$5.4bn A220 order more good news for Bombardier Belfast

One of the most important events in the global aviation calendar has delivered more good news for Bombardier Belfast with the announcement of an order for another 60 Airbus A220 aircraft formerly known as the C-Series.

Tuesday, 17th July 2018, 6:52 pm
Updated Tuesday, 17th July 2018, 6:54 pm
The latest announcement from Farnborough brings orders for the renamed A220 to 120 over the past week

The Memorandum of Understanding between the manufacturer and the as yet unnamed new airline is for 60 Airbus A220-300 aircraft, with deliveries beginning in 2021 and was revealed at the Farnborough Air Show.

The deal is understood to be worth US$5.4 billion at list prices.

The new airline has the backing of a group of experienced investors led by David Neeleman, founder of JetBlue, an investor in TAP in Portugal and controlling shareholder in Azul airlines in Brazil.

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The deal comes just a week after the US based carrier JetBlue announced its intention to buy 60 A220-300s with an option for another 60 but that is unrelated to the latest announcement.

“After years of US airline consolidation, the conditions are improving for a new generation of US airline to emerge, focused on passenger service and satisfaction,” said Mr Neeleman.

“The A220 will enable us to serve thinner routes in comfort without compromising cost, especially on longer-range missions.

“With deliveries starting in 2021, we will have ample time to assemble a world-class management team and another winning business model.”

Airbus chief commercial officer Eric Schulz said: “This US airline startup’s decision for the A220 as the platform on which to launch their new business model is a testament to the passenger appeal and operating economics of this outstanding aircraft.

The move to rebrand the C-Series, the wings for which are built in Belfast, follows the acqusition of a 51% stake in the C-Series programme last year while Bombardier was in the midst of a trade war over the plane’s pricing with Boeing.

The programme now operates under a partnership agreement between Airbus, Bombardier and Investment Québec knows as CSALP.

However, the announcement that Airbus is seeking a 20% across the board reduction in costs has provoked concern.

“Airbus are going to be challenging all suppliers for cost reductions of 20%,” said Bombardier boss in Belfast, Michael Ryan told the BBC at Farnborough adding that the savings could be found through overheads and efficiencies, though he declined to rule out further job losses.

However, the Airbus executive appointed to head the new venture, Phillipe Balduchhi, said said he would be “very surprised” if jobs would go as part of a plan to cut costs.

“The more we sell the better it is for all suppliers, including Belfast,” Mr Balduchhi said.

“The uncertainty of ‘will this product survive’ is very much behind us.”