbus A220 fleet (formerly the Bombardier C-Series) in Mirabel, adjacent to Airbus’ manufacturing facilities.

The letters of intent are subject to completion of final agreements which will include terms generally applicable to airframe maintenance agreements of this scale.

AAR Aircraft Services – Trois-Rivières, Quebec

AAR currently performs airframe maintenance work in Trois-Rivières on Air Canada’s existing Airbus A320 fleet and Embraer E190 fleet (which is being phased out). 

Air Canada and AAR have entered into a letter of intent that, subject to completion of the Transat merger by Air Canada, requisite Board of Directors’ approvals and completion of final agreements, evidences the parties’ intent to enter into a 10-year renewable agreement for airframe maintenance of both Air Canada’s and Air Transat’s fleet of Airbus A330 and A320 family of aircraft (including the new A321neo) in Trois-Rivières, Quebec.

AAR intends to make the necessary facility infrastructure investments in Trois-Rivières to accommodate the new wide-body A330 work of the combined Air Canada and Air Transat fleets, given that there would be sufficient volumes of heavy maintenance work to support such an investment and to develop a Centre of Excellence. Through this agreement, it is expected that incremental aerospace jobs will be created in Trois-Rivières and AAR’s new capabilities should enable it to attract airframe maintenance work from other operators of the A330.

“From our very first project in Trois-Rivières, we’ve seen a strong commitment to quality, safety and operational performance,” said Rich Steer, Senior Vice-President, Operations at Air Canada. “With our largest hub a short distance away, we’re excited to have a trusted partner like AAR with a similar commitment to excellence, and also proud to be increasing heavy maintenance work in Quebec, especially on wide-body aircraft. This contract for additional work in Trois-Rivières represents a long-term investment in increased airframe maintenance in Quebec.”

“We are honoured to work closely with a highly regarded carrier like Air Canada for so many years and to be chosen as their maintenance provider for the A330 and A320 family fleet types,” said Chris Jessup, Chief Commercial Officer, AAR Corp. “AAR is proud to support the Canadian economy and to grow our overall footprint in Trois-Rivières, especially for the A330.”

AAR Aircraft Services is a full-service aircraft maintenance, repair and overhaul (MRO) provider, wholly-owned and operated by AAR Corp. with over 290,000 sf of facilities in Trois-Rivières, Quebec and Windsor, Ontario, along with facilities in the United States.  AAR took over Premier Aviation’s facilities in Trois-Rivières and Windsor in 2017. Since inception in 2002, the Trois-Rivières facility has experienced a steady growth of clients and services in general maintenance overhaul, modifications, refurbishment and paint requirements. In 2012, the Trois-Rivières facility started to perform MRO services for some of Air Canada’s Embraer fleet, including painting and supporting backshops. AAR expanded Trois-Rivières MRO competencies in 2017 by performing all MRO services on Air Canada’s Airbus A319, A320 and A321 aircraft. In September 2017, Air Canada awarded a 10-year contract to AAR for the maintenance of its 125 Airbus A320 and Embraer E190 single-aisle aircraft at the AAR facilities in Trois-Rivières, contributing to the continuance of 350 specialized jobs. This work was transferred to Quebec from AAR’s Duluth, Minnesota facility.

Avianor Inc. – Mirabel, Quebec

Air Canada and Avianor have entered into a letter of intent that provides for a 10-year agreement for airframe maintenance of Air Canada’s new fleet of Airbus A220 aircraft in Mirabel, Quebec. The agreement is subject to completion of Air Canada’s planned merger with Transat, A.T., and completion of final agreements. Air Canada has a firm order of 45 A220s with options for an additional 30 aircraft. Its initial aircraft entered into service in January 2020.

Avianor is well progressing in its study phase to construct a new 250,000-square-foot hangar in Mirabel in close proximity to the A220 manufacturing facilities of Airbus Canada (formerly the Bombardier facilities) in order to strategically position itself in the heavy maintenance, modification and completion of narrow-body aircraft and other key aircraft programs. The Air Canada work will position Avianor to attract airframe maintenance work from other A220 operators, as well to encourage other suppliers of the A220 to consider establishing operations nearby, thereby contributing to the establishment of a North American centre of excellence in Mirabel. 

Air Canada’s Senior Vice-President, Operations, Rich Steer, stated, “We have been very pleased with the work performed in Quebec by Avianor on Air Canada’s fleet over the last years. This contract assures Air Canada of a quality solution for our Airbus A220 heavy maintenance needs in Quebec through Avianor’s extensive and proven capabilities in this field.”

