Quebec has agreed to provide US$300 million to a combined total of US$1.2 billion in fresh investment in order to avoid its current stake in the former Bombardier C Series program being diminished by a future round of financing.
According to the news agency REUTERS, Quebec would have a 25% minority ownership in the A220 Series, while Airbus will keep a 75 percent majority stake with a US$900 million investment.
The move will push back the deadline for Airbus to purchase back the Quebec government’s shares, which was initially slated for 2026 but is now set for 2030, while also securing approximately 2,500 employment.
“At that time, we’re going to have a fair market value assessment and I’m very hopeful we’re going to make money and recuperate the original investment,” Quebec Economy Minister Pierre Fitzgibbon commented.
Because the initiative has yet to produce a profit, the move is considered as strategically advantageous for the government. Investissement Québec projected the value of Quebec’s investment to be $0 as of March 31, 2021.
However, the year 2025 has been set as the year when Airbus expects the program to become viable.
The European planemaker’s purchase of the then-Bombardier C Series for 110- and 130-seater jet aircraft was started with the intention that Airbus’ greater purchasing power and global network of suppliers would help lower component costs, bringing the program into the black by now.
Despite the fact that the A220 Series jet has a backlog of about 500 aircraft, Airbus has been unable to secure the reductions it sought from its suppliers. The A220 is produced at an Airbus plant in the Montreal area as well as in Mobile, Alabama.