From passengers to cargo: How airlines are overhauling their business – and their planes

News from The Globe and Mail – link to story and updates

Matthew McClearn ~ 11 May 2020

Air Canada’s first Boeing 777-300ER converted for cargo service, seen here, carried personal protective equipment from Shanghai to Toronto last month.COURTESY OF MANUFACTURER

More than a quarter of a century after retiring its last dedicated freighter, Air Canada is back in the business of flying exclusive cargo flights.

Last month, the passenger airline removed seats from four Boeing 777 300ERs, more than doubling the space available for goods on the planes. The aircraft are primarily moving masks, gowns and other personal protective equipment necessary to combat COVID-19 from Shanghai to Canada. The airline also plans to convert four Airbus A330s to serve routes to Europe and South America.

“We weren’t looking to be in the freighter business until this moment,” said Tim Strauss, the airline’s vice-president of cargo. “We’re doing this so we can get more PPE equipment back into Canada faster than could have been done otherwise.”

American Airlines and Finland’s Finnair have also rapidly converted aircraft into freighters, and new announcements arrive weekly. Now everyone from ground crews to airport officials to regulators are scrambling to adapt to these strange hybrid planes.

While not unprecedented, such wholesale repurposing of aircraft occurs only during humanitarian crises, said Jonathan McDonald, an analyst with aviation consultancy IBA. Rare examples included large-scale airlifts after a tropical cyclone destroyed Darwin, Australia, in 1974, and during famines in Ethiopia.

“In history, yes, there have been one-off events. You had the Berlin Airlift, I suppose, but that’s going back 70-plus years.”

Normally, people are a passenger airline’s most valuable cargo. But COVID-19 halted most human traffic and grounded fleets worldwide. Because passenger jets also carry cargo – typically high-value goods that justify increased air shipping costs – the result was a dramatic drop in available capacity for urgent shipments.

“In the pre-COVID-19 environment, 70 per cent of our cargo was travelling in the bellies of passenger aircraft,” said Craig Bradbrook, vice-president of aviation services at the Greater Toronto Airports Authority (GTAA), which runs Pearson International Airport. “The airlines have scrambled to look at ways in which they can continue to move cargo.”

In a bid to replace some of that lost capacity and a small fraction of the revenue they’ve lost as a result of COVID-19 travel bans, airlines began flying cargo-only flights. At first, some airlines strapped boxes onto seats in passenger compartments. But Air Canada quickly realized this approach risked damaging the pricey video entertainment systems on seat backs. Moving cargo in passenger cabins is also slow and cumbersome.

The airline’s maintenance chief, Richard Steer, suggested removing the seats and stuffing cargo into the cabin. Canada’s aviation regulator, Transport Canada, responded encouragingly to the proposal. Air Canada partnered with Avianor, a firm that specializes in commercial jet cabins, to convert the 777s at Montréal-Mirabel International Airport.

Late last month, Jazz Airlines (which operates as Air Canada Express) announced plans to convert up to 13 of its Dash 8-400 aircraft using a “simplified package freighter” kit provided by the manufacturer, De Havilland Canada. De Havilland is in the process of introducing kits for earlier Dash 8 models.

Todd Young, De Havilland’s chief operating officer, said his company already had a program in the works to convert Dash 8s into dedicated freighters. After COVID-19 struck, the company realized it needed a more immediate solution.

“We wanted to keep our airplanes flying,” he said. “We wanted our customers to have options, to be able to perform a different mission than transporting personnel or passengers from point to point.”

Since announcing the conversion kits with Jazz, five international customers have placed their own orders, Mr. Young said.

Passenger airliners were routinely converted for cargo service before the pandemic; manufacturers such as Boeing, as well as third parties, have been doing brisk business in recent years. But proper conversions are a one-way trip, typically reserved for mid-life jets. Seats, overhead bins and “monuments” such as areas designated for flight attendants and catering are removed. A new, larger door is cut. Floors are reinforced, windows are plugged, and cargo handling systems and fire suppression equipment are installed. Afterward, a converted plane can be expected to haul cargo for 15 years or more.

Such changes permanently alter an aircraft’s balance and weight; it can take years to satisfy regulators that a given conversion process produces jets that are safe to fly.

They’re also costly. Mr. McDonald said the price for a 737-400 can be up to US$3-million. For wide-body aircraft such as 767s, it’s about US$14-million.