“This extended relationship with Air Canada shows the scale of technical support that Avianor offers in this competitive marketplace. To build great projects we always need to be surrounded by key players such as Air Canada and it goes without saying that we are extremely proud of today’s strategic announcement. We are thrilled to be working with Air Canada, in support of their expanded fleet and are grateful for their confidence. With years in the industry, we are confident in our ability to provide world-class quality, genuine partnerships and proven customer support while allowing ourselves to envision an enviable Centre of Excellence which could eventually regroup a variety of services such as maintenance, engineering, certification, education and training capabilities under one roof,” said Benoit Hudon, President & CEO, Aerospace & Ground Transportation Division of DRAKKAR, majority owner of Avianor.

Avianor was recently acquired by the Drakkar & Partner’s Aerospace & Ground Transportation Division. Avianor specializes in maintenance, modifications and aircraft completion, including a highly skilled internal engineering support team. Avianor has positioned itself as a vertical integrator in the marketplace. The company occupies over 200,000 square feet of hangars, repair shops, fabrication facilities and warehouse space at Mirabel Airport (YMX) and employs more than 350 people.

In November 2019, Avianor reached a highly important milestone and has received Transport Canada (TCCA) approval to add the Airbus A220-100 and A220-300 to its maintenance capability list.

Airbus to invest up to $1.4-billion in A220 passenger jet program this year

News provided by The Globe and Mail – link to full story

ALLISON LAMPERT, MONTREAL, REUTERS – FEBRUARY 20, 2020

Quebec Premier Francois Legault, left, and Airbus CEO Guillaume Faury take a tour of the Airbus A220 assembly line in Mirabel, Que., on Feb. 20, 2020.GRAHAM HUGHES/THE CANADIAN PRESS

Airbus SE plans to invest between 500 million euros and 1 billion euros (C$715-million and C$1.43-billion) this year on its A220 passenger jet program, chief executive Guillaume Faury said on Thursday at the company’s A220 factory in Mirabel, just outside Montreal.

Earlier in February, Airbus raised its stake in the A220 program – known as Airbus Canada – to 75 per cent from 50.1 per cent after teaming up with the government of the Canadian province of Quebec to buy Bombardier’s 33.5 per cent stake.

With the deal, Bombardier exited the civil aviation industry and bolstered the European planemaker’s position in its ongoing competition with U.S. rival Boeing Co.

The A220, previously known as the C Series, is a 110-130 seater aircraft, a little smaller than Airbus’s mainstay A320 jet.

Airbus has been ramping up production of the A220 towards its maximum monthly capacity rate of 10 at its facility in Mirabel and to a monthly rate of four in Mobile, Ala., targets it hopes to reach by the middle of this decade.

Production in the United States has become more important for Airbus since the U.S. government slapped tariffs on jets made in Europe for purchase by U.S. airlines following a years-long tariff dispute.

Statement – Minister Bains comments on Airbus’ increased stake in the A220 aircraft program

Provided by Innovation, Science and Economic Development Canada/CNW

OTTAWA, Feb. 13, 2020 /CNW/ – The Honourable Navdeep Bains, Minister of Innovation, Science and Industry, made the following statement regarding Airbus’ increased stake in the A220 aircraft program.

Air Canada Airbus 220-300

            “Our government has been steadfast in its support for the Canadian aerospace industry and its workers.

            “We welcome any investment in Canada’s vibrant aerospace sector and its skilled workforce. Aerospace is one of the most innovative and export-driven industries in Canada, having contributed over $25 billion in GDP and more than 210,000 jobs to Canada’s economy in 2018.

            “We have been in communication with Bombardier, the Government of Quebec and the CEO of Airbus, and we will continue to engage with all relevant parties to ensure that previous commitments are honoured. We also welcome the announcement of 3,300 jobs being secured in Quebec. This is a recognition of Canada’s world-class aerospace workers and demonstrates a commitment to supporting Canadian expertise and growing this important sector.”

Bombardier Announces Full-Year Financial Results

Provided by Bombardier Inc/CNW

  • Exit of commercial aerospace completed with sale of remaining interest in A220 partnership for ~$600M cash proceeds and the elimination of future investments of ~ $700M(1)
  • Pro Forma(1) cash on-hand of more than $4B, including all previously announced transactions, enhancing financial position
  • Company continuing to actively pursue strategic options to accelerate deleveraging
  • Fourth quarter, and full-year results in line with preliminary results previously announced
  • 2020 consolidated outlook: double-digit organic revenue growth(3) to more than $15B(1)
  • 2020 consolidated adjusted EBITDA margin(2) expected at ~ 7.0%, adjusted EBIT margin(2) expected at ~3.5%(1)
  • 2020 consolidated free cash flow(2) expected to be positive, excluding Residual Value Guarantee (RVG) payments(1)

MONTRÉAL, Feb. 13, 2020 (GLOBE NEWSWIRE) — Bombardier (TSX: BBD.B) today reported its fourth quarter and full year 2019 results, in line with previously announced preliminary results. The company also confirmed it is still actively pursuing options to accelerate deleveraging, strengthen its balance sheet and enhance shareholder value.

Sale of A220 Partnership Interest

Bombardier has entered into an agreement with Airbus SE and the Government of Quebec, under which Bombardier transferred its shares in the Airbus Canada Limited Partnership (ACLP) to Airbus and the Government of Quebec, improving Bombardier’s cash position. This includes cash proceeds of ~$600 million from Airbus, of which $531 million was paid upon closing with the balance to be paid over 2020-21, and the elimination of all future capital requirements for the A220 program, estimated at ~ $700 million.(1)

Bombardier will also transfer aerostructures activities and employees supporting the A220 and A330 in St-Laurent, Québec to Airbus subsidiary Stelia Aerospace. Finally, the agreement provides for the cancelation of 100,000,000 Bombardier warrants owned by Airbus.

Bombardier’s decision to sell its stake in the A220 partnership completes its exit from commercial aerospace, a significant undertaking. In 2016, Bombardier’s commercial aerospace business lost approximately $400 million and was consuming approximately $1 billion in cash. Addressing this challenging portfolio was a fundamental step in the Company’s turnaround plan.

“We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Québec and Canada. And, we are confident that the A220 program will enjoy a long and successful run under Airbus’ and Québec’s stewardship.”

Acceleration of Deleveraging Phase of Turnaround

The sale of our interest in the ACLP, combined with the previously announced aerospace divestitures, will generate more than $1.6 billion in cash proceeds and eliminate close to $2 billion in liabilities and future commitments.  Liquidity remains strong, with Pro Forma cash-on-hand of more than $4 billion and $5.5 billion in liquidity, providing the necessary flexibility to complete the turnaround. Both the CRJ program sale to Mitsubishi Heavy Industries, Inc. and sale of the aerostructures business to Spirit AeroSystems, Holding Inc. are expected to close in the first half of 2020.(1)

As previously announced, the Company is actively pursuing options that would allow it to accelerate deleveraging, paydown debt and position the business for long-term success with greater operating and financial flexibility. This process remains ongoing, however the company does not intent to provide any further updates at this time.

Overview Financial Performance

Bombardier’s consolidated revenues for the year were $15.8 billion, highlighted by an 8.5% growth in business aircraft activities. The growth in Aviation revenues were offset by the lower contribution from commercial aircraft businesses following their divestitures. Revenues at Transportation also decreased, mainly due to contract estimate revisions.

Consolidated adjusted EBITDA and adjusted EBIT for the year were $896 million and $470 million, respectively, reflecting (i) improvements at Aviation as it exits underperforming commercial programs and ramps-up production on the Global 7500 aircraft; and (ii) additional charges and investments at Transportation to complete challenging projects. Reported EBIT loss for the year of $498 million includes a $1.6B impairment charge related to the ACLP investment.

Fourth quarter cash generation reached $1.0 billion, reducing free cash flow usage to $1.2 billion for the year.  Higher than anticipated cash usage was driven by additional investments made to address challenging rail projects, as well as, the deferral of deliveries, mainly at Transportation. Cash usage from operating activities amounted to $680 million for the full year.

2020 Outlook

Revenues from our sustaining business aircraft and Transportation activities in 2020 are expected to grow organically by double-digit percentage over the $13.7 billion revenues recorded from these businesses in 2019(1).  This strong growth is driven mainly from the acceleration of Global 7500 deliveries contributing to a total of 160 aircraft or more for the year at Aviation. The consolidated revenue growth is also supported by the ongoing production ramp-up of Transportation, driven by the solid orders from the past few years.