These COVID-19 conversions are rapid and inexpensive by comparison. Air Canada’s 777s, for instance, are far too young to be candidates for permanent conversion. “It’s very much a temporary role change for the aircraft,” Mr. McDonald said. “There’s obviously very good intentions, it’s humanitarian, it’s doing your bit to fight this bloody coronavirus, and it provides utilization for aircraft, which would otherwise just be sitting.”

The limited nature of the changes also helps comfort regulators. De Havilland’s conversion kits, for instance, couldn’t be more straightforward. Operators remove the seats and install tie-down fittings to hold 17 nets for securing cargo inside the passenger compartment. Aircraft can be converted overnight, Mr. Young said.

To facilitate regulatory approval, Air Canada sought a much lower maximum cargo weight than a 777 is capable of carrying – no great sacrifice, because PPE doesn’t weigh much. The aircraft’s lock system for seats is compatible with hardware for securing nets, further simplifying matters.

“We made it as simple to approve as you could possibly make it,” said Mr. Strauss, who praised Transport Canada’s rapid accommodation.

Mr. Strauss said Air Canada would like to convert some 787s as well, but those aircraft feature different seat locking mechanisms. “That would have taken a whole different certification process and much, much longer time,” he said. “Who knows if you’d even have it done this year?”

Airlines and regulators aren’t the only party forced to adapt to these unusual hybrid aircraft. Ground handlers must also figure out how to work with them.

“It’s still a passenger aircraft in terms of design,” Mr. Bradbrook said. “The door apertures are for passengers. They were never designed to take bulk cargo. So we’ve had to work with airlines and ground handlers to look at new processes for loading and unloading cargo piece by piece.” GTAA has provided mobile roller beds to handlers, and some airlines are using catering trucks to load cargo onto the main deck.

Gradually, efficiency is improving. Air Canada’s first loading in Shanghai late last month took five hours, but with optimization and experience that was quickly compressed to one hour and 15 minutes – all while maintaining physical distancing.

But temporarily converted planes will never be as efficient or inexpensive to operate as dedicated freighters. They introduce new costs: Crew members are required in cabins on temporarily converted Dash 8s to monitor packages and react in the event of fire, for example. And they’ll never replace passengers, which Mr. Strauss said usually brings in at least five times as much revenue a kilogram as cargo does.

Moreover, routes typically enjoy two-way traffic. Yet during COVID-19, cargo often moves in only one direction, for example from China to Canada.

All that helps explain today’s sky-high air cargo rates. Mr. Bradbrook said he’d heard they’d tripled. “The rates are high,” Mr. Strauss said. “I’ve never seen anything quite like it.”

Asked how many more temporary conversions will take place during COVID-19, Mr. McDonald said he couldn’t hazard a guess.

“In order to make a reliable forecast, sometimes you need past data to gauge trends and habits. This is such a new phenomenon that you can’t gauge to what extent people are going to do this. It’s still very early days.”

Prolonged Flight Ban Could Cut Aircraft Sales by About 10,000

News from BNN Bloomberg – link to story

Richard Weiss, Bloomberg News ~ April 8,2020

BC-Prolonged-Flight-Ban-Could-Cut-Aircraft-Sales-by-About-10000

BC-Prolonged-Flight-Ban-Could-Cut-Aircraft-Sales-by-About-10000 , Richard Weiss

(Bloomberg) — Demand for new aircraft could drop by almost one-half in the event the coronavirus forces airlines to keep much of their fleets grounded for six months, according to a report by Roland Berger.

In Roland Berger’s so-called “recession” scenario, airlines will likely need about 10,000 fewer new aircraft through 2030 than would have been the case without the pandemic, it said in a report on Wednesday. The best case is a “rebound,” whereby fleets are grounded for two months, and just 790 fewer aircraft are delivered.

The consultancy firm’s worst-case estimate is a grim prospect for investors in Boeing Co. and Airbus SE, which has seen factories making some of its best-selling models slow down from record rates. Planemakers are now pondering how to best handle the unprecedented production cuts. Airbus warned last month it wouldn’t achieve its earnings goals this year, and Deutsche Lufthansa AG yesterday became the first major airline to slash its fleet.

Roland Berger outlined a mid-way “delayed curve” scenario persisting for four months, where 5,920 fewer planes are needed. The speed of recovery in the air-traffic market underpinned the consultancy firm’s different scenarios. In the recession case, the market only recovers 80% of its strength by 2022, compared with a full recovery by the end of this year in the most optimistic situation.