Adjusted EBITDA and adjusted EBIT are expected to increase to approximately 7.0% and 3.5% respectively, mainly from the acceleration of Global 7500 deliveries at Aviation and gradual margin normalization at Transportation. The adjusted EBIT margin expansion includes a higher amortization expense as Global 7500 deliveries increase. The full year outlook for earnings reflects the partial year contribution from ongoing divestitures of the CRJ program and Aerostructures businesses.(1)

Free cash flow is expected to be positive in 2020, excluding Credit and RVG payments. These residual liabilities related to the exit of commercial aircraft are estimated to be approximately $200 million for the year and are expected to be paid from the CRJ transaction proceeds.(1)

Aviation

Stronger Financial Performance as Aviation Reshapes its Portfolio

  • Revenues for Aviation totalled $7.5 billion for 2019. This reflects an 8.5% revenue growth from business aircraft activities and continued double-digit organic growth from aftermarket.
  • The segment achieved 175 aircraft deliveries during the year, comprised of 54 Global, 76 Challenger, 12 Learjet, as well as 33 commercial aircraft.
    °  The fourth quarter’s activity level was high, with deliveries reaching 52 business aircraft as Global 7500 deliveries accelerated.
  • Adjusted EBITDA margin was 10.8% for the year, up 200 bps driven by the exit of the Q400 and C Series programs. This profitability was nonetheless diluted in 2019 by CRJ activities, accounting for $1.2 billion in revenues for the year.
  • The adjusted EBIT margin of 7.1% is up 70 bps year-over-year, reflecting the early production ramp up and higher amortization associated with Global 7500 deliveries, as well as the dilution from commercial aircraft activities.
  • Business aircraft backlog increased slightly for the second consecutive year, reaching $14.4 billion at year end, while the CRJ backlog declined as production winds down.

Concentrating on Business Aircraft while Addressing Underperforming Programs

  • In February 2019, the Corporation acquired the Global 7500 aircraft wing program operations and assets from Triumph Group Inc. This transaction enabled the company to leverage its extensive technical expertise to support the ramp-up of the Global 7500 aircraft and secure its long-term success.
  • In March 2019, we concluded the sale of Business Aircraft’s flight and technical training activities to CAE Inc. for net proceeds of $532 million.
  • In May 2019, we completed the previously announced sale of the Q Series program assets, including aftermarket operations and assets, to De Havilland Aircraft of Canada for net proceeds of $285 million.
  • In June 2019, the Corporation entered into a definitive agreement with Mitsubishi Heavy Industries, Ltd (MHI) for the sale of its regional jet program for a cash consideration of $550 million payable upon closing, and the assumption by MHI of approximately $200 million of liabilities related to credit and residual value guarantees and lease subsidies. The transaction is currently expected to close by mid-year 2020 and remains subject to regulatory approvals and customary closing conditions.
  • In October 2019, the Corporation and Spirit AeroSystems Holding, Inc. (Spirit) announced that they have entered into a definitive agreement, whereby Spirit will acquire Bombardier’s aerostructures activities and aftermarket services operations in Belfast, U.K. and Casablanca, Morocco, and its aerostructures maintenance, repair and overhaul facility in Dallas, U.S. for a cash consideration of $500 million and the assumption of approximately $700 million of liabilities, including government refundable advances and pension obligations. The transaction is expected to close by mid-year 2020 and remains subject to regulatory approvals and customary closing conditions.

Positioned for Growth through certification and ramp up of New Programs and Service Network Expansion

  • Reaching full-scale production of the class-defining Global 7500 aircraft. With increased deliveries, the Global 7500 aircraft is expected to contribute significantly to revenues growth in 2020. As the aircraft progresses on the learning curve, it will also contribute to margin expansion.
  • Certified the new Global 5500 and Global 6500 aircraft, followed by the entry into service of the Global 6500 aircraft in 2019, offering customers the perfect combination of range, speed, field performance and smooth ride.
  • Continued and consistent growth of the aftermarket business, with further expansion of the service network in Singapore planned for 2020.

Link to full press release

Airbus and the Government of Québec become sole owners of the A220 Programme as Bombardier completes its strategic exit from Commercial Aviation

Provided by Bombardier Inc

  • Bombardier transfers its remaining interest in Airbus Canada Limited Partnership (Airbus Canada) to Airbus SE and the Government of Québec
  • Airbus now holds 75 percent of Airbus Canada with the Government of Québec increasing its holding to 25 percent for no cash consideration
  • Bombardier work packages for the A220 and A330 will be transferred to Airbus, through its subsidiary Stelia Aerospace, securing 360 jobs in Québec
  • Bombardier will receive US$591M, net of adjustments, of which US$531M was received at closing, and is released of its future funding capital requirement to Airbus Canada
  • Over 3,300 Airbus jobs secured in Québec

AMSTERDAM, Netherlands and MONTREAL, Feb. 13, 2020 (GLOBE NEWSWIRE) — Airbus SE (EPA: AIR), the Government of Québec and  Bombardier Inc. (TSX: BBD.B) have agreed upon a new ownership structure for the A220 programme, whereby Bombardier transferred its remaining shares in Airbus Canada Limited Partnership (Airbus Canada) to Airbus and the Government of Québec. The transaction is effective immediately.