Story Link: Groundings Could Cut Demand for New Aircraft in Half: Consultant

©2020 Bloomberg L.P.

Canada’s Air Transat retires A310-300s

News provided by ch-aviation.com and Mark Brandon-Youtube

02.04.2020 – 07:06 UTC

Air Transat (TS, Montréal Trudeau) retired all three of its remaining A310-300(ET)s at the end of March.

The type’s last revenue flight was operated on March 30, when C-GSAT (msn 600) flew from Porto via Halifax to Toronto Pearson. The aircraft subsequently joined the other two A310s, C-GPAT (msn 597) and C-GTSY (msn 447), in storage at Montréal Mirabel.

The airline has since confirmed in a statement to ch-aviation that the A310-300s have indeed been permanently withdrawn from service and will not be reactivated after the COVID-19 pandemic.

Air Transat was planning to retire the A310s over the coming months as its new A321-200neo(LR)s deliver from Airbus (AIB, Toulouse Blagnac).

2020 (c) Copyright Mark Brandon

A sad sight! Here we have the 4th Air Transat A310 to be retired, here she is departing Montreal for the very last time on a short ferry flight to Mirabel where she will be scrapped! Air Transat is the last North American airline to still operate the A310 commercially but that will change by the end of the year.

Active (As of Jan 2020) C-GPAT, C-GSAT, C-GTSY, C-GTSW

Retired: C-GTSF (Oct 2017), C-FDAT (Nov 2017), C-GLAT (Jan 2020), C-GTSH (Jan 2020).

They have said that they will retire there entire fleet by the end of 2020, so you better catch them while you can! History of C-GTSH: Built in 1991, and delivered to Lufthansa in 1992 before being sold to Air Transat in 2004. This aircraft is 28 years old and has 2 x GE CF6-80C2A2.

Mark Brandon

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

Bombardier exits commercial aviation as Airbus, Quebec take remaining A220 stake

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

Bombardier Inc. is pulling out of its joint venture with Airbus SE in a bid to save cash, closing the book on its failed big-league commercial aerospace ambitions as it reported a US$1.7-billion net loss for its latest quarter.

The Montreal-based multinational, which is working to sell one of its two big business units to fix an over-extended balance sheet, said Thursday it will exit a venture known as Airbus Canada Limited Partnership that builds the European plane maker’s A220 single-aisle jet.

The plane is the former C Series airliner developed by Bombardier at a cost of more than US$6-billion.

Airbus will pay Bombardier about US$600-million to increase its share in the venture to 75 per cent from just over 50 per cent and relieve Bombardier of further capital commitments in the program worth US$700-million, the companies said in a statement Thursday. The Quebec government will boost its share in the venture to 25 per cent from about 16 per cent for no cash consideration.

“This makes life easier for Airbus,” said Addison Schonland, an analyst at boutique aerospace consultancy AirInsight. “[Now they have] only one partner to consider.”

Investors and analysts had been anticipating the move after Bombardier issued a profit warning last month and said it was reassessing its ongoing participation in the venture amid the prospect of a delayed break-even timeline and lower returns.

The agreement, which takes effect immediately, brings to an end Bombardier’s involvement in commercial aerospace. It also marks a bitter end for the company’s effort to break the global commercial airliner duopoly held by Airbus and Boeing with the C Series.

The C Series, a single-aisle plane seating 100 to 150 people, was years late to market as well as over-budget and Bombardier misjudged how aggressive its rivals would be in trying to undermine its success. The effort left Bombardier hamstrung with more than US$9-billion in long-term debt that has triggered its slow breakup.

Over the past five years under Chief Executive Alain Bellemare, Bombardier has sold its waterbomber business, its Q400 turboprop unit, its CRJ regional jet franchise and its flight training business among other assets. Most important, it handed control of its cutting-edge C-Series airliner, now rebaptized the A220, to Airbus for a nominal sum in 2018.

The A220 is being hailed by operators and travellers alike for its quiet operation, fuel efficiency and cabin features. Since taking over the jet program, Airbus has generated cumulative orders of 658 units for the plane as of the end of January, 2020.

In recent weeks, Airbus asked Bombardier and Quebec, the third partner in the venture, to put more money into the partnership to fund a production increase. In the end, Bombardier decided it was unwilling to given its cash flow issues.

The agreement with Airbus is a largely a win for the government of Premier François Legault, who manage to secure more than 3,300 aerospace jobs in the province and protect its previous US$1-billion investment in the A220 venture. Although Quebec does not have to pay to increase its stake, it is understood to be responsible with Airbus for future funding for the program.

As part of the deal, Airbus has bought Bombardier’s work package production capability on the Airbus A220 and A330 jets. Airbus can buy out Quebec’s share in 2026, three years later than originally planned.

The announcement came as Bombardier reported a US$1.7-billion net loss for the fourth quarter of fiscal 2019 on revenue of US$4.2-billion. The company is struggling to complete several major rail contracts and has absorbed cost overruns and late-delivery penalties that have sucked up cash.

Nevertheless, the manufacturer said Thursday it has enough financial flexibility to complete its turnaround. It said it has pro forma cash on hand of more than US$4-billion and US$5.5-billion in liquidity.

The company is running simultaneous sets of talks in Europe and North America on selling either its rail or luxury-jet unit, according to information gathered by The Globe and Mail. Discussions have been held with France’s Alstom SA and Japan’s Hitachi on the train side and U.S. conglomerate Textron Inc. and private equity giant Carlyle Group on the plane side, sources confirmed.

The company has confirmed only that it is pursuing options that would allow it to pay down debt and fix its capital structure. It said Thursday the process remains ongoing but provided no update.

Bombardier nears deal to sell stake in Airbus A220 program

News provided by the Toronto Star – link to full story and updates

By Brendan Case, Bloomberg Fri., Feb. 7, 2020

Air Canada Airbus 220-300

Bombardier Inc.’s ill-fated foray into building jetliners may be nearing an end, and investors are applauding.

The company is in advanced talks to sell its stake in Airbus SE’s A220 program to the European aerospace giant, the Wall Street Journal reported Friday.

A deal for Bombardier’s 34 per cent holding in the venture could be reached as early as next week, the newspaper said, citing people familiar with the matter.

Quebec, which owns 16 per cent of the program, would retain its stake.

Walking away from the A220 would close the book on Bombardier’s involvement in an aircraft program in which the company invested more than $6 billion (U.S.) amid a series of development delays and cost overruns.

Bombardier, creaking under heavy debt and struggling to sell the all-new single-aisle plane, ceded control of the program to Airbus in 2018 while retaining a minority participation.

Financial terms of the Airbus-Bombardier deal couldn’t be learned, the Journal said.

The talks could still fall apart and the outlines of any agreements could change, the newspaper said.

Both companies are scheduled to report earnings Feb. 13.

Bombardier climbed 4.5 per cent to $1.49 (Canadian) at 3:34 p.m. in Toronto, reversing losses after the Journal’s story.

A sale of the company’s stake in the A220, which was originally known as the C Series, would also be a milestone for cash-strapped Bombardier as it weighs selling other key businesses in a potentially far-reaching revamp. Saddled with a $10-billion (U.S.) debt load, the Montreal-based company has held talks to combine its rail-equipment operation with France’s Alstom SA. It’s also exploring a sale of its private-jet unit to Textron Inc., the Journal reported earlier this week.Get more business in your inboxGet the business news and analysis that matters most every morning in our Star Business email newsletter.

Ottawa advances FWSAR programme with C295 acceptance

News provided by Flight Global – link to full story

By Craig Hoyle, 3 January 2020

Canada has formally taken receipt of its first C295 fixed-wing search and rescue (FWSAR) aircraft from Airbus Defence & Space, with the asset to be used in support of personnel training activities in Europe for the next several months.

Accepted at the manufacturer’s San Pablo site in Seville, Spain, the twin-turboprop is the first of an eventual 16 being acquired via Ottawa’s FWSAR programme.

C295 FWSAR Canada
Source: Airbus Defence & Space – Lead aircraft is in Seville to support personnel training

Announcing the development on 20 December by Twitter, Airbus says that following additional testing and training the aircraft will be flown to its home base at Comox, British Columbia, “by mid-2020”.

The Royal Canadian Air Force will field the FWSAR-configuration aircraft – locally designated as the CC295 – as replacements for aged De Havilland Canada DHC-5s and Lockheed Martin C-130Hs flown during search and rescue operations.

Adaptations made for the Canadian programme have included installing Collins Aerospace Pro Line Fusion avionics, reinforcing the lower rear fuselage and adding an upper escape hatch for use in the event of ditching at sea, fully enclosing its main landing gear and incorporating vortex generators on the rear ramp.