This agreement brings the shareholdings in Airbus Canada, responsible for the A220, to 75 percent for Airbus and 25 percent for the Government of Québec respectively. The Government’s stake is redeemable by Airbus in 2026 – three years later than before. As part of this transaction, Airbus, via its wholly owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier in Saint-Laurent, Québec.

This new agreement underlines the commitment of Airbus and the Government of Québec to the A220 programme during this phase of continuous ramp-up and increasing customer demand. Since Airbus took majority ownership of the A220 programme on July 1, 2018, total cumulative net orders for the aircraft have increased by 64 percent to 658 units at the end of January 2020.

“This agreement with Bombardier and the Government of Québec demonstrates our support and commitment to the A220 and Airbus in Canada. Furthermore it extends our trustful partnership with the Government of Québec. This is good news for our customers and employees as well as for the Québec and Canadian aerospace industry,” said Airbus Chief Executive Officer Guillaume Faury. “I would like to sincerely thank Bombardier for the strong collaboration during our partnership. We are committed to this fantastic aircraft programme and we are aligned with the Government of Québec in our ambition to bring long-term visibility to the Québec and Canadian aerospace industry.”

“I am proud that our government was able to reach this agreement. We have succeeded in protecting paying jobs and the exceptional expertise developed in Québec, despite the major challenges we faced in this regard when we took office. We have consolidated the government’s position in the partnership, while respecting our commitment not to reinvest in the program. By opting to strengthen its presence here, Airbus has chosen to focus on our talents and our creativity. The decision of an industrial giant like Airbus to invest more in Québec will help attract other world-class prime contractors,” the Premier of Québec, François Legault, stated.

“This agreement is excellent news for Québec and its aerospace industry. The A220 partnership is now well established and will continue to grow in Québec. The agreement will allow Bombardier to improve its financial situation and Airbus to increase its presence and footprint in Québec. It’s a win–win situation for both the private partners and the industry,” pointed out Pierre Fitzgibbon, Minister of the Economy and Innovation.

With this transaction, Bombardier will receive a consideration of $591M from Airbus, net of adjustments, of which $531M was received at closing and $60M to be paid over the 2020-21 period. The agreement also provides for the cancellation of Bombardier warrants owned by Airbus, as well as releasing Bombardier of its future funding capital requirement to Airbus Canada.

“This transaction supports our efforts to address our capital structure and completes our strategic exit from commercial aerospace,” said Alain Bellemare, President and CEO Bombardier, Inc.  “We are incredibly proud of the many achievements and tremendous impact Bombardier had on the commercial aviation industry.  We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Québec and Canada.  We are confident that the A220 program will enjoy a long and successful run under Airbus’ and the Government of Québec’s stewardship.”

The single aisle market is a key growth driver, representing 70 percent of the expected global future demand for aircraft. Ranging from 100 to 150 seats, the A220 is highly complementary to Airbus’ existing single aisle aircraft portfolio, which focuses on the higher end of the single-aisle business (150-240 seats).

As part of the agreement, Airbus has acquired the Airbus A220 and A330 work package production capability from Bombardier in Saint-Laurent, Québec. These production activities will be operated in the Saint Laurent site by Stelia Aéronautique Saint Laurent Inc., a newly created subsidiary of Stelia Aerospace, which is a 100 percent Airbus subsidiary.

Stelia Aéronautique Saint-Laurent will continue the production of the A220 cockpit and aft fuselage production, as well as A330 workpackages, for a transition period of approximately three years at the Saint-Laurent facility. A220 workpackages will then be transferred to the Stelia Aerospace site in Mirabel to optimize the logistical flow to the A220 Final Assembly Line also located in Mirabel. Airbus plans to offer all current Bombardier employees working on the A220 and A330 work packages at Saint-Laurent opportunities around the A220 programme’s ramp-up, ensuring know-how retention as well as business continuity and growth in Québec.

At the end of January 2020, 107 A220 aircraft were flying with seven customers on four continents. In 2019 alone, Airbus delivered 48 A220s, with the further ramp-up to be continued.

For more information about A220-Family