Mission equipment includes a maritime search radar, turret-housed electro-optical/infrared sensor and enhanced vision system, plus two onboard operator stations, maritime automatic identification system equipment and large bubble observation windows.

The air force’s Comox base – which also will be home to a new FWSAR training centre – will eventually accommodate five CC295s. Three aircraft each will be stationed in Winnipeg, Manitoba, Trenton, Ontario, and Greenwood, Nova Scotia, with the remaining two airframes to be positioned as required to support operations.

Link to Airbus.com on the C295 FWSAR

Air Canada Completes Installation of Satellite Connectivity Across Full Air Canada Rouge Fleet

Provided by Air Canada/CNW

MONTREAL, Dec. 17, 2019 /CNW Telbec/ – Air Canada said today that Rouge Wi-Fi high-speed satellite-based connectivity provided by Gogo is now available across the entire Air Canada Rouge fleet of 65 aircraft that fly globally and across North America.

Air Canada Completes Installation of Satellite Connectivity Across Full Air Canada Rouge Fleet (CNW Group/Air Canada)
Air Canada Completes Installation of Satellite Connectivity Across Full Air Canada Rouge Fleet (CNW Group/Air Canada)

“Customers now can access Rouge Wi-Fi high-speed internet connectivity on their own devices whenever they are onboard an Air Canada Rouge aircraft anywhere in the world, giving everyone the ability to stay connected to email, surf the web, or stream their favourite movies and TV shows from services like Netflix and YouTube. We are excited to now offer fast, reliable wi-fi options onboard all Rouge aircraft for the increasing numbers of customers seeking connectivity when flying,” said Andrew Yiu, Vice President, Product at Air Canada.

Customers can choose from a selection of Wi-Fi packages to suit their requirements with starting prices of $8.50 CAD simply by connecting to the “Rouge Wi-Fi” network onboard and following the instructions.

In addition to the full Air Canada Rouge fleet, satellite based Wi-Fi is already available on all Air Canada Boeing 777s, and most Boeing 787s and Airbus A330s with the remainder to be completed early 2020. Air Canada Wi-Fi connectivity is also available across the carrier’s entire mainline narrow body fleet and the Air Canada Express Embraer 175 and Bombardier CRJ-900 fleets. Air Canada’s new Airbus A220 fleet which it begins taking delivery of before the end of 2019 will come equipped with satellite based wi-fi.

Air Senegal to grow its fleet with eight A220s

Airbus Press Release – 19 November 2019

A220-300 Air Senegal
A220-300 Air Senegal

Air Senegal, the new national carrier of Senegal, has signed a Memorandum of Understanding (MoU) for eight A220-300 aircraft.

The MoU was signed today in the presence of HE Alioune SARR, Minister of Tourism and Transport Senegal.

The A220s’ efficiency will enable Air Senegal to reduce the airline’s operating costs while offering passengers unrivalled comfort throughout its fleet. Earlier in 2019, the carrier was the first African airline to fly Airbus’ new generation widebody aircraft, the A330neo, featuring latest technology engines, new wings with enhanced aerodynamics and a curved wingtip design, drawing best practices from the A350 XWB.

Mr Ibrahima Kane Air Senegal CEO said: “These new 220 aircrafts will contribute to develop our long-haul network to Europe and our regional network in Africa. Combined with our recent A330neo aircraft, this new Airbus fleet reveals Air Senegal’s ambition to offer the best travel experience for our passengers.”

“The number of A220s operation on the African continent is steadily growing and we are proud to add Senegal’s new flag carrier in our list of A220 African customers. Offering the lowest operating costs in its category, the A220 is the best aircraft for airlines to launch new domestic and international routes efficiently,” said Christian Scherer Chief Commercial officer Airbus.

The A220 is the only aircraft purpose-built for the 100-150 seat market; it delivers unbeatable fuel efficiency and widebody passenger comfort in a single-aisle aircraft. The A220 brings together state-of-the-art aerodynamics, advanced materials and Pratt & Whitney’s latest-generation PW1500G geared turbofan engines to offer at least 20 percent lower fuel burn per seat compared to previous generation aircraft, along with significantly lower emissions and a reduced noise footprint. The A220 offers the performance of larger single-aisle aircraft. By the end of October 2019 the A220 had accumulated 530 orders.